When it comes to the economic consequences of Brexit, there were always two things to consider. The first was and remains the very real long-term consequences involved in foregoing the freedom of movement, leaving the single market, and subjecting Britain to regulatory barriers in its trading relationship with the EU. The second was the financial sector’s propensity to shoot itself and everyone else in the foot apropos of very little.
Today Britain’s economy has not gone to the devil, but Britain has not left the European Union. Its people might have voted broadly in favour of the idea, but the government has not yet taken the first step towards leaving, the invocation of Article 50 which would anyway only initiate a two-year process of negotiation.
So ‘experts’ from the banks like Bank of England Governor Mark Carney, who effectively threatened mad panic in the immediate aftermath of a Brexit vote, deserve at least their share of censure and ridicule. But it is equally foolish, and in plenty of cases equally malicious, to pretend that a better-than-expected economy today – although one which still suffers from a staggering post-crisis fall in wages, quite in contrast with the vast majority of Europe – means Britain’s proposed departure from the EU will not hurt in the long run. More serious and impartial analysts than Mark Carney have suggested that the country may currently find itself in a sweet spot, more competitive thanks to the fall in the pound while still retaining full access to the single market.
