Early signs of a ‘Boris bounce’ as UK confidence returns
British prime minister, Boris Johnson’s emphatic election win last month has led to a burst of optimism among British businesses and consumers, according to early signals from the economy.
Mr Johnson’s success in securing a large parliamentary majority, which ended a period of deadlock in Westminster, means Britain is on course to leave the EU on January 31 and start an 11-month, no-change transition period.
His victory also ended the prospect of a shift to the left in British politics.
However, some economists are sceptical about whether the pick-up in confidence will translate into a meaningful boost to growth.
Some British businesses worry that Mr Johnson’s refusal to contemplate asking for an extension to the Brexit transition period risks creating another “cliff edge.”
Accountants Deloitte said that 53% of chief financial officers were more optimistic about their companies’ prospects than three months previously.
Its survey chimed with the business expectations component of the IHS Markit-CIPS UK Services Purchasing Managers’ Index.
Nonetheless, the overall picture of the economy, from the survey, remained consistent, with no growth in the fourth quarter.
The public became much more upbeat about the prospects for Britain’s economy after the election, according to a survey by Barclaycard.
“There is some early evidence that a ‘Boris bounce,’ after the election victory, might be in progress, but the size and duration of any upswing will depend on how well the next stage of the Brexit negotiations go,” Capital Economics said.
