May’s Brexit failure has hit the economy

Tear your eyes away from Westminster for a moment, and consider Morgan McKinley’s London Employment Monitor.

Today’s report is not good. Available financial services jobs in the capital in November were down four per cent month-on-month, and 39 per cent on the previous year. Job-seeker numbers are also down.

This is particularly worrying as yesterday’s ONS figures showed economic growth is slowing. The services sector, which makes up 80 per cent of the economy, is growing at the slowest rate since April 2018 – it’s growth, but not as we’d like it.

Brexit turbulence is holding back investment, and while December is not traditionally a busy time for job moves, we are getting to the point where economists and politicians must see the evidence before their eyes: there is only so much uncertainty the economy can withstand.

That’s to say nothing of the volatility – in markets and in Downing Street – on display yesterday, as the Prime Minister made the shock decision to postpone the parliamentary vote on her Brexit deal, originally scheduled for this evening.

The pound dropped to its lowest level in 18 months (since Theresa May’s self-inflicted loss of her majority in the snap election), after a day which saw Downing Street brief journalists that the vote was definitely going ahead mere minutes before officials revealed the contrary.

What happens next is anyone’s guess. A leadership challenge, a General Election, a no-deal Brexit, and even a second referendum are all now on the table.

Whether you believe that the government has been forced into a corner or that May has only herself to blame for this humiliating retreat, it will be yet another blow to businesses, many of which worked on the assumption that some kind of deal would be in place before the end of the year.

Now the Brexit volatility looks set to drag on until Christmas and beyond, with little sign that anyone in Westminster – not May, not Conservative revolters, not MPs on the opposition benches – has a clear plan for moving forward.

And while ministers may keep their jobs, it is the economy that is taking the hit. Already we are seeing the real-world impact of what can only be described as a monumental political failure.

May gave a bullish statement to parliament yesterday, repeating her position that the Brexit vote must be honoured. She is right, but her efforts to please all factions have resulted in all factions feeling displeased.

She has bought herself some time to feel her way through the gloom, but there is a growing sense that the lights are going out all around her.