Economists have been baying for Brexit blood since the get-go. The fact that Britain’s departure from the European Union hasn’t brought about the predicted economic earthquake is a sore point.
Apart from the slide in sterling, key economic indicators – consumer spending, business activity, house prices, wage growth – have all been solid.
British chancellor of the exchequer Philip Hammond even had to upgrade his growth forecast for 2017 this week amid the better-than-expected out-turn, albeit he did lower expectations for the succeeding years, which will encompass the difficult exit negotiations.
Nonetheless, he predicted real wages, a key indicator of living standards, would continue to rise during the period.
The Schadenfreude directed at Britain’s perceived hubris in exiting the EU has been thwarted, for now at least.
However, many believe the triggering of article 50, the formal mechanism for leaving the union, and the beginning of negotiations will cast Britain’s predicament in a different light.
Effectively, it is trying to forge a bespoke relationship with Brussels while maintaining the independence to broker its own trade deals elsewhere, against a wall of opposition from Europe.
Economies are an amalgam of individual, business and government spending and investments. At the hub of the wheel is consumer spending, accounting for about half of domestic demand. If this begins to deteriorate the climate in Britain could change rapidly. Accountancy firm BDO’s latest High Street Sales Tracker, released yesterday, pinpointed a 2.2 per cent fall in February, the steepest decline since 2009.
It comes as recent data and surveys indicate that consumers may finally be feeling the strain of rising prices linked to sterling’s depreciation.
British retailers, including department store chain John Lewis, supermarket Morrisons and Wickes owner Travis Perkins, said they were bracing for uncertainty.
"The majority of retailers' price hedges ran out at the end of last year, and inflationary cost pressures have forced them to increase prices, sharply in some cases," said Sophie Michael, head of retail and wholesale at BDO.
Is this the second Brexit wave? Economists are unlikely to make premature predictions this time around, given how wrong they were last year.
Many, however, insist the blowback from Brexit won’t come the until the deferred investment decisions leach into the real figures and sour sentiment. Either way, uncertainty reigns.