Brexit’s countdown has started: on March 29th, the United Kingdom will withdraw from the European Union.
While markets are plummeting, some industries are predicted to be severly affected by Brexit. As 80% of the food is imported on the island, Brits might not be able to eat carrot, or even tea, reports HSBC in its latest study.
Moreover, the real estate market has lived a very bleak first week for this year.
What does it mean for the country and the economy, while the United Kingdom still hasn’t reached a deal with the European Union? Analysis.
Real estate market plunges
London has been boasting for years to be the most expensive place on Earth to buy a house. However, the first week of 2019 revealed bleak news that might hinder the industry for a while.
As the annual IHS Markit study shows, the British housing market lived its worst 12 months in 2018 since 2013, with an estimated growth of 0.1%.
As the industry’s optimism is pegged to large-scale #infrastructure projects, it’s crucial that @GOVUK makes sure projects don’t fall by the wayside due to the electoral cycle. Read my thoughts on the latest @cipsnews @IHSMarkit #construction PMI here: https://t.co/PKmooJDkkk
— Mark Robinson (@ScapeCEO) January 7, 2019
The report also showed that commercial construction has been stalling for months, as Reuters reported that the CPS construction purchasing managers’ index (PMI) “sank to 48.1 in September from August’s reading of 51.1, its lowest since July 2016 and far below all forecasts. Anything below 50 is considered a contraction”.
November's sharp drop in mortgage approvals doesn't look like a blip – indeed, surveys are consistent with further declines over the coming months: pic.twitter.com/P1GE3KbW45
— Samuel Tombs (@samueltombs) January 4, 2019
According to Samuel Tombs of Pantheon Macroeconomics, the current situation is quite easy to read: “The construction sector is entering its own recession. The government’s shift to a more accommodating stance in Brexit talks has done little to convince builders that clients will sanction delayed projects soon.”
As for Bloomberg, “Market is moderating due to low confidence, Brexit uncertainty”. Real estate is not the only industry that might be affected by Brexit… Food might be too, in a concerning forecast published by HSBC.
Food shortage might become real
If you live in the United Kingdom, your morning brew might become a luxury, according to HSBC. As its latest report shows, the country might undergo a shortage of the most popular food products, including carrots and tea.
As more than 80% of edible products are imported in the country, and Business Insider echoes that: “food shortages would happen within days of Britain’s current customs arrangements becoming defunct.”
HSBC reports also alerted that “carrots for sale in the supermarket on Thursday were in the ground in Spain on Monday”.
According to the report, supermarket chain Tesco is the best prepared for a post-Brexit food industry, while other stores might be very limited on supplies. As a result, Tesco went down from McCarthy’s team August rates TSCO down 24%, to a “buy” for 2019.
Date for vote on May’s confirmed
In the meantime, Brexit negotiations seem to have made a step further on January 7th as Theresa May’s vote was confirmed late in the day.
According to the BBC, MPs will vote on Theresa May’s Brexit deal next January 15th.
The news was confirmed while “a major exercise involving more than 100 lorries is being carried out in Kent to test out how to manage traffic queues near the Channel ports in the event of a no-deal Brexit”, the media reports.
As a reminder, the Prime Minister’s deal has already been agreed with several European countries, but needs to be passed by British MPs in order to be accepted.
Read our story: “Brexit: What We Learnt About the Art Of Negotiating”
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