ExpertEye European Automotive Report Q3 2016 | Page 26

United Kingdom – The Brexit continues to cast a shadow

.

Before the Brexit referendum many economists were forecasting doom and

Economic Forecasts

2015 2016 2017 2018

gloom to a degree which failed to materialise after the result. Whilst we are

GDP growth (%, yoy)

2.2

1.9

1.0

1.2

currently in a period of uncertainty most are now predicting growth will slow

Inflation (%, yoy)

0.0

0.7

2.5

2.6

in 2017 as a result of the referendum result. However with the recent deal

Unemployment (%)

5.3

4.9

5.2

5.6

Public budget balance (% of GDP)

(4.3)

(3.5)

(2.8)

(2.3)

Gross public debt (% of GDP)

89.1

89.2

88.9

87.5

Current account balance (% of GDP)

(5.4)

(5.6)

(4.9)

(3.3)

struck with Nissan and Jaguar Land Rover likely to get a favourable deal on
electric vehicle production and healthy domestic demand, the European
Commission’s “EC” autumn 2016 predictions look more than a little
pessimistic. In fact the EC admit that their latest forecast of GDP growth of

115

the Q4 and into 2017. However that same fx effect is set to hit household

110

2016 09

2016 05

2016 01

2015 09

2015 05

2015 01

2014 09

2014 05

2014 01

2013 09

2013 05

2013 01

2012 09

2012 05

2012 01

2017 forecast underpinned by stronger net exports. However as the UK will

90
2011 09

The EC currently expect 2018 to see a slight recovery over their pessimistic

95

2011 05

growth closer to 1.4-1.5% looks more realistic for 2017.

100

2011 01

whammy on domestic disposable income. Taking this all into account GDP

105

2010 09

sterling and as oil prices start to increase again it will act as a double

UK

120

weak sterling should stimulate exports whilst tempering back imports over
budgets as the decline in oil prices has been partly wiped out by the fall in

Europe Average

2010 05

Whilst quarter 3 growth of 0.5% is only in line with the last six quarters, the

125

2010 01

1.9% for 2016 is higher than their spring forecast.

RV Index: 36 months / 60,000 miles

be moving ever closer to Brexit and no doubt negotiations will be getting
ever more strained the ensuing uncertainty could keep sterling subdued,
imports expensive which means inflation will be running above the Bank of
European Automotive Report - 2016 Quarter 3

Sources: European Commission – Economic Forecasts Experteye AG - RV Index
Bowkett Auto Consulting Ltd - Forecast vehicle sales

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