The biannual poll showed that consumers did not think their borrowing habits would change because of the vote, nor did most survey respondents think the leave vote would affect the availability of credit. The survey of 6,000 people also found that the majority said the vote had not had any impact on their personal financial position, with the net balance of households expecting to increase spending over the coming year fell only ‘a little’.
So that’s all good, then.
Last week, CBI’s industrial trends survey suggested that the health of UK manufacturing appears in better shape than anticipated. The survey of 482 firms reported that the overall level of orders had improved with its gauge rising to zero in the three months to December from -3 in November. This was significantly better than predicted by economists and the highest level in 20 months. Growth in manufacturing output was the strongest in over a year-and-a-half, while production fell in just four of 18 sectors, with mechanical engineering and the aerospace the main drivers of improvement. Rain Newton-Smith, CBI chief economist, said: “It’s good to see our manufacturers ending the year on a high note with growth in production the strongest since summer 2014 and total orders still robust.”
The British economy is certainly performing, well, better than expected, with official figures this week expecting to confirm solid growth of 0.5% during Q3.
And yet this to me feels like a false dawn, a phony war – or any other analogy I can think of to say this is not all the way it seems.
I was particular disturbed to read last week that that fine British institution Lloyd’s of London is preparing to open a subsidiary in another European country next year to safeguard against any barriers to EU markets. It is understood that the 328-year-old insurance market has whittled down its shortlist to five European cities, and a plan will be put to members of the society in February. Lloyd’s, which generates around 11% of its revenues within Europe, has been a vocal supporter of remaining in the EU and the market has now decided to focus its efforts on opening a subsidiary, which would grant access to all EU nations in the single market, rather than opening branches in every country where it does business. “We will continue to develop our plans on creating a subsidiary and will provide a detailed update to the market on the progress we have made early next year,” said a spokesman. “We believe it is in the interests of the City to have ease of access to the EU’s single market and we will continue to work with both the industry and the government in any way we can on this.”
Yes, yes and yes. I have said before how important the City is to the well-being of the UK economy and how crucial it is to maintain passporting rights and protect financial institutions. Another worrying development has been delivered by Japan’s big banks, who employ thousands of people in London. They have warned the Chancellor that they may have to move jobs back to the continent within six months if there is no clarity about Brexit. Senior Japanese bankers told Mr Hammond they may set up hubs in the EU to serve customers in the area, the Financial Times reported.
And that brings me on to the future of foreign direct investment. A survey by consulting firm EY said that more than a third of the 259 international companies polled think Britain will become a less attractive place to invest over the next three years, compared with 16% when the survey was last conducted in the spring. Just 29% of those surveyed think the UK’s attractiveness will increase over the next three years, down from 36%.
So what do we make of this? Well, the figures suggest multinationals are wary about the longer-term impact of the vote to leave the EU and the appeal of Britain as a destination for foreign investment is starting to look fragile. Not good at all when you look at our track record: the UK attracted record levels of foreign direct investment during 2015, remaining ahead of Germany as the leading investment destination in the EU. To maintain that performance, ‘’a clear statement needs to be made of the sectors that the UK chooses to prioritise,” EY said.
Yes please. And can we have it now. Before it all unravels before our eyes.