British households are £1,500 worse off since the decision to leave the European Union was announced, according to one leading thinktank.
The Resolution Foundation, an independent UK thinktank which specialises in the standard of living, has today published statistics showing that households are roughly £600 per year worse off as a result of the subsequent economic uncertainty in the past two and a half years.
Following the Brexit result on June 24th, 2016, the price of gold rocketed up from £829 per ounce to a staggering £1,060 per ounce – a 27.8% increase. Since then the price steadily came back down – at one point touching just below £900 per ounce – but its current price of £1,012 per ounce puts if £183 higher per ounce now than it was pre-result. Demand for gold as an investment hedge and safe haven of wealth traditionally goes up in times of economic uncertainty, and the UK’s current political predicament seems to be no different.
Torsten Bell, director of Resolution, took to Twitter armed with graphs and charts to explain why the current Eurozone slowdown and the US/China trade war could not be played off as the primary reason for weaker GDP growth instead of Brexit.
But household incomes have done significantly worse than GDP - because consumers have faced higher inflation (driven by sterling falls driving up import prices). Another reason not to be so relaxed about big falls in the value of the pound if driven by worries about our economy pic.twitter.com/V5QSfSARGI
— Torsten Bell (@TorstenBell) February 11, 2019
The news comes at the same time that the Office for National Statistics reported a 0.4% contraction in GDP between Q3 and Q4 last year, with UK manufacturing now in recession.
Figures published by the ONS today showed that UK GDP growth in Q4 (October to December) was at 0.2%; down from the 0.6% in Q3. The ONS report blames production and manufacturing as the primary causes for the economic slowdown. For production, all four sub-sectors (Mining, Energy, Water, and Waste) were down in unison for the first time since the financial crash in early 2009. Manufacturing also fell for the second quarter in a row – again, a trend unseen since late 2008/early 2009.
Speaking on behalf of the Office for National Statistics, Rob Kent-Smith (Head of GDP) attributed the decline in GDP growth to the automotive and steel industries, whilst also citing the decline in construction.
“Declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy” said Kent-Smith. “The UK’s trade deficit widened slightly in the last three months of the year, while business investment again declined, now for the fourth quarter in a row.”
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You can read the full Resolution Foundation report here, and the ONS report on the state of the UK’s GDP here.
