Money

The Brexit years in charts


Even before Friday night’s formal departure from the EU, the Brexit process has left an indelible mark on the UK. For three-and-a-half years, the political stalemate over Britain’s EU membership has created deep uncertainty, spilling over into areas such as the value of sterling, Britain’s economic performance and migration. Here, in nine charts, the FT summarises the Brexit years — so far.

Chart showing most important issues facing the UK over the past 13 years. After the financial crisis, the economy ranked as highest concern, with immigration replacing it in the run up to the Brexit referendum. Since that vote, Europe and the NHS have become the most important topics

Before the 2016 referendum, immigration was a far more important issue for Britons than the UK’s relationship with Europe. The EU barely featured on the Ipsos Mori issues index in the preceding decade, which was dominated by economic concerns triggered by the global financial crisis. 

Since the vote to leave, however, Europe has become the dominant issue, driven by uncertainty about the UK’s future relationship with the EU. The NHS, which has featured prominently in debates during the two general elections since the referendum, is a close second. 

Meanwhile, concerns over immigration have now largely dissipated, falling below the level of topics such as housing and the economy.

Sankey chart type showing how leave and remain voters voted in the 2017 and 2019 general elections. The Conservatives won a majority in 2019 by succeeding on two fronts: they consolidated the leave vote and also kept the lion's share of their remain votes. Meanwhile, Labour lost ground to both pro-remain parties and to the Tories

The Brexit vote was followed by two general elections which both attempted to resolve the political deadlock — but delivered very different outcomes. 

The snap election called by Theresa May in 2017 was an attempt to strengthen her negotiating position both in Brussels and at home. But the gamble didn’t pay off as a stronger than expected performance from the Labour Party resulted in the Conservatives losing their majority. 

Parliamentary paralysis peaked when MPs refused to pass Mrs May’s withdrawal deal three times, forcing her to resign in May last year. By contrast, the commanding majority the Conservative party achieved in December delivered an 80 seat majority which has allowed Boris Johnson to proceed with his plans to leave the EU.

Chart showing how sterling's value against the dollar changed after the Brexit vote: A big decline caused by the shock result, followed by a brief recovery which ultimately ended in further declines as a result of political gridlock and uncertainty

The value of the pound has been a gauge of Brexit sentiment since the EU referendum with currency market investors regarding Britain’s departure from the bloc as negative for the UK economy. “Soft” options, including access to the EU’s single market, have been much preferred to any sharp break from the bloc. 

READ  UK financial watchdog warns market at risk from no-deal Brexit

In the weeks before the vote the perceived likelihood of a Remain win pushed sterling higher. This optimism was replaced by utter shock when the result came — the 8 per cent fall against the dollar on the Friday after the referendum was the largest single day fall in a major currency since exchange rates first floated in the early-1970s. 

Further falls in 2016 and early 2017 saw the pound pushing against $1.20 — the lowest level since 1985. Through 2017 the currency markets adjusted to the idea of a soft Brexit but from mid-2018, political wrangling and the renewed fear of a no-deal Brexit resurfaced.

Chart showing how net migration to the UK for EU nationals has decreased significantly since the referendum while net migration for non-EU migrants has increased significantly

The referendum coincided with a striking change in the pattern of international migration to and from the UK. 

Net migration from countries outside the EU has risen consistently, with over 200,000 more people arriving in the UK than leaving in the 12 months prior to June 2019. 

Meanwhile, annual net migration from countries within the EU has moved in the opposite direction, falling considerably from a pre-referendum high of over 200,000 to around 50,000.

Chart showing how the number of Polish nationals in the UK has decreased from over 1 million to around 900,000 since the EU referendum

Official data suggests a number of factors have contributed to the reduction in net migration from the EU, including a substantially lower number of its citizens arriving in the UK for work-related reasons. But there are also signs that EU citizens already living in the UK have decided to return home since the vote.

A 'streamgraph' chart showing how applications from the EU for British citizenship have surged since the Brexit vote, but overall application levels remain below historic highs of 2013

Many EU nationals living in the UK have opted to apply for British citizenship, resulting in a noticeable spike in applications, both from EU founding member states and those countries, mainly in eastern Europe, who joined the bloc after 2004. 

READ  'I left school at 16 but launched a Michelin-starred restaurant'

Despite this surge in applications, the overall level remains below those recorded in late 2013 when a flurry of applications from south Asia and Sub-Saharan Africa sought to avoid the scrutiny of stricter language requirements in 2014.

Chart showing how first time applications for Irish passports from Great Britain-born applicants has spiked since the EU referendum

Retaining EU citizenship has been a priority for some Britons, with neighbouring EU member Ireland offering the easiest route for many — a UK national is entitled to an Irish passport if either of their parents was an Irish citizen born in Ireland. The referendum has generated an unprecedented spike in applications for Irish passports.

Chart showing how Brexit's impact on staff numbers at international banks in London is relatively limited in terms of staff numbers. Many banks have revised downwards their initial predictions of Brexit-related job losses

FT research in March 2019 suggested that the vote to leave the EU had a relatively small impact on the City of London by that point, with many institutions revising downwards the likely number of staff cuts in London compared with previous estimates. 

Despite this apparent resilience, there is evidence to suggest that lingering uncertainty over Brexit and London’s future relationship with the EU has damaged its attractiveness as a financial centre.

Line chart showing how confidence in personal financial situation remains mildly positive but feelings about the outlook for the wider economy are very much worse

Strong consumer spending since the referendum, fuelled by low inflation and low interest rates, has been the main driver of economic growth since the Brexit vote. But consumer confidence appears fragile, with sentiment relating to personal financial affairs only mildly positive. 

Sentiment about the general economic outlook over the next 12 months is markedly worse — the Bank of England on Thursday downgraded its medium term economic growth forecast.



READ SOURCE

Leave a Reply