Greater Birmingham Chambers of Commerce
This week in Brexit: The Economy
After a two week summer holiday, we are back with the latest happenings in the post-referendum world:
The impact of the falling value of the pound came in for mixed reviews this week.
The latest ONS Producer Price Index revealed costs for manufacturers had rocketed up 4.3% in July off the back of the weaker pound driving up costs for parts and products purchased from abroad. You can read our response here.
However, there was good news for retailers as the July ONS Retails Sales figures saw 5.9% growth in July compared to this time last year. This stronger than expected result has been accredited in part to the warmer weather but also the weaker pound encouraging overseas visitors to up spending. Watches and jewellery fared particularly well, seeing sales up 16.6%.
Where next for the pound has also been a topic of debate. While some London airports’ bureau de change came in for criticism for offering less than €1 to £1, Barclays had more buoyant news for travellers. They predict exchange rate appreciation of about 7% by year-end against the Euro.
FTSE 100 & FTSE 250
The FTSE 100 and FTSE 250 remain calm after the storm of the immediate aftermath of the referendum. Both are comfortably above pre-referendum levels.
The FTSE 100 hit a 14 month high on Monday. While it has since seen a slight fall, it closed 0.14% up yesterday (Thursday) evening with the big winners of the day in house building and mining. The FTSE 250 closed 0.6% up more than 500 points above its pre-Brexit level.
Pensions have also hit the headlines this week as pensions expert LCP raised concerns that FTSE 100 companies have seen huge increases in pension deficits this year.
It’s not just FTSE 100 companies who have been hit; the funding gap of British pensions has now hit a record high of £945bn.
Brexit has once again been named as the culprit with the double whammy of the referendum result and Bank of England monetary policy hitting bond yields.
This Week at the Chambers
At the Chambers, we’ve been cracking on with helping our members define their own, and our region’s, future in this post-referendum environment.
On Tuesday we held a West Midlands Combined Authority consultation event in partnership with the Black Country Chamber of Commerce and the Coventry and Warwickshire Chamber of Commerce. The event, at the fantastic iCentrum at Innovation Birmingham Campus, challenged the WMCA and delegates to share their thoughts on strategy and how the business and public sector can collaborate. For our write up, click here.
We’re also encouraging businesses to share their thoughts on the different functions it is proposed that the Mayoral WMCA could have. To take part in this consultation click here. The deadline for responses is COP 21st August.
For those interested in who the WMCA Mayor might be, we’re delighted to announce that we’re holding a business breakfast with the Labour Candidate, Siôn Simon MEP, on the 21st September, the first official candidate announced so far.
We are also continuing our Summer of Export Support, supporting members in exploring new markets and finding new suppliers and distributors. We’ve even launched a new Foreign Exchange product with our partners RationalFX.
Finally, on Monday we will be launching our latest Quarterly Business Report Survey. This will be our first QBR survey since the referendum and will give us a good indication of how businesses have been impacted to date and feel they may be impacted in future. Please do remember to take part; your responses really do matter.