How Brexit will affect businesses and the economy in the near and far future remains an enigma and the most recent Inflation Report reflected such.
As the Banks’ way of stemming negative impact on the economy, the announcement of initiating a Corporate Bond purchase programme described the necessary investment grade bonds as ‘representative of issuance by firms making a material contribution to the UK economy, in order to impart broad economic stimulus’.
The Report suggested the economy is likely to slow, however, the monthly survey of around 700 companies was not as negative.
It would appear that, in general, a negative effect from the vote, on turnover, capital spending and hiring activity over the next twelve months is expected and, following the decline in sterling being passed through, output prices are expected to rise, from rises in imported costs. This in turn is expected to create a boost in export demand (from falling sterling) but, the positive effect is likely to be offset by adverse impact on mergers activities by overseas investors. Housing market activity outlook shows as weakened, however, other factors came into play i.e. seasonal lull and lower demand following the BTL burst before the stamp duty changes, which makes a clear picture, opaque.
A truly see-saw mix of predictions, leaning towards downward pressures offset by higher prices, turnovers can (and will likely) be viewed positively or negatively dependent upon the core of the rise or fall. And of course, as ever for the British, if all else fails, blame the unusual weather (the wet version got the accolade this time around).