This was the year Brexit began to bite

Britain voted to leave the European Union in 2016, and its exit won't be official until 2019.But this was the ...

Posted: Dec 26, 2017 11:42 AM
Updated: Dec 26, 2017 11:42 AM

Britain voted to leave the European Union in 2016, and its exit won't be official until 2019.

But this was the year that Brexit began to bite.

The price of consumer goods spiked in 2017, business confidence slumped, growth slowed dramatically and the property market stalled.

One more blow: Britain dropped out of the world's top five economies.

Kallum Pickering, senior U.K. economist at Berenberg Bank, said the country's economy "should be riding high on the back of the ongoing global upswing."

"Instead ... the U.K. has missed out on the fun, with its growth rate slowing," he said.

Related: Why Britain won't have a trade deal before Brexit

The malaise crept in slowly, but has its roots in a sudden event: The EU referendum vote in June 2016, which caused the value of the pound to drop sharply.

"Consumers originally kept on spending after the Brexit vote, because at first, nothing really changed," said Howard Archer, an economic adviser to EY.

But the currency's plunge soon translated into higher prices on imported goods. Inflation, which began the year at 1.8%, had shot up to 3.1% by November.

"Inflation really started to move up late last year and there has been consistent pressure on consumer spending this year," Archer said.

Wages, meanwhile, grew only 2.2% on average in 2017. The squeeze has made consumers poorer in real terms, with less cash to splash out on purchases.

Retailers are now feeling the pain.

Spending in brick-and-mortar stores dropped 3.5% from the previous year in November. Visa expects spending to decline this holiday season for the first time since 2012.

Automakers have also had a terrible year: The number of cars manufactured in Britain fell 4.6% over the previous year in November, according to the Society of Motor Manufacturers and Traders.

Sales of new cars, which have also been affected by confusion over diesel regulations, declined 11.2% in November.

"An eighth month of decline in the new car market is a major concern, with falling business and consumer confidence exacerbated by ongoing anti-diesel messages from government," the industry group said.

The unemployment rate remains very low, but even the labor market is showing signs of wear and tear. Some 65,000 retail jobs have been lost since the Brexit referendum, for example.

Related: Brexit jobs tracker

The chances of a quick turnaround appear slim.

The Office of Budget Responsibility has slashed its growth forecast for 2018 to just 1.4%.

The Resolution Foundation says that average earnings, adjusted for inflation, are likely to stay below the level they hit before the global financial crisis until the start of 2025.

Related: The hard work on Brexit starts now

Meanwhile, negotiations between Britain and the EU have now moved on to their second phase, which will include their future terms of trade.

They will also attempt to negotiate a transition of roughly two years that would give British businesses extra time to adapt to life outside the bloc.

Industry groups say they need clarity as soon as possible. But talks could still fall apart.

"The key risk remains that the U.K. will opt for a hard Brexit with few follow-up arrangements for privileged access to the EU market," Pickering said.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 768624

Reported Deaths: 13993
CountyCasesDeaths
Marion1055891807
Lake569801031
Allen43032699
St. Joseph37344568
Hamilton37335426
Elkhart29783470
Tippecanoe23503230
Vanderburgh23240405
Porter19580327
Johnson18843392
Hendricks18089323
Madison13575347
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Monroe12575178
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Hancock8761150
Bartholomew8274157
Warrick8084157
Floyd8043182
Grant7378181
Wayne7239201
Boone7211105
Morgan6924143
Marshall6345117
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Noble600890
Henry5958111
Jackson517277
Shelby511598
Lawrence4928127
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Montgomery459292
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Clinton456055
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Ohio58411
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Ohio Coronavirus Cases

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Cases: 1125420

Reported Deaths: 20490
CountyCasesDeaths
Franklin1305631493
Cuyahoga1173952263
Hamilton825481261
Montgomery536581062
Summit489381014
Lucas43799834
Butler40064614
Stark33876939
Lorain26072510
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Mahoning22738613
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Clermont20425261
Delaware19169138
Licking16879227
Trumbull16829492
Fairfield16825207
Medina15880276
Greene15565254
Clark14366308
Portage13450218
Wood13358201
Allen12064245
Richland11748213
Miami11047228
Wayne9275228
Columbiana9216236
Muskingum9144137
Pickaway8755123
Tuscarawas8724255
Marion8716140
Erie8146166
Ashtabula7280179
Hancock7050135
Ross7031165
Geauga6975153
Scioto6726108
Belmont6224179
Lawrence5964104
Union591649
Jefferson5729162
Huron5644122
Sandusky5498130
Darke5448131
Seneca5380128
Washington5373111
Athens527260
Auglaize507787
Mercer491785
Shelby484397
Knox4621113
Madison448066
Ashland446198
Defiance439499
Fulton436875
Putnam4358104
Crawford4120111
Brown410462
Preble3956107
Logan392279
Clinton391466
Ottawa376481
Highland366668
Williams357378
Champaign349860
Guernsey331554
Jackson321954
Perry299050
Morrow294943
Fayette289350
Hardin279665
Henry277467
Coshocton273061
Holmes2726102
Van Wert252365
Gallia251150
Adams250958
Pike244837
Wyandot235557
Hocking222963
Carroll201449
Paulding180142
Meigs151540
Monroe137945
Noble137939
Harrison115438
Morgan111724
Vinton87517
Unassigned04
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