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Impact, Brexit, UK Growth, Macroeconomics, fx trader, forex

Tracking Economic Policy Uncertainty

Now, leading figures have revealed some new information that's worth paying attention to. Using the Economic Policy Uncertainty Index, they have discovered that the largest EPU spike since 2000 occurred in spring of this year, as a direct consequence of Brexit concerns.

To put this into perspective, the economic uncertainty this event has presaged eclipses concerns over a number of other momentous recent events, from the 9/11 attacks to the Second Gulf War, the collapse of Northern Rock, the global financial crisis, the European debt crisis, and the Scottish independence vote.

The implications of this data are important, as they indicate an exceptional level of economic policy uncertainty related to Brexit. With nearly 60 per cent of the newspaper articles on economic policy published in March and April 2016 concerning the event, it is clear that the fallout is a ripe topic for discussion, and a cause of great worry for many.

What This Means for the UK Economy

It is hard to translate these statistics into their potential impact on the UK economy should we leave the EU, but experts have not shied away from offering suggestions, and none of their predictions are positive. Most prophesy a likely decrease in industrial production, gross investment, and employment levels as a result, negatively impacting the country.      

It must be remembered that this is mere conjecture, yet some arguments undoubtedly have merit. Should the voters choose an exit from the EU, an extended period of uncertainty seems guaranteed, its fallout likely to be an ugly and protracted affair. 

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