The manner and the effects of the UK's exit from the
European Union are riven with uncertainties.
But, four months on from the referendum, we have a clearer
picture about the near term consequences for the economy.
After a slump in the aftermath of the referendum many measure of
activity, especially in the consumer sector, have bounced back. One
of the strongest recent releases was Deloitte's consumer
confidence tracker. It reported that in mid-September optimism
among the 3,000 adults surveyed rose to the highest level in 5
years. Consumers may be a good spirits but, as we observe below,
the same does not hold for the corporate sector.
Economists reacted to the referendum result by sharply reducing
their forecasts for UK growth for this year and next. The
subsequent resilience of much of the economic data has quelled
fears that the UK might fall into recession next year and has
generated upward revisions to growth forecasts.
