On Mon, 15 Jan 2018 21:39:52 +0000, James Harris <james.harris.1
Post by James Harris Post by pamela Post by James Harris
Post by pamela Post by James Harris Post by pamela Post by James Harris Post by Yellow
I read yesterday that the reason Project Fear has not come
to pass was because consumers and businesses just do not
realise how dreadful Brexit is going to be so have kept on
spending and expanding regardless.
I think it said it was quoting The Economist.
So I took that to mean they expected the economy to fail
because everyone would listen to the news that that the
economy was going to fail and that would bring the
That sounds like a story I read that economists were
claiming they got the predictions wrong because the British
public didn't react properly.
Sounds like a fake news story to me.
Was that reaction to the economists (as you suggest) or
reaction to factors which the economists were studying?
Sorry, I didn't keep a link. I just saw that one in passing.
Like I said, it sounds like fake news.
Well, as above, Yellow saw it too. I haven't found the original
story but I have found a reference to it
Referring to the Economist "Intelligence Unit". Yes, indeed....
Like all successful fake news, the actual source can't actually be
Not necessarily, but I am not going to spend the time needed to track it
down just to please you. Check the EIU website for recent reports if you
want to search.
Why the British economy has done better than expected since the Brexit
House prices are steady, unemployment has dropped, recession has been
avoided. This was not meant to happen
CHAOS was predicted. Following Britain's vote to leave the European
Union (EU) in June 2016, most economists believed that a recession was
imminent. A government study published in the run-up to the referendum
forecast that house prices would fall quickly, by up to a fifth, and
that unemployment would rise by over 800,000. But there has been no
recession. It is true that Britain has slipped down the international
league tables of GDP growth since the Brexit vote, but growth in both
2016 and 2017 still averaged around 2%, roughly similar to 2015.
Furthermore, house prices are steady and unemployment has dropped to a
42-year low of 4.3%. Disaster has been avoided. What went right?
The concept underlying the blood-curdling predictions before the
referendum was "uncertainty". No one has the foggiest idea about what
Britain's post-Brexit trading relationship with the EU will look like.
Economists worried that heightened uncertainty would prompt households
to rein in their spending and businesses to put investment plans on
hold. With the benefit of hindsight this looks naive. Leave voters got
what they wanted, so why should they cut back on spending? And for
Remainers, Brexit remains some way off: the country's status within the
customs union in 2020 is a distant worry for the average Briton.
Meanwhile, Britain remains an attractive place for foreign investors, in
part because of its trusted legal system and low rate of corporation
The global economy has also helped. The Brexit vote coincided with the
beginning of the first worldwide economic upswing in years. Global trade
volumes have grown decently, despite Donald Trump's scary rhetoric.
Firms from Seattle to Shanghai have recovered some of their animal
spirits and are willing to invest once again. Britain, an economy highly
dependent on international trade, has been swept along with everyone
else. And the country's exporters have been given an extra boost by the
depreciation of sterling, which is almost 10% below its pre-vote level.
In the past year real-terms exports have risen by a tenth, though the
British trade deficit remains in line with its post-financial-crisis
The question is whether this unexpectedly good performance can continue.
As Britain's departure from the EU in March 2019 nears, businesses may
start to get more jittery, especially if they fear that a deal with the
EU will not be reached. If investment spending is cut, then consumers
will eventually start to feel the pinch. And Brexit itself, which is
likely to leave Britain with severely reduced access to its largest
export market, will have profoundly negative long-term economic
consequences. For now, however, the British economy continues to sail
blissfully into the unknown.