The central message of the Remain campaign pre-Brexit was that the economy would crash, but let’s see what’s happened so far.
George Osborne and David Cameron delivered a series of warnings spelling out just how risky they thought leaving the EU would be to the British economy.
Now, 280 days since the UK voted to leave the EU, Theresa May has formally announced the UK’s intention to leave by triggering Article 50.
How has the economy performed during these 280 days? Has the prospect of Brexit damaged the UK’s finances, or has it just been a distraction?
The value of sterling plummeted after the referendum
In the wake of June 23rd – the date of the referendum – news sites and social media were filled with images of a dramatic fall in the value of the pound.
The result came in around 4am on the morning of June 24th; the pound plummeted from €1.31 to €1.23 before falling to a then all-time low of €1.16 on July 6th.
The following few weeks saw the pound fall even further against the euro, reaching a low of €1.10 before recovering to €1.15 at the start of this week.
Against the dollar, the pound’s collapse has been more pronounced due to a very strong US economy. At the moment a pound will get you around $1.25, which is down from $1.40 before the Brexit vote and among its lowest value for more than a decade.
The FTSE 100 has been recording record highs in the past few weeks and has shown a consistent rise since the vote last June.
It reached a record high of 7,429.81 at the start of last week, which is equivalent to a 20pc rise compared to 6,185.61 at the beginning of June 2016.
Similarly, the FTSE 250 index has recovered after an initial post-Brexit drop and now stands at just under 19,000.
Despite strong performances from the FTSE 100 and FTSE 250, the FTSE local index has not performed so well since Brexit.
Despite fears that a vote to leave would lead to companies being more cautious when looking to the UK as a sound investment opportunity, there have been many major investments since last June.
Toyota recently announced plans to invest £245m in its car plant in Derbyshire. This move, which will also be backed by over £21m of government funding and, according to business secretary Greg Clark shows the UK “remains one of the best places in the world to do business.”
Toyota’s massive investment at Burnaston follows a string of recent commitments, allaying fears that the country would struggle to attract new business in a post-Brexit Britain.
The UK economy has shown continuous growth in the months following the vote, and Chancellor Philip Hammond is predicting an increase in growth this year.
The economy grew by a reasonable 0.7% in the fourth quarter of 2016. This is up from 0.6% in the third quarter of 2016 and is the same figure recorded by the ONS in the fourth quarter of 2015.
It is predicted to rise by a further 2% in 2017, according to the Chancellor, before slowing down again in 2018.
The Office for National Statistics recorded a 2.3% increase in its CPI in the year to February 2017. This is the biggest growth since September 2013 and continues the upward trend in inflation growth that started in late 2015.
While this increase shows an increase in the value of the pound last week, the latest earnings growth forecasts that inflation will outstrip earnings for about six months in 2017.
House price growth has slowed down since the EU referendum last June, but the extent to which this is due to Brexit is far from clear.
Prices grew by 9.4% in the year to June 2016, but this fell to 5.3% in the year to November 2016 before recovering to 6.2% at the latest count.
While Brexit may have contributed to this fall, the new Stamp Duty surcharge on second homes probably played a big role.