The announcement of the result of the UK’s EU Referendum on Friday 24 June came as a shock to many people both at home and abroad. Within hours David Cameron had announced his resignation. The pound fell to its lowest level against the dollar for over 30 years. Stock markets around the world lost ground on the news. The UK was stripped of its triple A credit rating.
By 16 July the new Prime Minister, Theresa May, made it clear that “Brexit means Brexit and we will make a success of it.” From a consumer point of view there is some good news. Incomes are rising and employment is at an all-time high and house prices have yet to fall far from their pre-referendum levels.
While stocks and shares initially fell sharply on the news, both the FTSE 100 and FTSE 250 have recovered ground. The fall in the value of the pound is good news for exporters as their products become cheaper for foreign buyers; the devaluation acting as an enticing discount.
The Bank of England’s Monetary Committee has introduced a base rate cut of 0.25% and has indicated that further stimulus measures will continue to be applied if necessary to steady the economy. So, all in all many commentators concluded that the impact of Brexit has been less pronounced than had been predicted.
There will no doubt continue to be good and bad economic news in the coming months as events unfold elsewhere. In the short term at least, there is no reason to panic and every reason to adopt a ‘wait and see’ stance.