The U.K. Economy in 2016
The U.K. has been under pressure since its government’s decision to exit the European Union, economists, analysts and traders were all in the buzz of what the future for this country.
Although many have had doubts whether the U.K. can stay afloat in the midst of all the economic challenges it was about to face, the buoyant consumer spending kept the U.K. Economy growing at a steady pace of 0.6 percent on the final quarter of 2016 which marked a strong finish for the country despite the UK’s decision to exit the Union.
Many were skeptical that U.K.’s economy might slip into a recession but the economy’s resilience has confounded the forecasters. However, economists are still expecting a slow ascent because inflation affects the consumer’s ability to spend money.
In The fourth quarter, various sectors have grown while some have failed to keep up. The services sector was up by 0.8%, while the construction was higher by 0.1%.
There was also a sharp upturn within production sector which was mainly because of the pharmaceutical exports this pushed the sector to reach 0.7% total gains in the fourth quarter of 2016.
The British Pound
The pound fell dramatically after the Brexit vote, It then declined to a three-year low against the euro following Theresa May’s released statement that the UK would begin formal Brexit negotiations by the end of March.
The decline in the British pound is advantageous to exporters but this makes foreign holidays more expensive for British tourists, this also increases the import cost for manufacturers.
But there is a benefit of having a lower price of sterling. This being, the flight booking to the U.K. Rose by 7.1 percent after the vote, this would mean that the Tourism in the country would progress.