I usually avoid drawing conclusions from National Economic statistics until at least two years later, mainly because our early statistics are based on surveys, rather than actual numbers, and only once the all tax returns have been processed do they start resembling a true picture.
However, as all the Twit-terati have been having a field day pointing out that predictions about the UK economy post Brexit were all wrong, I would like to point out some salient facts.
A comparison of the UK and Euro Zone Current Accounts in 2015 and 2016.
As the Current Account is made up of actual Money Flows into and out of the country in respect of external trade and external investment income, it forms the most reliable measure of a country's financial well being.
Our Twit-terati have been telling us for some time now the Euro is in meltdown mode. However, the Twits do not look beyond their noses and fail to see the realities. The Euro Zone shows an improvement in it's real 'wealth growth' of 14% while the UK and USA reflect that they are deteriorating by 19% and 4% respectively.
In the case of USA the lower deterioration can be attributed to the commencement of oil stockpile sales under Obamha. This is scheduled to have worked out of the system by 2018/2019, with Trading Economic projecting -560 billion in 2020.
This would seem to fly in the face of all those reports we receive from the ONS about growth in the economy. To understand what GDP statistics are telling us, it is worth while to spend a few minutes and look at this simple explanation of GDP. It shows that the figures do not necessarily "tell it like it is!"
These figures are not a Brexit effect, but rather the result of a long series of Government policy decisions, from both political parties. This article, shows you why this situation was inevitable.
In any event because we are measuring actual payments, there is a time lag, mainly as a result of international trade credit lines (for example Japan does International Trade at 120/180 days). These figures don't include all the imports and exports of the calendar years concerned and also include some from previous years.
The figures are therefore only partially attributable to the Brexit effect. Until now the effect has only been on exchange rates. However as the normal hedging process adopted by importers unwinds these exchange rate effects increasingly appear in price of goods. With imports equal to 35% of GDP a 20% devaluation suggests a 7% adjustment in prices. Market competition might slow down that effect, but only at the price of lower profits by corporations totally exposed to the UK market place. Lower profits mean less available for investment and increased wages … slowly we enter the cycle of the 1970's!
Quo vadis Theresa May!