UK Economic Review Since Referendum: The good, the bad, and the ugly

Let’s directly get to the numbers, how the different segment of the UK economy have performed since the British referendum on June 23rd, where the majority of the Britons voted in favor of moving out of the European Union.

The Bad -

• The very first data that was out was the Right move House price index that dropped by 0.9 percent in July.
• Industrial trend survey orders declined to -4 in July from -2 in June.
• Halifax house prices declined by 1 percent in July.
• RICS house price balance declined to 5 percent in July from 16 percent in June.
• Right move House price index declined by 1.2 percent in August.
• Inflation reading showed broad-based rise in July.
• BBA Mortgage approvals dropped to 37,662 in July.
• Halifax house prices declined by -0.2 percent in August.
• Industrial production declined by 0.9 percent in July.

The Ugly -

• Manufacturing PMI declined sharply to 48.3 in July.
• GFK consumer confidence sank to -12 in July from -1 in June.
• Construction PMI declined to 45.9 in July.
• Services PMI declined to 47.4 in July.

The Good -

• Nationwide house price index was up 0.5 percent in July.
• BRC shop price index was still down by 1.6 percent.
• Retail sales (BRC) were up by 1.1 percent in July.
• House price index up 8.7 percent in July.
• The unemployment rate remained at 4.9 percent in August and wages grew by 2.3 percent excluding bonus.
• Retail sales grew by 1.5 percent in July.
• GFK consumer confidence improves to -7 in August from -12 in July.
• Nationwide House prices grew by 0.6 percent in August.
• Manufacturing PMI bounced back to 53.3 in August from 48.3 in July.
• Construction PMI improves to 49.2 in August.
• Services PMI improves to 52.9 in August from 47.4 in July.
• Manufacturing production grew by 0.1 percent in July.
• August inflation report shows upward pressure is still there but weak compared to July.

The basic analysis shows that out of 26 key economic releases, only four can be considered as ugly and all of them were reported in July; So no major shock for the economy. 50 percent of those releases can be considered to be good. So it would be fair to say that the economy is in relatively good shape. Out of nine releases that are considered as bad, six are from the housing sector. Compared to that, only three out of thirteen releases that are considered as good are from the housing sector. Hence, it would be fair to say that the Uk economy is in pretty good shape but the housing segment calls for caution.