Brexit vote hits UK’s economic strengths
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This month’s Brexit vote has wreaked havoc on the UK economy with billions wiped off markets and the pound hitting record lows.
The Bank of England’s Financial Policy Committee (FPC) has pointed out the five biggest risks that threaten UK’s economy, take a look:
1. Vulnerable markets
Markets are expected to remain fragile after UK’s Brexit vote sparked uncertainty globally. The FPC reckons the fall in markets could hurt world economies in the long run despite appearing to function well.
2. Global economy
The FPC highlighted risks to global economic health as investors tread with caution. The Eurozone countries are the worst hit with many struggling with bad loans.
3. Household debts
Household debts are “high by historical and international standards”, the bank’s financial committee warned. This is despite household debt dropping from its pre-crisis peak of 150 per cent of disposable income to around 132 per cent in the first quarter of 2016.
4. Commercial property prices
Commercial property transactions have seen a sharp decline after the UK voted Leave. This comes after the FPC warned earlier this year that commercial property prices were going up rapidly while yieds are falling.
5. Current account deficit
Britain’s deficit is not in the pink of its health either. It stood at 6.9 per cent of GDP, close to a record high.