POST Online Media Lite Edition



 

Thank you, Brexit. UK real GDP growth cut to 1.6%

Staff Writer |
Following the vote to leave the EU, the UK economy is expected to face challenges in the short term.

Article continues below






High levels of uncertainty are to lead to a slowdown in business investment and lower GDP growth.

In light of this, PwC has revised down its main scenario real GDP growth projection for the UK to 1.6% and 0.6% per annum in 2016 and 2017 respectively, down from 1.9% and 2.3%.

Quarter-on-quarter growth could fall to around zero in the last quarter of this year and the first quarter of 2017, but the UK would narrowly avoid a recession. Growth would then gradually pick up later in 2017 and beyond.

The UK’s vote to leave the EU has put London’s position as a leading international financial centre under the spotlight. To assess the potential impact that Brexit could have on London as a financial hub, PwC developed a financial services attractiveness indicator.

This analysis shows that London currently ranks top of the European list, considerably ahead of Dublin and Luxembourg in 2nd and 3rd place.

There are, however, some things that are not picked up in the indicator, such as the appeal of different cities and regions as a place to live, which can also contribute to the attractiveness of a financial centre.

One important factor that contributes to London’s success as an international financial centre is its access to the Single Market via passporting for financial services.

This applies across the EU, Norway, Iceland and Liechtenstein, and gives UK-based financial institutions unfettered access to the rest of the Single Market.

It seems, at present, that the only way for London to continue to benefit from passporting would be for the UK to join the EEA when it leaves the EU.

But given this scenario would probably mean free movement of labour continuing to apply, the UK making a contribution to the EU budget and EU-wide regulations still having to be applied in the UK, this could be a difficult outcome to achieve politically. So, what would losing (some) access to the Single Market mean for London?

PwC’s analysis shows that, everything else remaining equal, the loss of passporting could see London lose its place as the EU’s strongest financial centre as it would fall into 2nd place in the league table behind Dublin.

Its gap with Luxembourg, Paris and other EU cities could also narrow significantly.

Though factors such as a change in government policy, the extent of spare capacity which could support an inflow of FS activity or the presence of bodies like the European Securities and Markets Authority (ESMA) in Paris or the European Central Bank (ECB) in Frankfurt, could also see one of the other financial centres PwC has identified emerge as a new star performer.

The UK’s future trading relationship with the EU is the biggest source of uncertainty following the referendum. The main reason for this uncertainty is the lack of precedent.

For example, it is unclear whether the UK will be able to continue to access to the Single Market as it currently does now, or have to negotiate a free trade agreement, or even have to trade with EU member states under WTO terms.

PwC’s analysis identifies the 10 EU countries that export the most to the UK, relative to the size of their economies. Ireland (19.9%) and Cyprus (9.5%) sit at the top of this list.

Of the larger European economies, Germany exports the most to the UK relative to the size of its economy (3.7%). France (2.5%) and Italy (1.7%) don’t rank within the top 10.

These numbers are relatively modest at the macroeconomic level but could be more material for some industry sectors, so affected businesses in these economies do need to be prepared for different trade arrangements in the future.


What to read next

Recession not predicted for UK, says PWC
Brexit effect yet to be felt, say academics
PwC predicts Northern Ireland to have lowest growth among UK regions

U.S.: Widespread showers across the eastern half, severe thunderstorms in Montana into the Plains

 
The main thing making weather headlines Friday and into the weekend will be the widespread coverage of showers and thunderstorms across much of the central and eastern U.S., with a particular focus across southeast Texas, the Mid-South, and portions of Virginia.
 
 

Latest

Active drilling rigs fell yet again this week
New York Governor announces Sullivan County broadband project
Amazon to invest $20B in Pennsylvania for AI Infrastructure
China allows imports of rapeseed meal, soybean meal from Uruguay

NEWS

Scotland to host UK’s national supercomputer

Indian premier inaugurates world's tallest railroad in Kashmir
Air India plane with 242 people onboard crashes near airport in India's Gujarat
U.S.: Severe thunderstorms and heavy rain in the Central U.S.
U.S.: Severe thunderstorms and possible flooding in the East; extreme heat in the West
EPPO investigates major agricultural subsidy fraud in Greece
 

BUSINESS

Baker Hughes: U.S. oil rig count down by 9 to 442

Indonesia to launch salt farm project to end salt imports
Hyper Transfer project in Veneto, Italy hits new milestone
Indonesia ships 128 tons of L-Tryptophan to China
Green hydrogen from Africa more expensive than expected, study finds
Britain unveils 15.6 billion pounds investment in city transport
 

Trending Now

Global output of key food commodity crops on course for new records

Indian premier inaugurates world's tallest railroad in Kashmir

Air India plane with 242 people onboard crashes near airport in India's Gujarat

Russia's trade surplus falls 18.3% to $42.4 bln in January-April


POLITICS

Zimbabwe to ban lithium concentrate exports

Bulgaria to build 7,000 km fiber optic networks in poorly connected areas
Queensland: Crisafulli government gives green light for Paradise Dam early works
EU Commission selects 13 strategic projects in third countries to secure access to raw materials
Bulgaria meets criteria to join euro area on 1 January 2026
Premier leading Asia trade mission to promote British Columbia investment
 

Today We Recommend

Global output of key food commodity crops on course for new records


Highlights 

Amazon to invest $20B in Pennsylvania for AI Infrastructure

Point Blank Enterprises to create 300 jobs in Wakulla County, Florida

Google partners with Chile to deploy trans-Pacific submarine cable


COMPANIES

Point Blank Enterprises to create 300 jobs in Wakulla County, Florida

Google partners with Chile to deploy trans-Pacific submarine cable
Eurostar to launch direct trains from UK to Germany and Switzerland
Commission approves unconditionally acquisition of Intelsat by SES
Trigo Retail launches computer vision-AI powered loss prevention solution
Global consortium inks deal to build AAE-2 subsea cable line
 

CAREERS

Vodacom names new international markets CEO

David Andreadakis joins Loyalty Juggernaut as chief commercial officer
Tom Montali joins CSL as business development director
Concirrus appoints Steve O'Reilly as product manager
Jetcraft appoints Philip Baer as sales director in U.S.
Pere Mañé appointed as new CEO of Suanfarma
 

ECONOMY

Russia's trade surplus falls 18.3% to $42.4 bln in January-April

U.S. economy in Q1 revised up to 0.2-pct contraction
Japan loses top creditor position for first time in 34 years
NZ exports to EU jump 28% in first year of trade deal
EU generated €39.2 billion surplus in trade in agricultural products
California is now world’s 4th-largest economy
 

EARNINGS

Ericsson Q2 sales down but North America up

Lockton revenue $3.55 billion
Motorcar Parts of America Q4 sales $189.5 million
Limoneira Q2 revenue $44.6 million
Lululemon athletica Q1 revenue increased 10% to $2.2 billion
PVH Q1 GAAP EBIT $205 million
 

OP-ED

Micromanaging is the worst enemy of efficiency and teamwork

Niger set to monetize massive gas reserves through Saharan natural gas pipeline
Putting the brakes on EV folly that choked the market
Oil discovery in Kavango Basin may mean huge benefits for Namibians
Cape Town and Dubai battle over Africa's energy future
Is America going to lose its superpower status?
 

AGRIFISH

Brazil's meat production in Q1 2025 hits record high

Global output of key food commodity crops on course for new records
EU approves 15 million euros to help farmers in Czechia, Slovenia, Germany
Bluetongue virus restricted zone to be extended to all of England
South Africa suspends poultry imports from Brazil due to bird flu outbreak
Egg exports grow in April and Brazil expands its presence in new markets
 

LEADERSHIP

Study: Missing a deadline has a bigger impact than you might think

Employers prefer younger job candidates for AI roles although experienced workers perform same or better
Study finds workers misjudge wage markets
Some organizations may need to expand their hierarchical structures earlier than others
Study finds there's right way and wrong way to deliver negative feedback in workplace
Allyship is critical and its needs appreciation
 

CRIME

German court convicts four ex-Volkswagen managers of fraud in emissions scandal

EU fines carmakers €458 million for anti-recycling cartel
Commission fines Pierre Cardin and its licensee Ahlers €5.7 million for restricting cross-border sales of clothing
BHP, Vale agree to pay $30B damages for Brazil dam disaster
Commission fines České dráhy and Österreichische Bundesbahnen €48.7 million over collusion to exclude common compe
SEC charges Keurig with making inaccurate statements regarding recyclability of K-Cup beverage pod
 

Magazine

TRAVEL

Radisson Hotel Group debuts in the heart of Tunisia’s capital city, Tunis

Morocco’s first Radisson branded hotel opens in Casablanca
Buna channels, an unreal and beautiful part of Bosnia and Herzegovina
JW Marriott unveils Mindful Haven with opening of JW Marriott Hotel Nairobi
Sotheby's Sports Week returns with fantastic artifacts
Red Roof properties open in Michigan
 

SEA, LAND, AIR

Citroën C3 Aircross, the most affordable compact SUV with 7 seats

2025 Chevrolet Equinox stands apart with fresh looks and capability
Hill Helicopters HX50, luxury in the sky
Opel Movano becomes fully equipped camper van
Porsche Panamera, new hybrid variants
Dodge Charger, 670 horsepower of electric
 

DESIGN

Cold night, hot fire pit, cool entertainment

Embellish your home with PVC panels
You'll have to hurry if you want one of 20 new Louis Vuitton watches
Luxury duvet looks good, fells good and keeps you healthy
Vacheron Constantin, watches for life and more
Schüller kitchens, where functionality marries design
 

GADGETS

MESA/Boogie Celebrates 40-year partnership with John Petrucci

reMarkable 2, monochrome tablet for your thoughts and your eyes
OnePlus Ace 3V, first with Snapdragon 7 Plus Gen 3
ASUS Zenfone 11 Ultra, flagship with a reason
Samsung Galaxy S24 is photography powerhouse
Casette tapes are making a big comeback, and so are portable players
 

HEALTH

Hong Kong researchers develop needle-free flu vaccine with broad protection

World's first vaccines that don't need refrigeration entered trials
First patient enrolled in Phase 1 clinical trial of Akiram’s cancer drug candidate
FDA grants marketing authorization of first home test for chlamydia, gonorrhea and trichomoniasis
Human cases of anthrax reported in western Mongolia
One more barrier to developing vaccine for HIV removed
 

MEANTIME

Cost of keeping wind turbines out of sight

Mission to "weigh" all of Earth's forests from space launched
NASA's SPHEREx space telescope begins mapping entire sky
Russian academics, gas industry experts see undersea LNG transportation as feasible
India launches space docking experiment mission
World-first carbon-14 diamond battery made