Talking Down Britain

Data today showed that UK GDP was down by a third, quarter on quarter, which if some commentators are to be believed, is a cause for Joyous celebration. Such has been the cataclysmic talk that the very realisation that the sky has indeed not fallen is prima facie evidence that Brexiters were right all along . Much comment today has been along the lines of 'bitter remainers relentlessly talking Britain down' should now 'pipe down' and get behind the government....and support the building of a new Royal Yacht to go out and get all those lovely new trade deals.

While we take the position that the likely economic impact of BREXIT is extremely negative, we are nevertheless going to indulge in a bit of bothsideserism. In the same way that snow in winter does not mean climate change is not real or vice versa one particular hot summers day, no single piece of economic data proves the arguments in favour of Remainers or Brexiters. The fact is that the UK economy is resilient but at the same time the huge fall in sterling cannot be ignored. What also cannot be ignored is that faced with market panic on the day the result of the vote was announced the BoE did what all sensible central banks do and promised to do whatever it takes to support the UK economy. Backing this up they then reduced interest rates by 50% and launched a huge new round of QE. These measure are enormously stimulative, being the precise tactics employed after the great recession. As an aside this does make you feel quite sorry for Mark Carney who having saved the UK economy to a large extent is now being attacked for doing so. This is a bit like a fire fighter saving someone from a burning house and being attacked for singing their clothes.

So the UK economy is not doing as badly as many Remainers thought it would but it is not doing particularly great either. And when considering todays economic numbers there is one very important thing to consider.......BREXIT HAS NOT HAPPENED YET.