As Britain comes closer to the formal declaration of its intent to leave under Article 50 of the EU Treaty, the Brexit crowd are becoming increasingly convinced that their cause is not only being proven to be worthy but is starting to reveal the elites which opposed Brexit \u2013 especially economists \u2013 as being charlatans.<\/p>\n
End-of-year surveys of the key sectors of the British economy revealed a better performance in the second half of 2016 than had been forecast by the Treasury and the Bank of England. Together, they pointed to the British economy entering 2017 with considerable momentum.<\/p>\n
The data are being used to justify the claim of Brexiters that warnings of post-Brexit economic calamity had been based on nothing more than a dishonest scare campaign.<\/p>\n
… The mood of triumphalism and \u201cwe showed you\u201d that has been boosted by the most recent economic data, might prove to be not only premature but dangerous.<\/span><\/h4>\nJust why the post-referendum performance of the British economy has been significantly better than the official predictions is an open question.<\/p>\n
The devaluation of the pound since the vote is obviously one factor, together with the fiscal and monetary loosening that the official policy makers implemented precisely to try to avoid their gloomy predictions being realised.<\/p>\n
In this sense, the policy makers have done well.<\/p>\n
As Bank of England Governor Mark Carney\u00a0told the parliamentary Treasury Select Committee<\/a> this week, as he asserted that the bank’s actions had reduced the dangers to Britain’s financial stability, the job of the policy setting authorities is to prepare for the worst.<\/p>\nWarning of dangers ahead and setting policy to prepare for the\u00a0aftershocks of the Brexit vote\u00a0was surely more important than for the Bank of England or the Treasury to be\u00a0able to boast that their gloomy forecasts had been spot on.<\/p>\n
To what extent \u201canimal spirits\u201d might have played a role \u2013 that is, that Britons have done what the Daily Express<\/em> had urged them to do and gone out of their way to show that the doomsayers had underestimated the \u201cBritish bulldog spirit\u201d \u2013 is impossible to say.<\/p>\nConsumer confidence has picked up, but from very low levels. British consumers may be a little less anxious about their prospects, but anxiety remains.<\/p>\n
While economists cop a battering from Brexit activists and the popular press that is their voice, they are not cowering under the desks and waving white flags.<\/p>\n
The start of the New Year sees analysts and forecasters working flat out to come up with meaningful explanations of what is happening and what is likely to happen when the reality of Brexit begins to take hold.<\/p>\n
One of the fundamental problems so far is that nothing has really happened since the June vote and the May Government has given very few clues about what will be the nuts and bolts of the Brexit operation.<\/p>\n
On even the most basic issues \u2013 what sort of trading relationship the UK will seek to have with the European Union \u2013 confusion reigns.<\/p>\n
Warning of dangers ahead and setting policy to prepare for the\u00a0aftershocks of the Brexit vote\u00a0was surely more important than for the Bank of England or the Treasury to be\u00a0able to boast that their gloomy forecasts had been spot on.<\/p>\n
To what extent \u201canimal spirits\u201d might have played a role \u2013 that is, that Britons have done what the Daily Express<\/em> had urged them to do and gone out of their way to show that the doomsayers had underestimated the \u201cBritish bulldog spirit\u201d \u2013 is impossible to say.<\/p>\n Consumer confidence has picked up, but from very low levels. British consumers may be a little less anxious about their prospects, but anxiety remains.<\/p>\n While economists cop a battering from Brexit activists and the popular press that is their voice, they are not cowering under the desks and waving white flags.<\/p>\n The start of the New Year sees analysts and forecasters working flat out to come up with meaningful explanations of what is happening and what is likely to happen when the reality of Brexit begins to take hold.<\/p>\n One of the fundamental problems so far is that nothing has really happened since the June vote and the May Government has given very few clues about what will be the nuts and bolts of the Brexit operation.<\/p>\n On even the most basic issues \u2013 what sort of trading relationship the UK will seek to have with the European Union \u2013 confusion reigns.<\/p>\n
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