Economic impact of ‘Brexit’ vote may be felt in Utah

Posted at 9:39 PM, Jul 02, 2016
and last updated 2016-07-02 23:39:15-04

SALT LAKE CITY – There is a lot of uncertainty regarding the financial implications of the UK voting to exit the EU, and the Obama administration said they’re keeping a close eye on the situation.

With the Brexit vote fresh on everyone's minds, Zions Bank released their monthly Utah Consumer Attitude Index at Salt Lake City’s "London Market."

Aaron Andersen of the Cicero Group advises Zions Bank, and he began by comparing the U.S. economy with other nations’ Gross Domestic Product.

“From the first quarter of 2008 to the same period of time this year, US GDP has expanded 10.9 percent,” Andersen said. “Compare that to only just over 6/10ths of a percent growth in Europe, only 6/100ths of a percent growth in Japan."

Brexit pounded the British pound, and that makes for a stronger American dollar. A stronger dollar makes American products more expensive, and less attractive to overseas buyers.

That will hurt Utah companies that manufacture and export goods.

“By slowing exports, we know that employment can be hurt here in the United States, and an extended profits recession, with our companies that are exporting overseas, is obviously going to have an impact that will reach us,” Andersen said.

A strong dollar should bring down prices of imported items like those sold at the London Market, but Andersen said that won't make up for the negative impacts on the economy.

London Market works through suppliers in the US, who do the importing and then sell to places like the Utah store. That means the impacts of Brexit will take a while to be felt at London Market.

For now, London Market is counting on its core customers to keep sales brisk.

"We have a lot of customers that come in that come specifically for the things that they've been craving since they left England, and they'll find them here as far as biscuits, and teas, and all of our candies, the good stuff, the good English chocolate,” Manager Brandy Withers said.