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Weathering the storm

With 23 days to go until the UK leaves the EU and no resolution in sight, we appear to have reached one of the most intense phases of Brexit uncertainty. However, the latest figures have been a bit reassuring. The business activity index of the Markit/CIPS services survey rebounded in February and does not include the retail sector which – by and large – has fared better than the wider services sector this year. The solid increase in unsecured household borrowing in January suggests that no deal Brexit worries are not instilling more caution into consumers or lenders. And measures of consumer confidence appear to have bottomed out. Of course, the improvements have been modest and are only seen as good news because things had been expected to be so bad! And we wouldn’t rule out a further deterioration in the coming months. But the economy’s recent resilience suggests that the UK is better placed to bounce back after Brexit and weather the global slowdown than perhaps is widely assumed.

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