Will the British Economy’s Stunning Resilience Last?

Immediately after the referendum on June 23, 2016, there was substantial fear that Britain’s economy would slump. However, the economy has done much better than expected, helped by the pound’s depreciation, among other factors. Expectations increased, but we still expect the uncertainty surrounding Brexit to affect the United Kingdom, sooner or later. The impact of price increases on households’ real spending is already one sign of the coming weakness. The scope of the fallout from the Brits’ decision will be clearer once we know what happens with the negotiations now getting underway between London and the other European capitals.