Brexit and Uncertainty: Insights from the Decision Maker Panel

19 Pages Posted: 19 Feb 2019

See all articles by Nicholas Bloom

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Philip Bunn

Bank of England

Scarlet Chen

Stanford University

Paul Mizen

University of Nottingham; Bank of England; Centre for Economic Policy Research (CEPR)

Pawel Smietanka

Bank of England

Gregory Thwaites

London School of Economics & Political Science (LSE) - London School of Economics

Garry Young

National Institute of Economic and Social Research

Date Written: February 15, 2019

Abstract

The UK’s decision to leave the EU in the 2016 referendum created substantial uncertainty for UK businesses. The nature of this uncertainty is different from that of a typical uncertainty shock because of its length, breadth and political complexity. Consequently, a new firm-level survey, the Decision Maker Panel (DMP), was created to investigate this, finding three key results. First, Brexit was reported to be one of the top three sources of uncertainty for around 40% of UK businesses in the two years after the vote in June 2016 referendum. This proportion increased further in Autumn 2018. Hence, Brexit provided both a major and persistent uncertainty shock. Second, uncertainty has been higher in industries that are more dependent on trade with the EU and on EU migrant labour. Third, the uncertainties around Brexit have been primarily about the impact on businesses over the longer term rather than shorter term, including uncertainty about the timing of any transition arrangements and around the nature of Brexit.

Keywords: Business surveys, Brexit, companies, uncertainty

JEL Classification: D80, E66, G18, H32

Suggested Citation

Bloom, Nicholas and Bunn, Philip and Chen, Scarlet and Mizen, Paul and Smietanka, Pawel and Thwaites, Gregory and Young, Garry, Brexit and Uncertainty: Insights from the Decision Maker Panel (February 15, 2019). Bank of England Working Paper No. 780 (2019), Available at SSRN: https://ssrn.com/abstract=3335270 or http://dx.doi.org/10.2139/ssrn.3335270

Nicholas Bloom

Stanford University - Department of Economics ( email )

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HOME PAGE: http://economics.stanford.edu/faculty/bloom

National Bureau of Economic Research (NBER) ( email )

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Philip Bunn (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Scarlet Chen

Stanford University ( email )

Stanford, CA 94305
United States

Paul Mizen

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5479 (Phone)
+44 115 951 4159 (Fax)

Bank of England

Threadneedle Street
London, EC2R 8AH
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Pawel Smietanka

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Gregory Thwaites

London School of Economics & Political Science (LSE) - London School of Economics ( email )

Garry Young

National Institute of Economic and Social Research ( email )

2 Dean Trench Street
Smith Square
London, SW1P 3HE
United Kingdom

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