So far the effects of Brexit on UK growth have been muted. Most
activity data published since the referendum have come in on the
high side of expectations. The pace of growth slowed a bit in wake
of the referendum, but not much, and less than most had feared.
Last week the Bank of England upgraded its forecasts for growth
in 2016 and 2017. Agreed, the Bank, in common with virtually all
forecasters, expects the pace of UK growth to slow sharply next
year and beyond 2017. But talk of recession in 2017, which was
widespread four months ago, has all but disappeared and the
near-term Brexit slowdown looks a bit less threatening than it did
in late June.
None of this is to say that we should be sounding the all-clear
on Brexit. That would be reminiscent of the apocryphal story of the
man who hurled himself off the top of the Empire State Building and
was heard to remark, as he passed the 18th floor, "So far, so
good".
