Egypt's unemployment increases to 7.4% in Q1 2021: CAPMAS    Egypt's Trade Minister outlines customs clearance conditions for imported electric vehicles    Egypt raises readiness at university hospitals for Eid Al-Fitr holidays    Egypt develops Suez Canal in line with international trade movement: Al-Sisi    Egypt, Saudi Arabia, UN discuss latest developments in Jerusalem    Egypt's stocks end higher on Tuesday, benchmark EGX 30 edges up 0.77%    Abu Dhabi's Aldar looking for more deals in Egypt's real estate sector – CEO    Rid-hailing Careem, Uber raise fares after fuel hikes    Opinion| Selection bias model    Egypt's Parliament discusses abolishing imprisonment for female debtors    India to procure 300k Remdesivir doses from Egypt's Eva Pharma    Arab Observatory for Human Rights condemns Israeli violations in Jerusalem    Egypt will locally manufacture first 2m Sinovac vaccine doses by June-end    Vax Live concert exceeds vaccine goal to raise $302m    2021 South East European Film Festival celebrates cinematic diversity of 18 countries    Sheffield Documentary Film Festival announces line-up for June edition    Lebanese pop star Carole Samaha to release new album this summer    African Union chair meets Egypt's Al-Sisi within regional tour to stimulate GERD talks    We want Egypt and Sudan to agree to second filling only: Ethiopia    Turkey seeks to restore 'historic unity' with Egyptian people: Erdogan    Altibbi launches first Arabic app to support mothers' Health in Egypt among $8.5 mln investments    Al Ahly face injuries as they take on Al Ittihad Alexandria    Elneny's Arsenal targets 'remontada' in Europa League semi-finals    Zamalek eye return to victories at expense of Smouha in Egyptian Premier League    Egypt's CIB first bank in MENA, Africa to receive Gender Equity Seal    Egypt buys 30 Rafale fighter jets from France    Direct flights between Russia and Egypt will resume in June, Ambassador    Egypt's Ahly is establishing a new stadium, expected to be 'sports complex'    Blinken presses Ethiopia's Abiy to ensure full withdrawal of Eritrean troops from Tigray    Forces opposed to Somali president control parts of Mogadishu    Nine people executed in Egypt over Kerdasa police killings in 2013    UEFA investigating Ibrahimovic's alleged ties to betting company    61 doctors died from coronavirus since start of April: Egypt's medical syndicate    Egypt targets 5.6% inflation rate in FY2020/21, 6% in FY2021/22    Egypt allocates EGP 132 bln to modernise railway system: Transport minister    Real Madrid not thinking about any Super League sanctions: Zidane    Total declares force majeure on Mozambique LNG after attacks    All the winners at the 93rd Academy Awards    Egypt's Ahly granted approval to build new stadium on Cairo outskirts    Aswan Int'l Women's Film Festival dedicates 5th edition to Kawthar Heikal    BREAKING: Egypt's information minister Osama Heikal resigns amid parliamentary criticism    'War was not Egypt's aim, but peace was the ultimate goal,' Sisi says on Sinai Liberation Day anniversary    Factbox: Key nominations for the 2021 Academy Awards    Old Cairo's Al-Fustat will be revamped on Egyptian President's directives    Veteran Egyptian journalist Makram Mohamed Ahmed passes away at 86    Allianz Egypt partners with IGNITE to equip brand ambassadors for 2021 Olympics    Hassan Allam consortium wins contract to manage, operate Grand Egyptian Museum    Seasoned Egyptian screenwriter Wahid Hamed dies at 76    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

UK to enter 'prolonged period of weaker growth': E&Y
Published in Amwal Al Ghad on 17 - 10 - 2016

The British economy will start to see deeper impacts from the Brexit vote over the coming six months with rising inflation and falling business investment, the consultancy firm Ernest & Young said on Monday.
So far the U.K. has managed to resist economic shocks from the decision to the leave the European Union, but expectations of falls in consumer spending, higher inflation and lower levels of business investment paint a more dramatic outlook for the upcoming months and years.
"We think over the next six months or so we will start to see the after effects of that vote coming to play," Martin Beck, senior economic advisor to the EY ITEM Club, told CNBC Monday.
"The falling pound is going to push import prices up, will raise inflation, that will depress consumers' purchasing power and as Brexit becomes more of a hard reality, the business investment is likely to suffer because of the uncertainty around what will be the U.K.'s trade future relationships with the EU."
According to EY's latest autumn forecasts, the U.K. should grow at a pace of 1.9 percent in 2016, but its GDP (gross domestic product) should reach only 0.8 percent in 2017. It is expected that consumer spending will be significantly hit by the Brexit vote, with a forecast growth of 2.5 percent for this year to 0.5 percent in 2017.
The consultancy firm also forecast inflation to peak to 2.6 percent next year before easing to 1.8 percent in 2018.
Beck recognized that "it is particularly difficult at the moment" to predict how the U.K. economy will perform. "We don't really know how the future shape of the economy is going to evolve. We don't know whether we will have a 'soft Brexit' or a 'hardBrexit' ... Every day is bringing new stories, new rumors, the picture is constantly evolving," Beck said.
On Monday, The Financial Times reported that the British government is considering a plan to continue paying billions into the EU budget to keep having access to the EU's single market. However, it seems possible that the U.K.'s financial industry could lose "pass porting" rights as Prime Minister Theresa May looks to regain border controls.
The EY Item analysis expects the U.K. to opt for a "hard Brexit," which would mean that the EU and U.K. trade relationship would operate under World Trade Organization's rules once "Article 50" is triggered.
"In this scenario, offsetting the cost of losing unfettered access to the European single market will depend crucially on accessing cheaper world markets in food and manufactures. This will provide some compensation while the U.K. negotiates with the EU over the longer term," the firm said in a statement.
Given the high levels of political uncertainty, Beck suggested firms to take a "wait-and-see" approach over the next couple of months, until British lawmakers give more clarity as to what they aim to achieve once "Article 50" is triggered.
Source: CNBC

Clic here to read the story from its source.