7 things about Brexit we learned this week

by Rachel Franklin | 19.08.2016

August is typically a quiet time for politics. Westminster is in recess and many Britons, including the prime minister, enjoy a much-needed getaway. But there has been no pause in the unforeseen consequences of Brexit. Here are another seven things we learned this week about leaving the EU:

1. A new report from the Resolution Foundation concluded that the damage to the UK economy will outweigh the gains from Brexit. The think tank found that increased migration had put slight downward pressure on pay in some low-skilled jobs but those wages were unlikely to rise significantly in the wake of Brexit. Instead, the report warned that a dramatic decline in immigration could cause serious damage to industries that rely heavily on migrant labour. One such sector is farming, which has already sounded the alarm about its future.

2. The CIPD’s Labour Market Outlook found that the proportion of employers that expected to step up hiring over the next few months has fallen by 4% since the referendum. An IHS Markit report earlier this month found that permanent recruitment has dropped to lows not seen since 2009.

3.There was good news on the economy this week. The unemployment rate did not rise in July, as the Bank of England expects it will; retail sales rose unexpectedly fast, thanks to warm weather; and there was no sign in July of the spurt in inflation that economists anticipate due to the drop in sterling. Still, it’s probably only a matter of time before the pain starts. A Treasury survey this week showed nearly every major bank in the City has slashed its forecast for growth, with many now effectively predicting a recession.

4. The NHS looks set to lose critical medical expertise as some doctors from other EU member states are leaving the UK because of uncertainty over their status post-Brexit. Up to a quarter of doctors in specialist hospitals are from the EU and work in areas from cancer treatment to brain surgery. Nicola Sturgeon, Chuka Umunna and, controversially, prominent Vote Leave campaigner Gisela Stuart all called on Theresa May to stop treating EU migrants as a bargaining chip in Brexit negotiations. Ms Stuart’s intervention is the latest suggestion that she is trying to airbrush her record on migration during the referendum campaign.  

5. Some of London’s biggest banks are planning to relocate staff after Brexit. London generates nearly 30% of the UK’s taxes so diminished competitiveness in financial services because of restricted access to the single market serves as a real threat to Britain’s prosperity. Frankfurt is the latest financial centre keen to court British-based banks that are considering restructuring. France’s prime minister, Manuel Valls, has previously said he would like Paris to be “the financial capital of the future” after Brexit.

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    6. Sterling’s sharp fall is affecting remittances from migrant workers in Britain. With the UK estimated by the World Bank to be the fourth-largest source of remittances globally, the 12% devaluation of the pound since the referendum means migrant workers can now send home significantly less. Remittances are a particularly crucial source of income for poor communities, which are thus set to be hit hard by Brexit. The slide in sterling is also hurting British holidaymakers. A pound fetched less than one euro at some airport bureaux de change this week. No wonder more people are opting for staycations.

    7. The property market continues to suffer in the wake of Brexit. Figures from Rightmove show that the price of homes for sale posted the biggest drop in nine months. Commercial property fell by nearly 3% in July, the steepest decline since 2009, while Norway’s sovereign wealth fund, the world’s largest, marked down the value of its UK property portfolio by 5% due to Brexit. Farmland has also fallen significantly, with prices for land used for arable farming and for pasture down by nearly 9% and 7%, respectively, because of concern about the future of farming without EU subsidies.

    Edited by Alan Wheatley

    One Response to “7 things about Brexit we learned this week”

    • I am upset that all your reports can do is try to find the very negatives about the Brexit proposals.

      When will you understand that the vote is for the country to leave the EU.

      I voted to remain and agreed with all that your website was saying prior to the referendum. There is no point keep going over the same old facts.

      Until we actually see what the proposal are or can try to influence what they may be what is the point of covering the same ground?

      Please , please try to be less negative and don’t keep printing items which may not happen. This is what is pushing down the exchange rate but the stock market is doing well.