FOR some time Britain’s vote in June 2016 to leave the European Union appeared to be having little economic impact. Sterling slumped but GDP growth in the second half of 2016 was faster than in the first. Unemployment fell, rather than jumping, as most economists had feared. Yet the notion that the economy would escape Brexit uncertainty was always fantastical.

Britain’s economy has gone from a leader to a laggard internationally, as GDP growth has slowed sharply (see chart). As The Economist went to press, the monetary-policy committee (MPC) of the Bank of England was expected to leave its benchmark interest rate on hold at 0.5%. The economy is deemed too weak to cope with higher borrowing costs.

A few factors explained the economy’s outperformance in the immediate aftermath of the referendum. The government eased fiscal austerity. In August 2016 the Bank of England cut interest rates to 0.25%. Happily, around the same time the world economy entered its first synchronised upswing since the global financial crisis. Britain is an open economy. Its exporters have benefited from strong foreign demand, especially from the European Union, by far the country’s largest trading partner.

The economic impact of the vote for Brexit is turning out to be less of a sting and more of an ache. Sterling’s referendum-induced decline has made imports pricier. Annual inflation exceeded wage growth for most of 2017. Although inflation has fallen from its recent peak of 3.1%, real wages are still barely growing. Today the average employee’s pay packet is roughly 3% smaller than might reasonably have been expected in June 2016, when real wages were moving up. Brexiteers who emphasised how much Britain allegedly pays to the EU will be interested to learn that, across the whole economy, that adds up to around £350m a week in lost earnings. Growth in household spending, which accounts for some 60% of GDP, has slowed.