The tawdry nihilism of some in the “Leave” camp must be resistedby Paul Wallace / February 2, 2018 / Leave a comment
When a recently leaked government document revealed estimates of the harm to the economy under three plausible scenarios of Britain’s future outside the European Union, Brexit minister Steve Baker made an extraordinary response attacking civil-service forecasts as “always wrong.” Such politicisation and vilification of economic forecasting is one of the many pernicious effects of Brexit.
This tawdry nihilism should be resisted. The economists inside government who are asked to make the forecasts deserve support from ministers rather than abuse for their efforts. And since most forecasters inside or outside government are only too aware of the fallibility of their predictive powers they also deserve a fairer hearing.
It is of course easy to take aim at them when, as so often, their forecasts turn out to be wrong. Exhibit number one for Brexiters is the Treasury’s prediction of a recession following a vote to “Leave” in the referendum. Instead the economy kept on growing. Yet immediately after the vote the collapse in both consumer and business confidence was such that a recession did appear quite likely. Mark Rutte, the Dutch Prime Minister, captured the dark mood when he said that Britain had “collapsed—politically, monetarily, constitutionally and economically.” What saved the day was the restoration of political authority as Theresa May took over from David Cameron as PM without a lengthy and bruising contest to become the new leader of the Conservative Party. The Bank of England also acted promptly to bolster the economy by cutt…