“The family ties and bonds of affection that unite our two countries mean there will always be a special relationship between us,” declared Theresa May.
The British Prime Minister could have been talking about America, during this weekend’s trip to Washington, the first foreign leader to visit President Trump.
But she was actually referring to the Republic of Ireland – words so warm as to be, until relatively recently, unthinkable from a Conservative party leader.
UK manufacturing expanded at its fastest pace for two-and-a-half years in December, according to survey data released last week. Britain’s PMI manufacturing index soared to 56.1, up from 53.1 the month before – where readings above 50 indicate growth.
Our all-important services sector – no less than four-fifths of our economy – is also buoyant. Services growth hit a 17-month high last month, the PMI services index reaching 56.2, as employers saw a pick up in both new orders and jobs.
Goodbye 2016 – and, in the minds of many, “good riddance”. There’s no denying that the UK’s Brexit vote, combined with “The Donald” winning the US election have made this year, for some, an annus horribilis.
The grim drumbeat of on-going terrorists atrocities and, at the other extreme, the passing of an unnervingly large number of much-loved cultural figures, means we can all agree 2016 has had its share of bad news.
Last week’s Autumn Statement has provoked an extended gloom-a-thon. Those hoping to reverse the UK’s Brexit referendum, inevitably, were out in force. Scandalized at not getting their own way, countless political and media bien pensants have been doing their utmost to talk down the British economy ever since the vote went against them five months ago.
The negativity that’s followed Chancellor Phillip Hammond’s first Commons set-piece is just their latest attempt to spread panic and cower the government ahead of crucial negotiations on our European Union exit.
Has there ever been so much uncertainty surrounding an Autumn Statement? Phillip Hammond, while a significant player within the Conservative party for some time, has become Chancellor despite having little public profile beyond the “Westminster bubble”.
The fiscal views of the UK’s bean-counter-in-chief, moreover, remain something of an enigma. No-one seems able to say definitively if Hammond will continue with the Tories’ “austerity programme” or, in a rhetorical reversal, “loosen the purse strings” instead.
So, the UK is still growing quite well, despite the country voting to leave the European Union back in June. Our economy expanded, we learnt last week, by 0.5pc between July and September compared to the quarter before. That amounts to a buoyant 2.3pc annual growth rate. So does that mean everything in the UK garden is now rosy? And were Brexiteer-economists like me right? The answers are a definite “no”, and “maybe”.
What is now clear, and accepted by all but the most ardent anti-Brexit campaigners, is that the slew of pre-referendum scare stories warning of a “sudden and considerable fall” in economic activity if we backed Leave just over four months ago were nonsense.
The pound has had a slightly less volatile week. While dipping back below $1.20 on Tuesday, sterling has recovered to just under $1.23 at the time of writing. Despite the rally, the UK currency is still around 5pc down on its dollar value before early October’s Conservative Party conference – where Prime Minister Theresa May hinted she would opt for a “hard Brexit” settlement, one ruling out “membership of the single market” and prioritizing stricter immigration controls.
This fall in the pound has been sparked, as opposed to caused, by these early political skirmishes linked to the UK’s exit from the European Union. There are solid, fundamental reasons, in other words, beyond Brexit, why the pound needed to come down For starters, the UK has the largest current account deficit in the G7 – among the biggest in our peacetime history. Our annual budget deficit, despite years of “austerity”, also remains extremely large.
It’s been another bad week for “Remoaners”. Those who warned the UK economy would nosedive if we voted for Brexit faced another wave of broadly favorable data.
Since the UK’s historic referendum in June, the widely-threatened Brexageddon hasn’t happened. On the contrary, consumer confidence has rebounded, retail sales are up and the housing market has remained firm – pleasing homeowners while further exasperating first-time buyers.
The UK economy grew by 0.6pc during the three months to the end of June, we learnt last week. You might think our second quarter growth performance, equivalent to a buoyant 2.2pc annual rate, was rather impressive. Then again, you might not.
That’s because pretty much every piece of UK economic news is currently being presented through the prism of Brexit. No matter that our vote on European Union membership was just five weeks ago. And no matter that we’re unlikely formally to quit the EU much before 2019.
It’s now over a month since the UK voted to quit the European Union. We’ve since seen considerable financial volatility and some investments put on hold. Having said that, UK shares have come roaring back amid growing signs the British economy is actually bearing up quite well.
Far from going “to hell in a hand-basket”, as so many sneering Remain campaigners insisted after our historic referendum on June 23rd, the UK remains commercially buoyant, with consumer spending and labour markets so far appearing to take Brexit in their stride.