Britain sees bleak 2019 as Brexit woes mount

Bloomberg

The warning signs of 2019 are lighting up for the UK economy as Brexit comes to a head. Retailers are complaining about an abysmal holiday season, house prices are weakening, businesses are holding back investment and the swooning pound is fuelling inflation. With just a few months until the March 29 deadline to exit the world’s biggest trading bloc, there’s no clarity on whether Britain will crash out of the European Union without a divorce deal.
“You obviously need demand” for companies to do well, said Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors in a Bloomberg Television interview. “With what’s happening in the UK” at the moment, “it’s not an environment where people feel very confident.”
While Bank of England Governor Mark Carney says the financial sector is ready for whatever comes, and that interest rates may need to move up or down after Brexit, markets are paring bets on any more increases in the benchmark next year.
The doom and gloom across the economy was highlighted by web retailer Asos Plc, which warned that its Christmas shopping season got off to a disastrous start, confirming fears that even e-commerce isn’t immune from a crash in consumer confidence. The slump in economic activity was further evident in asking price for houses, which recorded the steepest back-to-back declines since 2012, according to data from Rightmove.
Reports highlighted the scale of the challenge ahead. The British Chambers of Commerce today forecast that business investment will grow by just 0.1 percent in 2019 — a cut from its previous prediction of 1.2 percent. Meanwhile, the Royal Institution of Chartered Surveyors said its sees house price growth coming to a standstill next year, as overall sales
volumes drop 5 percent.
“The uncertainty shock associated with leaving the EU now appears to be rearing its head, having been notable by its absence in the immediate aftermath of the referendum. We expect uncertainty to linger in 1Q with the economy’s performance beyond that tied almost entirely to the outcome of the Brexit talks,” said Dan Hanson, Bloomberg Economics.