There have been many reports and indicators that the UK economy is struggling post-Brexit. It is still early to tell but a Treasury report today does not make great reading.
The Independent reports the document indicated that most of the major banking institutions in the capital have cut their growth forecasts for the UK economy in 2017.
The figures have been downgraded since the EU referendum vote and the UK’s decision to leave the European project. Many of these banks seem to be pointing towards a new recession, just as the economy was recovering from the worst financial crisis in a generation.
The figures don’t make great reading, for example Barclays Capital now believe the UK’s GDP will contract 0.5 per cent next year. In contrast in the month before the referendum they forecasted a robust 1.9 per cent growth in the economy.
In a similar vein, Nomura had also predicted a 1.9 per cent growth figure, but now they have signaled a likely shrinking of the economy of 1.3 per cent.
Citigroup, JP Morgan, Goldman Sachs, Royal Bank of Scotland and Bank of America Merrill Lynch have all predicted similar depressing figures for the economy.
Alongside these predictions the Co-op bank has said that the fall-out of the Brexit vote has damage their recovery plans. They said that the troubling economic future for the UK was depleting its capital reserves. The Co-op showed concern that house prices might fall in the wake of the EU referendum, which could hurt the bank’s recovery.
Many estate agents in the capital have had a severe knock to their share price and there have been rumours of branch closures on the high street, which after years of aggressive expansion across the capital, is a symbol of the turbulent economic situation in the UK.
The hopes are that the economy can pull through this period of instability and come out of the other side without falling into a recession, but the constant stream of data from various sectors doesn’t appear to signal a positive economic outlook