Tough Economic Outlook and Negotiations Lie Ahead For UK

It’s not exactly a glittering economic prize for the winner of this week’s election: slower growth, tepid wage gains, a depressed currency and a productivity problem that’s plagued governments for years.

Those challenges are compounding the disruption that Brexit is heaping on the economy, from faster inflation to concern about future trading arrangements. The Bloomberg Brexit Barometer has fallen in the past six weeks and is now in “windy” territory. Here’s what the victor of the June 8 vote will have to contend with in the coming years.

While Prime Minister Theresa May has previously lauded the U.K. for being the fastest-growing Group of Seven economy, that was far from the case at the start of 2017. In fact, you have to go back more than four years to find a weaker performance. The outlook for the rest of the year isn’t much better, and Guy Hands, chief investment officer at Terra Firma Capital Partners, says May isn’t offering answers.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.