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Analysis

Hit to cars, chemicals and berries. Thanks Brexiters!

by Luke Lythgoe | 15.02.2018

As Theresa May continues her vague fudge of a Brexit, the uncertainty is sapping UK businesses. Here are six ways the economy has been damaged in recent weeks.

Car production in reverse

The number of  cars bought in the UK dropped nearly 10% last year as Brits put off big spending decisions because of Brexit uncertainty. Confusion over the government’s policy on diesel cars was also a factor. Meanwhile car manufacturers committed 34% less investment. “A drop of that magnitude is a concern,” said the car industry trade body. It called for “urgent clarity” from the government on Brexit.

Chemicals companies leaving

“Lack of clarity” was also given as the reason many chemicals companies are moving operations to other EU countries. They do not know what regime the industry will be under after Brexit. “Our members are advising us that they are already pressing the button,” said the Chemical Business Association.

British berries farmed in China

Seasonal farm workers are upping sticks, in part because the Brexit-induced plunge in the pound means their pay is worth less. As a result one of the UK’s largest berry producers, Haygrove’s farm in Herefordshire, has moved some of its business to Yunnan province in China. “If enough people are not made available to do the work, the work can be taken to the people,” wrote Haygrove in a letter urging action from the prime minister.

One way ticket to Brexit

Ryanair announced last month it was adding a “Brexit clause” to its Ts and Cs. Bookings will not be valid if airlines can’t operate between Britain and the EU post-Brexit. Although Ryanair will offer refunds, travellers could be left out of pocket for hotel bookings, car hire and the like if they can’t fly.

Price hikes keep coming

Inflation was 3% again in January. As price hikes continue to outstrip wage growth, people can buy less with their pay packets. The plunge in the pound caused by the Brexit vote is the main culprit as it is pushing up the price of imports. Remember that back in June 2016, the month of the referendum, inflation was only 0.5%.

Hit to the high street

As people feel the pinch, so do retailers. Consumer spending in January fell for the first time in five years, down 1.2% on 2017. The previous eight months have also seen a year-on-year fall in spending. Economists are blaming “rising living costs and lacklustre wage growth”.

Thanks Brexiters.

See our previous round-up of the toll Brexit is taking here.

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Edited by Hugo Dixon