This is the worst chart we’ve seen so far about the coming Brexit recession:
UK GDP came in higher than expected at 2.2% for Q2, but that number reflects the economy before the June 23 EU referendum. The lines above are from a more recent survey of financial officers at companies. It shows that 80% of chief financial officers believe they will not be hiring in the next year, and will not increase capital expenditure over the same period.
They’re turning off the money taps, in other words.
The pro-Leave crowd think there isn’t a problem. Here’s the front page of The Daily Express, from yesterday:
Economists don’t get their data from The Express, however. HSBC analyst Elizabeth Martins, who produced the above chart, said in a note to investors yesterday that people who think the rosy GDP number from earlier this week means that life after Brexit will get better are delusional, because they’re looking at what already happened not what is ahead:
“The [GDP] data suggest that worries over an uncertainty-led slowdown ahead of the June referendum were unfounded — and will undermine any claims that an H2 downturn was already in the pipeline regardless of the Brexit vote. However, the backward looking data have little to tell us about the policy and growth outlook from here. Early indications suggest a sharp slowdown in Q3.”