Report indicates UK will bear brunt of Brexit shockwaves
European economies are proving more resilient than expected to the shock of the UK’s exit from the EU, according to post-Brexit analysis. The EC’s economic sentiment survey suggests the biggest impact of the vote is being felt within the UK. The survey posted an unexpected rise for July for the 19-country Eurozone, although the same measure for the UK showed a substantial fall. The research provides a clearer picture of the economic environment post-Brexit as businesses struggle with a complex and contradictory picture of the markets from recent surveys, many of which relate to the circumstances before the vote to leave the EU. Manufacturers' financial results are also for a more robust trading period before the UK’s vote, including Ford, which says that second quarter profit nearly tripled to $467 million as sales rose 7.5%. However, it has warned about the future amid estimates that the collapsing value of the UK pound has cost the firm $60 million in the second quarter and will go on to cost $200 million by the end of 2016 and up to $400 million in 2017. General Motors has similar long-term cost estimates for Brexit. Solutions to the problem are likely to revolve around either cost cutting or increasing prices, but Ford says it is considering all options while monitoring long-term developments in Europe.