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Bank says UK households £900 worse off since Brexit vote

The Brexit vote has already hit the UK economy, which is now 2% smaller than forecast before the EU referendum, according to Bank of England governor Mark Carney.

Households are £900 worse off since the Brexit poll, he said: “Real household incomes are about £900 per household lower than we forecast in May of 2016, which is a lot of money.”

However, Carney added that there could be a "sharp pick-up" in business investment when a Brexit agreement is struck.

Inflation fell again in April to 2.4%, throwing further doubt on the prospect of near-term interest rate rises.

The BoE Monetary Policy Committee decided not to push ahead with an interest rate increase earlier this month following first-quarter economic growth of just 0.1%.  

Growth in manufacturing output slowed to its weakest in two years, according to a CBI survey covering the three months to May.

Manufacturers were more gloomy about their order books than at any time since November 2016.

Howard Archer, chief economic adviser to the EY Item Club, said the survey results suggested that the manufacturing sector had lost momentum and was “operating at a markedly lower level” to the second half of 2017.

UK retail sales were up in April as warmer weather brought shoppers back to the high street.

Seasonally adjusted sales volumes were 1.6% up on March, according to the ONS, after falling 1.2% month on month in March. But sales volumes over the past three months were just 0.1% higher than in the previous three months. 

The ONS said the underlying picture remained subdued, with the volume of goods sold over the past six months broadly unchanged.

“Over the longer term, retail sales growth has slowed considerably, with increases in food, household goods and internet retailers being largely offset by declines across all other types of retailing,” it said.

London house prices were 0.7% lower year-on-year in March, but other English regions still showed growth, according to ONS data. 

The average property in London cost £472,000 in March, compared to the English average of £241,000.

Property listings website Rightmove also reported a slowdown in property prices for the South East, which it said indicated that “the softening in the London market is now spreading to its commuter belt.”


Click here to read this week's Market Roundup and Company Focus on Marks and Spencer

 
Important Notes:

Main source of information: Company Report and Accounts, Bloomberg

 

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