Archives: Blog Brexometer

After the rise back into the black last month, the UK remains just in the positive zone with a score on the Accountagility Index (AAX) for September of 5.04. The Index records UK political and economic health in a score out of ten, and any score above 5.00 is positive.

The Index last month was 5.10, so it dropped 6 basis points during an unusually quiet period for post-Brexit Britain. Parliament has been in recess and most indices have not moved materially. Of course the Brexit talks with the EU continue to create headlines, and there is a concern that little measurable progress to date has been made. Amongst data that did change were confidence in the UK Manufacturing sector at a four-month high, due to help from exports with sterling at a 20% discount to pre-Brexit levels; improved employment levels; and some encouragement around future trade deals outside the EU.

September Brexometer Reading

On the other hand, confidence in the key Services sector dropped, hiring in the South of England has gone flat, new orders in Construction are dipping, and markets have slipped from their highs of July. Predictions for economic growth next year have declined too. All worrying signs on the horizon.

As indicated last month, however, the current peak in the inflation cycle is not sustainable as the main fall in sterling will drop out of the calculation by October.

The Accountagility Index Rating for September

How will the other factors change over the coming weeks? What will October bring? Can the Brexometer stay above 5.00? Keep following the Brexometer to find out.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

Phew! The UK has moved back into a positive Brexometer reading for the month of August with a score of 5.10 after a dip into the red in July. The Accountagility Index (AAX) records UK political and economic health in a score out of ten, and any score above 5.00 is positive.

The increase of 15 basis points will be a surprise to some, because we have seen a series of negative headlines and stories resulting from the Brexit negotiations, which has in turn reduced economic growth forecasts for this year, and chipped away at business confidence levels. It is also undeniable that the Pound is still at a depressed level, languishing at its lowest ebb since last November. These aspects are reflected in the Accountagility Index, but this month they have been counteracted by positive signs that have not been focussed on in the news.

August Brexometer Reading

Inward investment jumped significantly, showing the long term attractiveness of the UK. Much of this is coming from our good old transatlantic friends, and the scale of the trade opportunity emerging with North America is encouraging.

The drop in both CPI and RPI shows (as predicted here earlier this year) that we are now past the peak of the inflation cycle created by Brexit and the drop in sterling. Markets continue to storm ahead. Unemployment has been steadily decreasing month on month, to 4.5% this time.

On top of that, the Queen’s speech was passed and the extreme political instability in the wake of the election has passed into a “new normal” level of uncertainty. The UK has taken a deep breath and is calming down. An example of this is the manufacturing sector that saw a high in confidence this month, with new orders getting a boost from exports.

The Accountagility Index Rating for August

Things have improved then. But what is to come?

Parliament is in recess and the silly season is upon us. So August will see plenty of funny headlines but no political turmoil. The inflation cycle is back on the way down, and this can be safely predicted to fall over the next six months. On the other hand, Brexit fears will persist and could have further impacts of confidence and growth. If the base rate ticks up later this year, it will feed into sterling and may move the pound up. A number of factors are in play.

What will happen in August? Can the AA Index stay in the black? Keep following the Brexometer to find out.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

For the first time in 2017, the Accountagility Index (AAX) has moved into negative territory with a score of 4.95. This is down 11 basis points from last month’s reading of 5.06. The index records UK political and economic health in a score out of ten, and any score below 5.00 is negative.

The ongoing political instability and the start of Brexit talks that appear to confirm the hard Brexit were the key downward drivers. Market reaction to the election result also contributed, and inflation continues to advance.

July Brexometer Reading

The Brexometer is still ahead of the nadir of July last year, when it dropped to 4.02, but has lost 34 basis points since a peak in March.

Businesses will be tracking different scenarios, based on this continuing political turbulence, and we are seeing our clients taking advantage of our agile planning solution to do just that.

The Accountagility Index Rating for July

In any “normal” year, the next two holiday months would be quiet, in terms of both politics and markets. However, the next month features a welter of new stats and figures which may reflect the new situation, as well as the delicate task that the Government has of getting the Queen’s speech through Parliament.

What will happen in July? Can the Brexometer return from the dark side? Keep following the Brexometer to find out.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

The Accountagility Index (AAX) dropped 16 basis points to 5.06 this month, as news of a hung Parliament cast a long shadow over political stability, the pound and inflation.

Interestingly, the progress of Brexit talks did not contribute to this fall, because the timetable is unchanged and the likelihood of a hard Brexit has receded.

June Brexometer Reading

Any score above 5.00 is positive. So at 5.06, and rising above the minute-by-minute political turmoil, it is possible to see that the UK economy is still showing positive signs; the market continues to rise, economic growth is still projected by the IMF at 2%, employment is rising and the UK debt ratio improved slightly too. So it is not all gloom and doom.

Whatever will happen next? Will the Brexit talks start on time on 19th June? Will we see a successful Minority Government being established and will Theresa be leading it?

The Accountagility Index Rating for June

Some things are clear however:

• Business confidence is being affected and this sentiment will be reflected in next month’s Index
• Inflation will continue to remain at current levels, or higher, driven by the weakness of Sterling

Keep following the Brexometer to find out.

We are sorry to have kept you waiting an extra few days for the Brexometer update this month. We felt that a reading conducted before the Election would be misleading. We hope it has been worth the wait.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

May risk on June election may pay off

The latest Brexometer reading shows surprising resilience despite political turbulence.

What a month we have had! The surprising announcement of a snap General Election by Theresa May has put the cat amongst the pigeons. Or rather, we now appear to be in the midst of a contest between a bloody difficult woman and a mutton-headed old wugwump, according to political commentary.

May Brexometer Reading

An equally big surprise is the resilience of the UK. The Accountagility Index (AAX) is flat this month, staying at 5.22, exactly the same as last month. Anything 5.00 is positive.

Despite the battering of the Index from the reduced political stability and heightened emotional temperature between UK and EU leaderships, the UK showed gains across other measures such as GDP growth, sterling index appreciation, markets and a surge in positive sentiment.

The Accountagility Index Rating for May

Who knows what further developments will be seen over the next month? Will the PM’s gamble work out? Our Brexometer reading could be swinging to and fro wildly as we head into the high emotions of the last few week of the election campaign. For those who enjoy following the Index, you will need to hang on a few extra days for the next instalment. The next reading will be taken on Friday 9th June, the day after the election, so that the result may be reflected in the score. Whatever happens, it will be worth waiting the extra days for!

More insight for Brexit followers

Interestingly, we took a mid-month measurement of the Brexometer on April 19th, shortly after the General Election was called. The Accountagility Index (AAX) fell 11 basis points to 5.11, mainly due to the increased political instability caused. The fact that the Index has risen 11 basis points over the past fortnight is testament to the underlying strength of the UK economy, with gains from higher growth, reduced inflation, stronger markets and a marked improvement in sentiment.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

Gathering inflation and Scottish threat to the Union stop the run…

After last month’s small increase, the positive run in the Accountagility Index (AAX) that started last November, has come to a shuddering halt. The Brexometer reading for April stands at 5.22, down from last month’s 5.29 level.

April Brexometer Reading

Whilst the overall picture was encouraging with employment, markets, business confidence and foreign investment all rising, there was a significant rise in inflation (CPI was up 60 basis points to 3.2% and RPI up by half a percentage point to 2.3%)

The additional complexity of the political scene, and the reduction in political stability as a result of the request for another Scottish independence referendum also pushed the Index down, as did the drop off in economic growth, to just below 2%.

The Accountagility Index Rating for April

The general picture is very mixed, with some positive signals easing, but analysts are predicting a stronger pound over the coming months. Will this also cause inflation to subside? The Brexit gun has been fired, but there is no let-up in the uncertainty about the negotiations. So the forces of bull and bear continue to compete…

As predicted, March was certainly an action-packed month, with many developments. Nevertheless, the Brexometer continues in positive territory. Any figure above 5.00 is positive.

What will April and the coming months bring? Can the UK spring back again, now that the winter is behind us? Keep following the Accountagility Index to see whether the economic climate will also improve during Q2.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

It has been a dead heat in the battle between the forces of bull and bear this month. The Accountagility Index for March shows a static picture at 5.29, up fractionally on the level of 5.28 last month. Markets have continued to rise to record highs. But are they ignoring the underlying weakening of key economic signals?

GDP growth has slackened in February, inflation has risen, and the pound continues to struggle on foreign exchanges. These factors have led to a reduced business confidence rating, still in positive territory above 5, but there is a clear easing happening.

March Brexometer Reading

The rejection of the Brexit bill by the Lords has not had an impact on the Index at this point, as it has had the effect of hardening the resolve of the Government to adhere to the timetable of invoking Article 50 this month. So the Brexometer continues in positive territory.

Any figure above 5.00 is positive.

The Accountagility Index Rating for March

Meanwhile a lower profile factor has turned this month; the UK debt ratio dropped slightly. Will this be a harbinger of a welcome longer-term trend?

March is set to be an action-packed month; keep following the Accountagility Index to see where the dial will point as we head into Q2.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

Continuing the trend of the previous three months, the UK’s economic position has once again strengthened with the Brexometer measure rising from January’s reading of 5.20 to a fresh high of 5.28

Any figure above 5.00 is positive.

February Brexometer Reading

The Accountagility Index shows that the UK is shaking off the dire forecast, winter weather and travel disruption to climb to a peak not seen since before the Brexit vote. The growth was driven by the increasing clarity around the Brexit timetable, with the government on course to meet its target of triggering article 50 by 31st March to kick off the leave process.

It was spurred also by a sizeable growth in the official UK GDP forecast for 2017 by the IMF of 1.1% to 1.5%. And it wasn’t hurt by the UK visit to the US, the first meeting with the new President of a foreign leader, which promises an early trade agreement following the conclusion of the Brexit negotiations.

The Accountagility Index Racing for February

Storm clouds remain on the horizon however. Inflation, caused by the weakness of Stirling, is rising strongly, and the UK debt ratio shows no sign of abating, standing at 86.2%.

Will the UK climate continue to warm up as we move towards spring? Follow the Accountagility Index every month to find out.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

Helping CFOs plan through changeable conditions

The health of the UK economic scene is improving again, as the Accountagility Index figure for January shows a bounce back to positive territory to 5.20, up from 4.99 last month. This figure beats the June 2016 level which was recorded before the Referendum.

Any figure above 5.00 is positive.

January Brexometer Reading

There were three factors pushing the Brexometer reading upwards:

• UK markets soaring to new highs as the FTSE 100 clears 7,000
• Business confidence reaches a peak last seen in mid-2015
• Emerging information on the timing of the invocation of Article 50 and the UK approach to Brexit negotiations

The Accountagility Index Rating for January

Meanwhile concerns remain with sterling still under pressure, inflation rising and Foreign Direct Investment figures do not yet reflect a number of recent good news stories about investment in London.

What will next month’s reading hold in store? Will the government hold its course on Article 50? Can the Index stay in the black?

Keep in touch with us and find out.

What makes up the Accountagility Index (AAX)?

The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources​

• UK economic growth – A key building block of UK prosperity
• Markets – Reflects the health of larger British companies
• UK inflation – An important measure which needs to be carefully monitored
• Sterling strength – Affects imports, exports and confidence
• UK employment – Impacts so many aspects of UK economic activity
• UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
• FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
• Sentiment – Can be often the most important factor in how the economy is perceived
• Political stability/environment – A must include measure which can have instant impact on the big picture
• Progress on Brexit negotiations – Casts a very long shadow over all things
• Progress of International trade talks – A vital indicator of the UK’s international positioning

Helping Executives plan through changeable conditions

The UK scene post-Brexit is undergoing another bump – but the good news this time is that it is UP, according to the Accountagility Index reading for December. The upward leap was caused by four positive factors.

The most significant one was the anticipation of the UK queue jumping from the back to the front of US trade talks, following the shock election result.

December Brexometer Reading

​The Brexometer is showing a rebound after November’s dip, and is now agonisingly close to parity at 4.99, up from 4.79 last month. A reading above 5.00 is positive.

There were four factors pushing the Brexometer reading upwards:

• The Trump election victory improved the prospects for international trade talks
• The increased positive business activity and sentiments
• Continued growth of employment numbers
• Sterling, though still weak, increased against the basket of currencies during the month

The December Accountagility Index

Meanwhile there is still confusion and concern about Brexit and a big debate around hard versus soft factors are keeping the Index just shy of a completely neutral reading of 5.00.

The ragged line of the graph shows how the Accountagility Index (AAX) has moved since the EU referendum in June, depicting the rocky landscape post Brexit. As anything above 5 is positive – we’re moving in the right direction – but the scene continues to be a rollercoaster.