For a football player the only thing worse than playing badly is being left to stew on the substitutes’ bench.
From a purely statistical point of view, this could soon be the fate of the British economy - after Eurostat, the European Union’s (EU) official statistics agency, announced its intention to publish economic data sets that exclude the UK.
Eurostat said this was in response to strong demand from both institutions and the general public.
“Following usersˈ requests, Eurostat published on 10 April 2018 in its database a new aggregate, covering the EU28 without the UK for the most in-demand indicators, such as population, GDP growth rate and unemployment,” the agency said on its website.
Eurostat added it would still publish data sets that include the UK… for now.
While this may seem like a minor event it will be a dagger in the heart for those hoping Brexit might still be stopped in its tracks. There can be few clearer, if tacit, acknowledgements that the EU ship will sail on without the UK.
It’s sometimes the small things that hit home. And while this is undoubtedly a small change, and one that few will notice, it is a significant one. The Eurostat data will for the first time give economists and institutional investors a clear picture of the state of the European economy without Britain.
Commerzbank’s senior economist Peter Dixon highlighted just how important this development may turn out to be too. It will, he suggested to the Financial Times, shine a spotlight on the economic importance of Britain and the EU to one another.
Almost immediately the EU’s economy will shrink by 13 per cent, Mr Dixon said. That’s hardly small change. Moreover, EU member states’ contributions to the overall EU budget are based on the size of their economy. So the UK’s contribution to the EU’s bureaucracy will be sorely missed. Hardly surprising then that there was so much wrangling over the Brexit divorce bill last year.
There have apparently already been rumblings in Brussels about how EU member states will be encouraged to increase their contributions to the overall budget in order to make up the UK-sized shortfall, but so far no firm commitments have been forthcoming from the EU’s remaining members.
There are other areas where the Eurostat data could prove very useful. The UK’s contribution to the inflation picture, once taken out, its impact on house prices and unemployment and, of course, GDP data could provide a much better picture of the overall health of the EU economy.
Already some differing sets of data exist here, so that most analysts look at the inflation data for the Eurozone as opposed to the EU 28. But GDP for the EU 27 could prove helpful, as could unemployment data and so on.
Given that Brexit appears all but unstoppable, City institutions’ desire for reliable data is obvious.
As with most decisions, banks and the wider financial services industry in the UK want as much information as possible before making any strategic decision.
Whether the data will encourage them to go ahead with contingency plans they may have drawn up in response to the possibility of a hard Brexit is another matter. But they do now have a little more data to work with, for which many of them will be relieved.
For those Remainers still clinging to the hope that Brexit can be halted in some way however, this small change is yet another sign that the Brexit juggernaut is still speeding inexorably on.
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