Not sure if the English made the right decision in deciding to leave the European Union…
The uncertainty related to Brexit, regarding the terms of Britain’s exit from the European Union, is hindering the British economy.
In its latest report, the Bank of England (BoE) highlights the cautiousness of consumers and businesses.
For 2017, it is now forecasting a GDP increase of 1.7%, compared to 1.9% previously.
Growth forecasts have been revised downward: the BoE is now expecting a GDP increase of 1.7% this year, compared to 1.9% previously. It has also revised its estimate for 2018 to 1.6% from 1.7%.
After holding up well in the months following the Brexit vote, economic activity experienced a significant slowdown at the beginning of the year (+0.2% GDP growth), then slightly recovered in the second quarter.
The pound has lost 15% against the euro since the referendum vote at the end of June 2016. This has increased the cost of imports and simultaneously benefited British exports little, as they are not very sensitive to price factors.
The rise in prices, which reached 2.6% in June, is expected to continue climbing to 3% in October, according to the Bank’s forecast. However, there is no question of tightening its monetary policy: interest rates will remain at 0.25%, along with the support measures put in place over the past year, notably the increase in the ceiling for asset purchases.
