The UK’s Economic Interests Are Not the Same as Those of Self-Interested Business Leaders

It is now common for Remainers to say that it is unsurprising that there has been no adverse effect on the economy after the referendum because Brexit hasn’t happened yet. Only when we actually leave the European Union, they assert, will adverse effects appear.

To put it politely, this is somewhat disingenuous. During the referendum campaign, the Treasury, the Bank of England, the Chancellor, the IMF and Uncle Tom Cobleigh and all suggested that there would be an immediate adverse effect from a Brexit vote. You may recall that asset prices were supposed to plunge, interest rates to rise and an emergency budget was going to clobber you where it hurts.

If you believed that the long-term consequences of Brexit would be severely negative then an adverse short-term impact might indeed be expected. After all, economic actors, especially those in financial markets, are supposed to look forward. In the event, as we now know, there was only a very transitory dip in confidence and asset values – and apparently no dip in spending.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.