After a slow pensive lull in the British economy post Brexit we are beginning to now see signs of a detrition as the knock on effect of the UK’s vote to leave the EU is hitting the UK economy. Insolvency company MGJL have stated that;
The uncertainty caused by the Brexit vote has certainly had a knock on effect to various major employers in the UK, Lloyds are more than likely expecting a further period of low interest rates as the government seeks stability in the light of the vote, which will impact on profitability, Rolls Royce were already implementing a turnaround plan, but the sudden drop in the pounds value against the dollar will have had a negative impact on this.
As the results of three influential surveys released on the 28th of July have stated that Britain’s car industry, retail sectors and building companies all face worrying futures as they suffer the Brexit shock. The society of motor manufacturers and traders have reported that its members were feeling apprehensive about the prospects of growth, jobs and investments in the UK economy.
Similarly, leading lettings and sales estate agent group Countrywide have also today issued warnings that the countries property markets are weakening since the referendum. With over 50 high street brands at their disposal, Countrywide admits that profits for this year will certainly be lower than in 2015 and lays the blame firmly at the feat of the UK’s decision to leave the EU.
According too countrywide there was a clear market slowdown in May and June as well as a commercial and London residential stall since the vote. The number of homes sold are subject to contract in London fell 29% in April to June when compared with January to March. Countrywide also reported a 25% tumble in adjusted pre-tax profits for the first half of 2016 and warned of turbulent times ahead.
Finally, today’s news has been topped off by Lloyds Banks decision to axe 3000 jobs and close 200 branches across the UK following a period of uncertainty caused by Brexit. The Guardians business editor Jill Treanor explained;
The bank is blaming changes to customer behaviour and anticipated cuts to interest rates following the vote for Brexit last month. Mark Carney, the Bank of England governor, signalled a rate cut would take place during the summer and the City now expects rates will be cut from their 0.5% historic low on 4 August.
We can expect to see further negative developments as the months and years continue for the UK post-Brexit as investors pull out. Confidence in the market is currently shaky and further issues could further destabilise the already precarious position of the UK.
