The working assumption here has been that the immediate growth hit from the Brexit vote shock would be modest, reflecting supportive monetary trends and an improving global economic environment. A previous post argued for ignoring the high-profile but unreliable purchasing managers’ surveys and focusing on official labour market data – particularly vacancies numbers – to assess the validity of this assumption.
New data this morning support the baseline view. The stock of vacancies actually rose in the three months to August from the previous three months, partially reversing a fall in early 2016. The latest three-month change is consistent with quarterly GDP / gross value added (GVA) growth of about 0.4% – see first chart.
Claimant-count unemployment numbers were also reassuring, though are judged here to be less significant – vacancies are a coincident indicator of economic activity while the claimant count usually responds with a short lag. The number of claimants was unchanged in August from three months before, again suggesting quarterly GDP / GVA expansion of 0.4% – second chart.
July services turnover numbers due for release on 19 September will provide more clues on current-quarter growth.
