Brexit hits UK economy says new report

A new report claims that Britain's ‘Brexit’ vote to leave the EU has caused a "dramatic deterioration in economic activity”, which the BBC has compared to the last financial crisis.

Recently published data from IHS Markit's Purchasing Managers' Index, or PMI, shows a drop to 47.7 in July, the lowest level since April in 2009. A reading below 50 indicates contraction.

In plain English, managers who buy stuff for companies are ordering a little less stuff.

Manufacturing and service sectors saw a decline in output and orders, but exports picked up, driven by the weakening of the pound.

You might ask how the report concludes that we are producing less and exporting more?

More than 650 services companies, from sectors including transport, business services, computing and restaurants were surveyed for the report.

They were asked: "Is the level of business activity at your company higher, the same or lower than one month ago?" And manufacturers were quizzed as to whether production had gone up or down.

The PMI is the first major report to measure business reaction to the result of the UK referendum held in June when 17 million people voted to leave the EU.

Bearing in mind it has been just over a month since the vote, during which time we have had a new Prime Minister and reshuffled Cabinet, it is far too early to judge whether or not Britain will grow outside the EU. After all, we are still in the EU!

New Home Secretary Amber Rudd said she would get immigration down to "sustainable" levels, which appears to abandon the previous administrations "tens of thousands" target.

Earlier this week in Germany Prime Minister Theresa May said she will not trigger the ‘Article 50’ leaving process this year, and the Brexit Secretary David Davis said the UK will not be out of the EU until 2018.

Other reports suggest that there will be no dramatic post-EU decline in Britain. This week a Japanese firm announced a deal to invest £24 billion in the technology firm ARM, and said that the Brexit vote made no difference to their decision.

This week, I spent some time in Trafalgar Square (see photo above) in central London and Covent Garden, and it was literally rammed full of tourists. Admittedly, this is the middle of summer, but I have rarely seen London so full of visitors spending their Dollars and Euro's, which now go a lot further with a lower Sterling Pound rate of exchange.

Life will go on with or without the European Union.

The stock market has recovered from early falls (but will always go up and down) and ends the week up, base rates have remained at half a percent and the weak pound is having massive benefits for tourism and exports.

The UK has always been an innovative and industrious nation, and has survived bigger issues than leaving the EU - not EUROPE. We will survive and adapt to the changes ahead and you too can live the life you want regardless of who is running the economy.

The key message for you, or even a business or a country, is to keep developing and never stop learning. One of my mentors, the late Jim Rohn, always talked of making changes to your inner world to change what’s going on in your outer world. Jim said: 

“If you will change, everything will change for you”.

If you enjoy motivational material, you might be interested in The Abundance Factor, a free movie featuring Bob Proctor, T Harv Eker and Dr Joe Vitalie.

The internet and digital age, or digital economy, has opened up a whole new world of learning and development. You no longer need to go back to school or university to learn new skills. At the click of a mouse, you can now find everything from a short instructional video to a full degree course online at a fraction of the previous cost. If you would like more information on a free course on how to survive and thrive in the digital revolution and discover the truth about making money online, click here.