Brexit vote impact felt throughout UK economy

By Andy Bruce

LONDON (Reuters) - Britain was the weakest Group of Seven economy over the course of 2017 in terms of overall growth, and there are other ways that the vote to leave the European Union has left its mark too.

Below are a few examples of the impact of the 2016 Brexit vote.

For a previously published set of Reuters graphics on the impact of Brexit on headline economic indicators, click here:

MIGRATION

Net migration of European Union citizens into Britain almost halved in the 12 months to September, official data shows.

Immigration was a reason many Britons voted to leave the EU, but industry groups worry that Britain is becoming a less attractive destination for the workers they want - particularly in sectors such as engineering, construction and healthcare.

Google (NASDAQ:GOOGL) search data suggest the number of people in other EU countries looking online for jobs in Britain has hit a new low.

(For a graphic on Migration click http://reut.rs/2EMPVE1)

(For a graphic on Google searches click http://reut.rs/2CERTjy)

INVESTMENT

Britain has long lagged other countries in terms of investment.

While the Bank of England expects business investment to pick up this year, it remains muted considering the strength of the global economic upswing. BoE Governor Mark Carney has said Brexit explains the weak growth in investment in Britain.

Compared with their peers in the big EU economies, British manufacturers are the least likely to prioritize the kind of investments that improve the efficiency of their production, according to a long-running European Commission survey.

By contrast, British factories are also most likely to be simply replacing worn-out machinery, itself a consequence of weak prior investment, the survey has shown.

The weakness of long-term investment planning poses a challenge for finance minister Philip Hammond who wants to snap Britain out of its long-term productivity malaise by spurring business investment.

(For a graphic on Investment click http://reut.rs/2CEB4Wb)

INSOLVENCIES

British consumers have been squeezed by higher inflation caused by the fall in the pound after the Brexit vote, and weak wage growth, aggravating a decade-long rise in levels of personal insolvency.

The chart below compares wage growth in real terms against the number of individual voluntary arrangements (IVAs) - a type of insolvency short of bankruptcy - during each quarter in England and Wales.

While much of the recent sharp increase in IVAs reflects changes to regulation and the consumer debt market in mid-2016, there is a clear link between falling wages in real terms, and financial distress among consumers.

(For a graphic on Personal insolvencies click http://reut.rs/2EPzN4A)

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TOURISM

Tourism in Britain has been a winner from the Brexit vote. The fall in the value of the pound made the country a more attractive destination for foreign tourists while also encouraging British holidaymakers to stay at home.

However, the boom faded somewhat in the three months to September as growth in the number of overseas visitors slid to a one-year low.

Currency moves seem to have been a big factor. Visits from North America fell 5 percent in the year to September, reflecting a weaker U.S. dollar. But visits from the EU rose 4 percent as the euro strengthened further against the pound.

(For a graphic on Tourism click http://reut.rs/2EMXeLX)

TRADE

Last week Bank of England Chief Economist Andy Haldane said a combination of a strong global economy and the weakened pound had "worked its magic" on Britain by skewing economic growth toward trade rather than consumption.

The government's trade department points to figures showing net trade - the value of exports minus imports - made a positive contribution to economic growth for 2017 as a whole for the first time in six years.

Nonetheless, Britain's export performance in volume terms has been average by European standards, offering little evidence that the pound's fall since the Brexit vote has given exporters a big competitive advantage in an improving global economy.

Furthermore, net trade dragged on Britain's economic growth through the second half of 2017. Economists at JPMorgan (NYSE:JPM) say there is little to no sign of a boost from the weaker currency.

(For a graphic on Exports click http://reut.rs/2EQzKpb)