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Brexit Britain banishes the blues for now

Thursday, January 05, 2017 - 01:44

There's still no sign of the Brexit blues for a British economy tipped to be the front runner among the big advanced nations this year. Even so, the latest readings point to the strongest inflation surge in decades. Laura Frykberg reports.

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Britain's economy is still in motion. Sales and hiring improved in the fourth quarter While the manufacturing PMI rose to 56.1 - its strongest reading in almost two years. There are indications that 2017 will see stalls though. With many manufacturers expecting to have to raise prices.. To pay for increasingly expensive raw materials... driven up by the plummet in the pound. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "Inflation carries two very significant risks to the UK economy. The first is that wage inflation accelerates, and that dents the capacity for companies to grow profits. The second is that consumers are not actually prepared to pay more. Meaning that there is a margin squeeze as input prices rise." Since the Brexit vote sales in housing have also increased. According to UK housebuilder Persimmon - by 15 percent. Construction too expanded at its fastest rate in nine months in December. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "I do think that what we are observing is some catch-up from the very dull days around Brexit when everybody was doom and gloom and there is now a much more realistic expectation that everyone can continue to do reasonably well in a post-Brexit decision environment." Although financial information company Markit - says that depends on how much more sterling slides. While the British Chambers of Commerce warns of inflation pressures ballooning at the fastest past since their survey was launched 20 years ago. The state of the pound could also unsettle the stomach of the service sector. Not yet though - PMI's show in December it rose to a 17-month high.

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Brexit Britain banishes the blues for now

Thursday, January 05, 2017 - 01:44