The BBC are reporting (HERE) the results of the Quarterly Economic Survey of the British Chambers of Commerce. This is the trade body representing 52 affiliated chambers of commerce with 75,000 members across the UK. Their surveys matter. It does not make happy reading. The key findings are : that the percentage of services firms attempting to recruit is at its lowest level for 25 years: Of those services firms recruiting, difficulties rose to a record high: Exports sales and orders are at their lowest level since the EU Referendum in Q2 2016.
Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:
“These figures reinforce what we are hearing from businesses up and down the country – the uncertainty over Brexit, and the lack of bold moves to boost business at home, are starting to bite.
“It should be a matter of grave concern to government that sales and orders both at home and abroad are stagnating. Weaker sterling is no longer proving a boon to many of our exporters, while consumer spending is failing to boost the domestic market.
“We have a vibrant and innovative business community that wants to invest and grow, but we are stuck in limbo while Brexit negotiations rumble on".
The overwhelming majority of economists, from The Treasury and independent organisations, forecast that Brexit would hit the economy in both the short and long term. That we have managed to get this far without a serious impact is perhaps a result of the can kicking and fudging that has characterised the negotiations up to now. The PMs constant mantra of getting "frictionless" trade with the EU has probably caused many companies to delay resourcing or relocating.
We are rapidly reaching the point where the truth is going to emerge. Frictionless trade is not possible outside the single market and the customs union. I think we reached a high water mark in the last quarter with unemployment hitting a low of 4.0%. The only way from now on is upwards.
You can see the whole BCC report HERE.
On another matter, The European Central Bank (HERE) is blocking a practice known as back-to-back booking that Banks were hoping to use to limit the damage that loss of passporting after Brexit would cause. This is the transacting of trades in London even when the trade was actually carried out in an EU country. The ECB have given banks until 2022 to "limit their reliance" on the practice. The FT were reporting this today but I think the ECB have long warned about "brass plate" operations not being acceptable so it cannot have come as a surprise. This is just another "benefit" of Brexit.
