Saturday, July 23, 2016

Brexit Is Breaking the British Economy; is Recession beginning

It has been one month since the UK voted to 'Brexit', Britain exiting the European Union.

The results are not good.  The numbers reflect a severe contraction of historic proportions; the definition of a recession is two quarters of contraction.  The numbers from the first month makes it likely there will be a recession, with continuing contraction.

The UK was previously the country which had made the most economic gains after joining the EU.  Prior to joining the EU the UK economy was somewhat anemic at best.

As noted in this article from the BBC news, this is a disaster brought on the Brits entirely by their own actions.  Brexit was a stupid mistake by the same conservative crowd that ignores informed opinion in rejecting anthropogenic global warming.

Brexit causes dramatic drop in UK economy, data suggests
Britain's decision to leave the EU has led to a "dramatic deterioration" in economic activity, not seen since the aftermath of the financial crisis.
Data from IHS Markit's Purchasing Managers' Index, or PMI, shows a fall to 47.7 in July, the lowest level since April in 2009. A reading below 50 indicates contraction.
Both manufacturing and service sectors saw a decline in output and orders.
...The report surveyed more than 650 services companies, from sectors including transport, business services, computing and restaurants.
It asked them: "Is the level of business activity at your company higher, the same or lower than one month ago?"
It also asked manufacturers whether production had gone up or down.
The PMI is the first significant set of data measuring business reaction to the result of the UK referendum.
..."The only other times we have seen this index fall to these low levels, was the global financial crisis in 2008/9, the bursting of the dot com bubble, and the 1998 Asian financial crisis," Mr Williamson told the BBC.
"The difference this time is that it is entirely home-grown, which suggest the impact could be greater on the UK economy than before.
"This is exactly what most economists were saying would happen."
'Heading for recession'
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures provided the "first major evidence that the UK is entering a sharp downturn".

Neil Wilson, markets analyst at ETX Capital, said he thought the UK was "heading for a recession again", and that the data would almost certainly prompt the Bank of England to roll out further stimulus.

While IHS Markit's reading on the UK economy was worse than most analysts expected, its verdict on the wider eurozone economy was more cheery.
Although business confidence dropped to an 18-month low, the overall pace of economic growth was in line with pre-Brexit trends, and employment across the eurozone rose.

Conservative voters voted against their economic interests, including voting where their jobs were going to be lost, over the issue of hatred and fear of immigrants.  This continues to be the propaganda manipulation of conservative low-information / emotional thinking potential voters.  They vote stupidly.  Then they suffer.  Then they blame other people.

The agreement among economists about Brexit being a disaster is similar to the consensus about global warming among other scientists.

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