There's been a common theme running through recent market reports out of the UK: whatever happens to our economy, Brexit uncertainty is to blame...
"[The EU referendum] appears to be generating an extraordinary level of economic policy uncertainty." - Professor Nicholas Bloom, Stanford University
With almost two months still to go before Britons cast their votes, the Brexit debate has already created more economic uncertainty in the UK than the Scottish independence referendum, the eurozone crisis, the 2008 financial crisis and even the September 11th terrorist attacks.
This, at least, is according to research from Stanford University published in the Financial Times this week. The institution's Economic Policy Uncertainty Index for Britain has reportedly climbed to its highest level since the mid-90s, and the June 23rd referendum is to blame: "[it] appears to be generating an extraordinary level of economic policy uncertainty," Professor Nicholas Bloom told the newspaper. "We think Brexit-related uncertainty is having a material negative effect on UK economic performance."
A shock revelation? Well, not really. Over the past few months, it's been rare to see an industry news report or economic release that fails to mention the referendum as a possible culprit for any and all signs of malaise. Some of these arguments have been compelling; others less so. Punters have had a fun time telling apart the candid statements and the blatant politicking.
Here are four examples of things we've blamed on Brexit. Is it a real threat or a convenient scapegoat? You decide!
UK GDP growth slows
Last week, the Office for National Statistics (ONS) put out GDP data showing that - as per expectations - the UK's economy grew 0.4 per cent in the three months between January and March. Growth has therefore slowed since the final quarter of 2015, when the figure was 0.6 per cent.
George Osborne's verdict? "It's good news that Britain continues to grow, but there are warnings today that the threat of leaving the EU is weighing on our economy." Words chosen carefully, presumably, because the ONS itself said there was no evidence for or against a Brexit effect on the GDP data.
PMI data disappoints
So far, this week has witnessed yet another string of disappointing PMI releases from Markit and CIPS. In manufacturing, we saw the benchmark index for April sink to a three-year low of 49.2; in construction, a three-year-low of 52.0; and in services - you guessed it - a three-year low of 52.3.
According to the survey compilers, Brexit can be held both directly and indirectly responsible for this gloomy outlook. Some purchasing managers are apparently holding off big decisions until after the referendum; others report cold feet on the part of their customers. In his comments on the manufacturing release, CIPS chief executive David Noble talked of an "atmosphere of deep unease".
According to April ONS data, UK unemployment shot up by 21,000 between December 2015 and February 2016 - the first time it's risen since last summer. A Brexit connection was promptly drawn by Stephen Crabb, the new work and pensions secretary, who said the figure raised "gritty questions" for the Leave camp on whether or not life will really be better for British workers outside of the EU.
His comments were quickly shot down by other senior Tories, but that's at least partly symptomatic of the great rift the EU referendum has caused across the party.
Property market tipped to slow
Finally, Brexit has been blamed widely - and often preemptively - for a slowdown in the UK property market. Bosses at some of Britain's biggest property firms have recently warned that uncertainty around the referendum is hurting their short-term prospects. Moreover, a report from the Royal Institute of Chartered Surveyors last month noted a drop-off in international demand for UK office, retail and industrial space since the second quarter of 2015 - around the time the referendum was confirmed, in fact.
It makes sense that we should see a slowdown in the market in the run-up to the referendum. Still, remember that a lot of demand for UK property comes from further afield than Europe; it's hard to say how big the blip will really be, both before and after the vote.
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