It was with a gnawing sense of despair that I haven’t felt since referendum results day that I watched my boss tip back his office chair, newspaper in hand and pronounce with great glee that, as he had so wisely predicted, things are back to normal for Britain.
All those Remain doomsayers who predicted a slippery demise for Britain have been proved wrong. UK employment is on course for another record, the economy expanded at a reasonable rate, house prices have picked up again and consumer confidence is healthy, which means that when all is said and done this shows we are better off now than we were before the vote to leave the European Union.Right?
Well, not quite.
The biggest mistake pro-EU campaigners made following the vote was to make a lot of noise out of the resulting market instability. F*ck the financial markets. They are so ill-correlated to the real world that they border on irrelevant as an economic indicator. What we should have been doing is focus on the long-term indicators, and they ain’t looking so pretty.
Take last week’s G20 summit. Theresa May went to Japan to fly the “Britain’s open for business banner” and returned with a briefcase-full of profit warnings as World leaders demonstrated that unless access to the single market is maintained Britain may very well have to shut up shop. Japan’s government warned that Brexit could result in the country’s firms moving their European head offices out of Britain and Barack Obama confirmed that Britain has indeed dropped to the bottom of the pecking order when it comes to new deals. Only two of the five biggest economies in the World then, the others being the European Union and the UK (for now).
So it comes as no surprise that this week the IMF, HM Treasury panel of professional forecasters and the Bank of England have revised their forecast for economic growth downwards for Britain, warning that the economy is set to be £43.8 billion smaller than the they had originally forecast by the time 2019 rolls around. In its first update since the vote to leave the European Union, growth forecasts have been cut from 2.2 per cent to 1.8 per cent this year, from 2.3 per cent to 1 per cent in 2017, and from 2.4 per cent to 1.8 per cent in 2018. As one expert noted, “while the BCC’s original forecasts are unlikely to have been 100 per cent accurate — forecasting is a tricky business — the scale of the revisions shows just how seriously businesses view the impact of Brexit”.
It is worth bearing in mind that any positive economic indicators knocking about at the moment are there primarily because nothing has changed. The crucial elements that the pro-EU camp campaigned on – access to the single market, the free movement of labour et al – have yet to be implemented, and thus the cost of such changes can’t possibly be calculated. All this as the promises made by the Brexiteers are being amended every day.
As satirical news site NewsThump wrote today, “Brexiters who say ‘you lost, get over it’ are still waiting to discover what they’ve won”. They’re also waiting to see what they have lost, and they won’t be so smug then.