Here’s one of the least suprising stories of the summer. Notwithstanding the chorus of experts and powers crying that disaster would be the consequence if Brexit passed, it passed and there has been no disaster. From Larry Elliott at the guardian.com:
Project Fear predicted economic meltdown if Britain voted leave, so where are the devastated high streets, job losses and crashing markets?
Unemployment would rocket. Tumbleweed would billow through deserted high streets. Share prices would crash. The government would struggle to find buyers for UK bonds. Financial markets would be in meltdown. Britain would be plunged instantly into another deep recession.
Remember all that? It was hard to avoid the doom and gloom, not just in the weeks leading up to the referendum, but in those immediately after it. Many of those who voted remain comforted themselves with the certain knowledge that those who had voted for Brexit would suffer a bad case of buyer’s remorse.
It hasn’t worked out that way. The 1.4% jump in retail sales in July showed that consumers have not stopped spending, and seem to be more influenced by the weather than they are by fear of the consequences of what happened on 23 June. Retailers are licking their lips in anticipation of an Olympics feelgood factor.
The financial markets are serene. Share prices are close to a record high, and fears that companies would find it difficult and expensive to borrow have proved wide of the mark. Far from dumping UK government gilts, pension funds and insurance companies have been keen to hold on to them.
City economists had predicted an immediate rise in the claimant count measure of unemployment in July. That hasn’t happened either. This week’s figures show that instead of a 9,000 rise, there was an 8,600 drop.
Some caveats are in order. It is still early days. Hard data is scant. Survey evidence is still consistent with a slowdown in the economy in the second half of 2016. Brexit may be a slow burn, with the impact only becoming apparent in the months and years to come.
But it is obvious that the sky has not fallen in as a result of the referendum, and those who said it would look a bit silly. By now, Britain was supposed to be reeling from the emergency budget George Osborne said would be necessary to fill a £30bn black hole in the public finances caused by a plunging economy. The emergency budget is history, as is Osborne.
In a way, Project Fear did work. It put the wind up businesses, making them warier about investing in new kit. And at least some of the people who voted remain did so because they were worried about the economic consequences of leaving. That was hardly surprising, given the regular and lurid warnings – from the Treasury, the Bank of England, the International Monetary Fund and the Organisation for Economic Cooperation and Development – about the dire consequences that would inevitably flow from Brexit.
To continue reading: Brexit Armageddon was a terrifying vision – but it simply hasn’t happened
