Brexit one month on: The good, the bad and the ugly

One month on and the U.K.'s is still reeling from the shock referendum result on the country's place in the European Union. The political and economic landscape of the country has changed radically – and the divorce proceedings haven't even started yet.

Global financial markets went wild as it became clear that the majority of U.K. citizens had voted to leave the EU and make a leap into the political and economic unknown. But since then an eerie calm has descended as the fallout from the vote only slowly becomes apparent.

CNBC takes a look at what has – and hasn't – changed in the last month:

UK economy

Protestors march from Park Lane to Parliament during the anti-Brexit rally in London, England on July 2, 2016.
Isabel Infantes | Anadolu Agency | Getty Images

As soon as the Brexit victory became clear, financial markets around the world fell - no more so than in the U.K., with the pound falling to a 31-year low. But global financial market have surprised many people by recovering faster than expected in the immediate weeks following the Brexit vote. Nonetheless, confidence in the U.K. economy is starting to look shaky.

A preliminary purchasing manager's index (PMI) of U.K. manufacturing and services published on Friday showed that activity across the sectors contracted in July at the steepest pace since early 2009. Chris Williamson, chief economist at Markit which compiled the data, told CNBC that the figures showed a "dramatic deterioration" in the UK economy after Brexit.

"What we're seeing here is the largest points fall in our composite index across manufacturing and services that we've ever seen so this goes back nearly 20 years," he said. "The big question is where we go from here…There are firms saying that they've had contracts lost, cancelled, new orders not coming in anymore, which is predominantly linked to Brexit uncertainty."

One bright spot, Williamson noted, was that the weaker pound had boosted exports orders for manufacturing and signs that confidence had picked up on the stabilizing political scene in the U.K. Given the drop in sterling, U.K. firms are seen as ripe for takeovers. Earlier this week, Japanese firm Softbank agreed to buy semiconductor firm ARM Holdings in a deal worth more than $32 billion. (103794754)

Britain has wasted no time in trying to court free trade deals with the likes of India and China and new Chancellor Philip Hammond has headed to China on Friday to reaffirm that Britain is "open for business". Speaking of the visit, China-Britain Business Council chairman, Lord Sassoon, told CNBC that the U.K. was still as attractive now as it was a month ago

"We've got plenty to work on here. (There's) $80 billion worth of bilateral trade (at stake), the U.K. is the second largest trade partner for china in Europe and it's the preferred destination for investment in Europe," he told CNBC's "Street Signs" on Friday.

UK politics

U.K. Prime Minister David Cameron was the first major casualty of the Brexit vote, resigning on the morning of June 24 once result came clear. Cameron had campaigned for Britain to stay in a reformed EU but failed to persuade the British public of the benefits of remaining members of the 28-country group. His departure meant someone else from the ruling Conservative party had to lead the exit negotiations with Brussels.

What followed can best be described by many Britons as chaos. Brexiteer Boris Johnson, former London mayor, fell on his sword after his political ally Michael Gove failed to endorse him for the Conservative leadership and decided to run for the leadership himself. Former home secretary Theresa May eventually won the contest to become Conservative leader and prime minister, months before an expected leadership election in September.

May wasted no time in asserting her leadership, appointing a mix of pro-Brexit and "Remain" politicians to key leadership positions, including Johnson as foreign secretary. Gove, by now generally unpopular for his political betrayal of Johnson, was sacked.

May – seen by many as a reluctant "Remainer" up to the referendum - said that she would delay triggering formal EU exit proceedings (known as Article 50) until she had cemented Britain's negotiating position, meaning that Brexit proceedings could start as late as early 2017.

Cameron was not alone in quitting. Prominent pro-Brexit campaigners also resigned in the wake of the vote. Nigel Farage, the leader of the U.K. Independence Party whose rise in popularity was a driving factor behind the referendum, stepped down saying he'd "done his bit."

The opposition Labor party was also in a massive state of flux. Leader Jeremy Corbyn, who was criticized for running a lackluster remain campaign, came under fire with widespread resignations and confidence votes. Corbyn had to replace most of his shadow cabinet and is currently facing a leadership contest.

Global growth

Global and UK growth prospects are certainly not what they were a month ago. This week, the International Monetary Fund (IMF) said it had been prepared, ahead of the referendum, to upgrade global growth but that Brexit result had "thrown a spanner in the works."

In its World Economic Outlook published on Tuesday, the IMF forecast global growth at 3.1 percent in 2016 — 0.1 percentage points down on its April forecast and 0.3 percentage points lower than its January estimate. It also cut its forecast for 2017 growth to 3.4 percent, having predicted an expansion of 3.5 percent back in April. (103798547)

The IMF also cut its forecast for U.K. growth this year to 1.7 percent, down from the 1.9 percent predicted in April. In 2017, the economy is now seen expanding 1.3 percent, rather than 2.2 percent as previously forecast- it should be noted that the IMF had predicted a recession for the U.K. in 2017 if it voted to leave the EU.

Just days after the vote, credit ratings agencies Standard & Poor's and Fitch downgraded the United Kingdom's credit rating. S&P downgraded the nation by two notches, from "AAA" to "AA" and Fitch, meanwhile, changed its rating from "AA+" to "AA."

UK-EU relations

Since the Brexit vote, relations between the U.K. and EU have been in limbo and varying from leader to leader, some frostier than others at the decision to leave the EU family.

U.K. Prime Minister Theresa May went to Berlin on Wednesday for a working dinner with German Chancellor Angela Merkel, marking her first trip overseas. She then met with French President Francois Hollande. Both leaders stressed to the U.K.'s new leader that while they understood the U.K.'s need to figure out its negotiating position, it should get on with the exit procedure as soon as possible.

There has been much speculation over the form any new relationship between the EU and UK could take. In an ideal world, Britain would like free trade with Europe without the free movement of people. Immigration was a deciding factor behind many people's decision to leave the EU.

For their part, however, EU leaders have reinforced that the U.K. cannot "cherry-pick" which elements of the EU it wants to keep: The free movement of goods, service, labor and capital was one of the founding principles of EU membership

Despite the attraction of U.K. businesses given the pound's drop, firms based in the U.K. with close ties to Europe have also threatened to move back to the continent should a final Brexit deal with the EU involve.

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