Brexit: What has actually happened so far?

Latest figures show the economy grew by 0.5% in the three months after the Brexit vote, powered by the UK's services sector. This was slower than the 0.7% rate in the previous quarter, but stronger than analysts' estimates of about 0.3%.

In its report for the Autumn Statement, the Office for Budget Responsibility has upgraded its growth forecast to 2.1% in 2016, from 2.0%, but downgraded to 1.4% in 2017, from 2.2%.

The Bank of England has raised its forecast for economic growth next year to 1.4% from 0.8%, but cut expectations for 2018 to 1.5% from 1.8%. Its consumer confidence index is back to its pre-Brexit vote levels in September, jumping six points in its biggest monthly rise since June 2015.

Inflation has gone up from 0.5% in June, with the Consumer Prices Index (CPI) at 1% in October. Raw material prices have risen, partly as a result of the falling pound, but the ONS said there was "little sign of this feeding through to consumer prices yet".

Figures from the ONS suggest inflationary pressures are building for businesses bringing in materials from abroad. Materials and fuels bought by UK manufacturers rose by 7.6% in price. That was the fastest rise since December 2011, and compared with a rise of 4.1% in the year to July. The price of goods leaving the factory also rose 0.8% in August, compared with a rise of 0.3% the previous month. Britain has long been running a trade deficit, meaning that overall we import more than we export.

The pound fell dramatically after the Brexit vote at the end of June. It declined to a three-year low against the euro following Theresa May's announcement that the UK would begin formal Brexit negotiations by the end of March. On 24 November the pound was worth $1.25, up slightly since Donald Trump's election victory. Against the euro, on 24 November it was worth about €1.18. A year earlier it was worth €1.42. The currency's continuing weakness has been accentuated by the cut in interest rates and the Bank of England's economic stimulus measures.

Interest Rates

Since the vote the Bank of England has taken a number of steps to boost the UK economy. It cut interest rates from 0.5% to 0.25% in August - the first reduction in the cost of borrowing since 2009 and taking UK rates to a new record low.

The Bank left its main interest rate at 0.25% in November.

The Bank has also announced a huge extension of its quantitative easing programme by an extra £70bn, and a £100bn scheme to force banks to pass on the low interest rate to households and businesses. One effect of the interest rate cut is that it has exacerbated the growing pension funds deficit because of falling bond yields. As yields fall it reduces the incomes pension funds get from their investments.

Migration

All the figures on numbers of people coming to the UK date from before the Brexit vote happened. In the year to March net migration - the difference between the number of people coming to the UK for at least a year and those leaving - remained at near record levels, at 327,000. But this was slightly down on the previous year. The figures showed a slowdown in the numbers settling in the UK from Poland and seven other Eastern European countries - but that was offset by an increase in net migration from Bulgaria and Romania, which hit record levels of 60,000.

The UK's construction industry seems to have recovered in August from a downturn that started just before June's Brexit vote. The latest Markit/CIPS UK Construction Purchasing Managers' Index rose to 49.2 from 45.9 in July, although the figure is still below the 50 mark that divides expansion from contraction.

The uncertainty over what happens next acted as a brake on the construction sector during August, especially in terms of house building, the survey suggests. However, a number of firms say that sales have held up better than had been expected. Significantly these figures also indicate the sector has seen a further steep rise in the cost of raw materials, with input costs now rising at their fastest pace since July 2011.

See the full article at BBC Business News, 24th Nov 2016