Brexit scare stories are losing their bite. The Pound is falling nicely which makes Britain a very competitive place to manufacture. $1.50 in May/June is now $1.20 in October. Petrol prices should be £1.35 a litre, but are held at £1.15 or so. It shows how fat the profit margins were getting. Oil has recovered from its low of around $28 a barrel, to $48 a barrel. Yet the pump price never went below £1 a litre. It’s all about managing expectations and proves that prices bear little relation to costs. The £ could keep falling of course and put a squeeze onto the economy, but any fall from here to $1 or lower would most likely see a spring back a few months later. It will all settle down.
28 October 2016
Preliminary data released by the Office for National Statistics (ONS) yesterday showed that the UK’s GDP grew by 0.5% in the third quarter of 2016. This beat the latest consensus forecast of 0.3%, and the -0.1% predicted by the Treasury before the referendum in the event of a vote to leave the EU. Reacting to the figures, UK Chancellor Philip Hammond said, “I think it is right that we still prepare to support the economy during the coming period to make sure that we get through this period of uncertainty. All the forecasters suggest that next year will be slower.”
Separately, Japanese carmaker Nissan yesterday confirmed that it will build both the new Qashqai and the X-Trail SUV at its plant in Sunderland. Announcing the decision, Nissan CEO Carlos Ghosn thanked the UK Government for its “support and assurances.” Downing Street declined to comment on what specific pledges had been made to the company. However, Colin Lawther, a senior executive at Nissan, dismissed suggestions of a special deal, telling the BBC, “It’s just a commitment from the government to work with the whole of the automotive industry to make sure the whole automotive industry in the UK remains competitive.”