Brexit effects not felt yet in Britain, says ONS

The impact of the UK’s decision to leave the European Union has had little impact on the economy so far, according to the Office for National Statistics (ONS).

The data agency said official figures have yet to reflect the collapse in confidence predicted by some surveys since the referendum on 23 June.

One of those surveys was one published by IHS Markit called “dramatic deterioration”, which suggested both manufacturing and service sectors had suffered a decline in output and orders. However the body has since released surveys saying activity in those sectors has made a comeback.

The immediate impact of the referendum vote was felt on the stock market and the currency as uncertainty about the UK’s trade position and wider economic relations with the EU and the rest of the world rose significantly.

The value of the sterling depreciated 7.3% between early August 2015 and the referendum day in June 2016. Thereafter it fell by a further 9.5% by the end of July.

Despite this the fall in the pound prices have not been affected by much, according to the data. Producer’s input prices increased in July and August at the same rate as the previous two months.

House prices continued to rise in July at 8.3% but at a slower rate to June at 9.7%.

Manufacturing output saw a small fall of 0.9% in July across all sectors after similar falls in May and June, continuing at the same range since 2012.

Construction output was flat in July continuing a trend of broadly flat output growth since the start of 2015. In July however there was a negative contribution to construction output from private commercial sub-sector which could be a sign that retailers and other companies are holding back on investments.

Consumer spending is showing no sign of collapse in confidence with expenditure growing by 1.9% in July followed by a slight fall by 0.2% in August.

The employment rate also remained strong at 74.5% for the 3 months to July despite fears this would plummet after the vote.

The ONS has yet to see how the services sector, which makes up more than three-quarters of the economy driving growth since 2009, has been impacted by the Brexit vote. They are also yet to receive data on the effect on business investment.

With these figures missing and the information so far being short term indicators the post referendum picture is yet to emerge.

Chief economist at the ONS, Joe Grice, said: “As the available information grows, the referendum result appears, so far, not to have had a major effect on the UK economy. So it hasn’t fallen at the first fence but longer-term effects remain to be seen."