It’s been exactly two months since Britain voted to leave the European Union—so-called “Brexit”—and according to the soothsayers, we’re supposed to be approaching the Third Tribulation of the Secular Apocalypse.
Remember the predictions of fallout? Stock markets were going to plunge. Employment was going to plummet. The pound would be debauched to wampum-level values. There would be a boat exodus across the English Channel as frantic City traders fled to Paris.
And yea, the beast of Brexit would rise out of the sea, and upon its head would be the names of blasphemy.
All of this has turned out to be flatly false, according to the Telegraph:
A raft of strong economic data published since the vote has persuaded some analysts that a devastating economic crunch – predicted by then-chancellor George Osborne – is unlikely to strike the UK in the short term.
City economists now believe the UK will grow by an average of 1.6pc this year and 0.7pc in 2017, according to the Treasury’s latest study of forecasts.
If this holds up, overall growth may be revised upwards again. The Telegraph ticks through more good news news: unemployment fell to its lowest rate since 2005, consumer spending is up almost 6 percent compared to the same time last year, the deficit is wider though only slightly. That last one is particularly germane: British chancellor and oracle of the Brexpocalypse George Osborne had prophesied that any “out” vote would force the government to sharply hike taxes and slash spending. This so-called “punishment budget” was delayed by Osborne back in June and it now appears it won’t be necessary at all.
At The Guardian, Larry Elliott draws conclusions:
As far as it is possible to tell, there was a collective sharp intake of breath in the aftermath of the vote, but then consumers carried on regardless. The latest monthly health-check of household sentiment found a sharp drop in optimism in July followed by a rapid recovery in August. John Lewis and Next – two bellwethers of activity in the high street – say trading has not been affected by Brexit.
It’s not all manna from heaven, of course. Inflation has ticked up to a 20-month high, courtesy of the pound, which remains weaker in the wake of Brexit than it was beforehand. Britain also has yet to activate Article 50 of the Lisbon Treaty, which will officially begin its departure negotiations and turn the two-year hourglass upside-down—expect another market dive and further enfeebling of the pound when that finally does happen.
But that shouldn’t detract from the fact that the immediate damage predicted by the Brexit doomsayers hasn’t panned out. Economies, unlike EU technocrats, are not frozen in amber and immune to innovation. If the stock market plunges, investors will find new opportunities that shore it back up; if currency takes a tumble, there are advantages to be had with cheaper exports. The British economy is the second-largest in Europe and the fifth-largest in the world. The notion that Brexit pain would be a one-way track, that only Britain would suffer while the EU glided smirkingly forward, was always utter toff, as our transatlantic friends would say. Germany’s export-heavy economy needs British consumers. The pound today remains stronger than the euro. This is London we’re talking about, not Athens.
Sometimes nations need to implement big reforms. We can’t tremble so gelatinously before the tempestuous gods of the stock market that we never fix anything, least of all a crumbling and antiquated European Union that’s brought its residents economic misery. Edmund Burke said, “A state without the means of some change is without the means of its conservation.” Earlier this summer, the British decided that change was worth the risk of some (thus far very) short-term economic pain. Cheers!