Brexit: What we learnt last week

Millenium brexit
By Andrew Harbison, CA Today

22 August 2016

A round up of last week's biggest Brexit news.

1. Budget surplus smaller than expected

The public finances were lower than expected in July, according to figures released by the Office for National Statistics (ONS). The surplus from public sector net borrowing was at £1bn for July, down from £1.2bn last year and significantly lower than the £1.6bn expected by City of London analysts. 

The figure suggests that the government may breach the £55.5bn deficit target for 2016-17 set by the Office of Budget Responsibility at the time of the March budget.

Source: The Independent


2. Pensions: What next?

The downgrading of the pensions brief from Minister of State to Parliamentary Under-Secretary could be an indication that pensions policy has dropped down the list of the government's priorities in post-Brexit Britain, writes Christine Scott, ICAS Assistant Director, Pensions and Charities.

Christine said: "There is a long history of under-saving for retirement in the UK and as private sector pension provision is expected to complete the shift from defined benefit to defined contribution arrangements in a generation, it is vitally important that the UK Government does not take its eye off the ball."

The new Chancellor of the Exchequer, Philip Hammond, may give an indication of where the balance of power sits with regard to pensions policy in his first Autumn Statement.

Source: ICAS

3. Unemployment falls as EU workers increase

In the three months leading up to the EU referendum vote, the UK experienced a sharp increase in the number of EU workers employed in the country. 

Figures released by the ONS showed that there was an extra 89,000 EU citizens were employed in the UK in the three months to June. Despite this increase, the UK unemployment rate, and the number of people claiming jobseekers benefit, also dropped. UK unemployment is currently at 1.64 million, the lowest level since the start of the financial crisis in 2008.

Source: The Telegraph

Job centre

Image source: BasPhoto /

4. UK inflation rises post-Brexit

The ONS released inflation figures on Tuesday showing inflation coming in at 0.6% in July on the consumer price index (CPI). The figure better than predicted, and an improvement on the rate of 0.5% in June. 

The higher rate has been explained as a response to the fall in the value of the pound following the Brexit vote. The retail price index (RPI) was also higher than predicted, jumping from 1.6% to 1.9%. This in turn means rail fares, which are tied to the RPI, will rise by 1.9% next year.

Source: City AM

5. Brexit 'hampers' Co-op bank’s recovery plan

The Co-operative Bank announced on Thursday that its recovery plans may suffer as a result of “the macroeconomic uncertainty following the result of the EU referendum”. 

Although the lender's losses narrowed in the first half of the year from £177m to £204m during the same period last year, the bank's chief executive Niall Booker said that market conditions following the EU referendum result are “challenging for all retail-focused banks”.

Source: The Guardian


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