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First signs of UK economy losing momentum post-Brexit vote, says credit rating agency S&P | First signs of UK economy losing momentum post-Brexit vote, says credit rating agency S&P |
(about 5 hours later) | |
First signs that the UK economy is slowing as a result of Brexit are starting to trickle through, according to Standard & Poor’s. | |
In a report on Wednesday, the rating agency said that while UK financial conditions are still broadly favourable to growth, recent figures indicate a softening demand for funding, both from businesses and from households. | |
“While corporate financing costs have continued to edge even lower, thanks to an ultra-accommodative monetary policy, demand appears to have started to slip somewhat following the Brexit referendum,” S&P writes in the report. | |
The analysts write that, going forwards, the favourable conditions of lending “will not be able to completely offset the expected adverse impact of pronounced Brexit-related uncertainty and the inflation squeeze on household budgets in particular”. | |
Despite the generally better-than-expected short-term performance of the economy since last June’s referendum, most economists still believe that Brexit will end up being damaging for the UK economy. | |
The Bank of England has forecast growth of about 2 per cent in 2017, but it expects this to fall to 1.6 per cent in 2018. | |
Leading analysts from three City of London financial institutions said in January that they expect the cost of Prime Minister Theresa May’s hard Brexit to add up to between 5 per cent and 10 per cent of GDP by 2030. | |
Separately, research from the Bank of England in February suggested that a fifth of firms are under-investing because they do not feel that they can get the bank credit they need to expand. | Separately, research from the Bank of England in February suggested that a fifth of firms are under-investing because they do not feel that they can get the bank credit they need to expand. |
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