“A VOTE TO leave would represent an immediate and profound shock to our economy.” So claimed a document published one month before the Brexit referendum of June 2016, in which the Treasury set out the gloomiest of forecasts of what would happen if the result went the wrong way. Britain’s GDP would nosedive while unemployment jumped, it said—and many agreed. Happily, the impact of voting for Brexit was neither “immediate” nor “profound”: the economy held up better than expected. Yet almost three years on, as Brexit day nears, there are signs that Britain’s decision to quit the world’s largest trading bloc is beginning to take its toll.

Even the most committed Remainiacs struggle to portray the aftermath of the referendum as an economic disaster. Average GDP growth in the two years following the vote was only slightly below what it had been in the five years before. And although the pound’s swoon stoked inflation, while failing to generate the export boom that some had expected, Britain continued to attract a goodly share of foreign investment and unemployment kept falling.

But mounting evidence suggests that the economy has taken a turn for the worse. Official data published on February 11th showed that in the fourth quarter of 2018 GDP grew by 0.2%, rounding off the weakest year since the financial crisis. In December, the latest month for which there are hard data, GDP shrank by 0.4%.

More recent survey data tell a similar story. A composite of purchasing-managers’ indices, which measure economic activity, fell to a 30-month low in January. The index is consistent with GDP growth having stopped or possibly turned negative in the first quarter of 2019 (see chart). On February 7th the Bank of England revised the probability of the economy shrinking in 2019 from 13% to 22%.

Is Brexit to blame, as many Remainers argue? In just six weeks Britain is due to leave the European Union, with or without a deal. But other factors complicate the picture. The global economy has slowed, in part owing to trade tensions between China and America, which hurts trade-heavy economies such as Britain’s. Italy, another big trader, recently fell into recession. Germany, which enjoys the world’s largest trade surplus, may follow. That, rather than Brexit, is likely to explain why British export growth is weak. Consumer confidence in Britain is edging down, but it is doing so in most rich countries. Still, Brexit does appear to be spooking companies. A paper published in December by Nick Bloom of Stanford University and colleagues shows that the share of businesses reporting that Brexit was their biggest source of uncertainty roughly doubled in the autumn, to 19%. Only 13% say it is “not important”, down from over a quarter in September 2016. That is having an impact on investment, which accounts for over 15% of GDP in the short term. In the year to September gross fixed capital formation fell in Britain while rising in every other G 7 country except Japan. Business investment fell in every quarter of 2018. The Brexit effect seems particularly clear in industries that trade a lot or rely heavily on workers from the EU . Capital spending in the “engineering and vehicles” sector, also hit by diesel woes, is falling by 9% a year. It is dropping even faster in the hotel and restaurant industry. The boost to GDP growth as nervous firms stockpile raw materials, meanwhile, is likely to be tiny. Many raw materials are imported, subtracting from GDP ; and firms stocking up now are likely to buy less in the future.

Whether Britain gets out of this hole, or digs in deeper, depends on what happens after March 29th. Postponing the date of departure, which looks increasingly likely, would stave off the threat of no deal, but prolong the limbo that the country is now in. Most businesspeople hope for a deal including a transition period, during which existing rules would remain.

Mark Carney, the governor of the Bank of England, speaks of the potential for “upside”, “if there’s clarity on the deal” soon. In recent years British companies have built up enormous cash piles, which they could invest when uncertainty ends. Philip Hammond, the chancellor of the exchequer, has implied that a livelier economy—and the tax receipts that came with it—would allow him to loosen fiscal austerity. Yet even then, once the transition period is over Britain will probably be outside the EU’ s single market and perhaps its customs union, leaving it in a worse position than it is at the moment.