Greater Birmingham Chambers of Commerce
This Week in Brexit: The Economy
Pound sterling dipped slightly against the Euro and Dollar on Thursday, following the Bank of England Monetary Policy Committee’s announcement.
Matching analysts’ predictions (an unusual occurrence in post-referendum Britain) the BofE MPC voted unanimously in favour of no changes, maintaining the current interest rate of 0.25% (a historic low) and its quantitative easing programme at £435bn. However, it heavily hinted at further intervention in the near future, stating: “a majority of members expect to support a further cut in Bank Rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of this year”.
By close on Thursday, the pound was barely changed against the dollar at $1.321 and against the euro at €1.175
FTSE 100 & FTSE 250
It was a rocky start to the week for the FTSE 100. The index slid to its lowest level since the 3rd August on Tuesday following concerns that the Federal Reserve could raise US interest rates imminently.
By Thursday it had rallied somewhat partly off the back of a major acquisition for Informa and Morisons reporting a rise in sales and profits.
Similarly, the FTSE 250 fell on Tuesday but reported more positive figures on Thursday, closing up 0.69%.
Consumer Price Index data released on Tuesday showed a steady rate of inflation at 0.6%, indicating that the increased costs of imports (thanks to a weaker pound) have yet to be passed on to consumers.
Meanwhile, the Producer Price Index data revealed that import costs were up significantly for manufacturers on the year to August 2016, but only up 0.2% from July.
Based on Wednesday’s Labour Market data release, the labour market in the UK has seen little impact from the Brexit vote so far. The unemployment rate held fairly steady at 4.9% and the employment rate was also stable at 74.5%
And finally, the British film industry had lots of upbeat messages for the world at the Toronto Film Festival.
This Week at the Chambers
We like to keep busy at the Chambers. One Tuesday, we issued our response to the Consumer Price Index and Producer Price Index statistical releases (click here) using the opportunity to restate our key messages for our post-referendum Government.
On Wednesday we issued our response to the ONS Employment figures (click here) which showed a slight rise in both employment and unemployment in the region (if you’re wondering how this is possible, there’s a third category, “inactivity”, which saw a decline).
Our CEO, Paul Faulkner, also met with the Rt. Hon. Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy and Robin Walker MP, Parliamentary Under-Secretary for the Department for Exiting the European Union at a meeting of Chamber CEOs convened by the British Chambers of Commerce.
On Thursday we held a particularly productive Chamber Council meeting, part of which focused on discussing and refining our post-referendum activity (did you know? There are currently elections taking place for two vacancies onto Chamber Council - find out more and vote here and view the candidates’ supporting statements here).
We also delivered a consultation session on the Greater Birmingham and Solihull Local Enterprise Partnership’s Strategic Economic Plan in partnership with the CBI, FSB and IOD.
And we’ve got a busy schedule coming up. Next week our CEO will be taking part in the first Midlands Engine trade mission. On the 7th October we’re holding a briefing session with the Bank of England’s regional agent Graeme Chaplin (click here) and on the 11th we’re launching our Q3 Quarterly Business Report (click here) . We’ve also got a wide range of growth seminars, networking events and export support workshops on offer - take a look here.