Post-Brexit Britain has been on a bumpy economic ride. Confusion over what Brexit actually means and posturing in the EU negotiations has resulted in jittery markets that get easily spooked. While unemployment is at its lowest for 40 years, productivity appears so subdued that the Bank of England raised rates in November for the first time in a decade.
It would be fair to say that the UK has been the slowest to recover of all the advanced economies from the crash of 2008. If the Brits start making more and selling more both domestically and internationally (Manufacturing Production monthly on Wednesday 10th January at 9.30am GMT), some of those jitters might calm down. And for the last 3 months manufacturing production has been rising nicely. Maybe the EU market isn’t such a big deal?
Only joking – news on 7th suggested UK importers may face massive increases in upfront cost increases adding fuel to the bonfire that is the British economy. And it’s a shame then that analysts predict that December’s Manufacturing Production monthly figure of 0.7% was something of a peak. They reckon manufacturing production is going to fall back to as low as 0.1%. Let’s be positive – at least it is in the black. But if they’re right or if it’s even worse than that, markets really won’t like it. Manufacturing production makes up about 80% of total industrial production and it’s quick to react to consumer conditions, like earnings. All in all, GBP is starting 2018 on the back foot.