As a bunch of new reports show, Brexit will be bad for the United Kingdom. They can hijack the spirit of Christopher Nolan’s new film all they like: Brexiteers won't change thatby George Magnus / July 24, 2017 / Leave a comment
It was inevitable. The release of Christopher’s Nolan’s new film Dunkirk has spurred the supporters of Brexit in parliament and the media to hijack the bravery and spirit of that time in support of their cause. They forget that Winston Churchill told the House of Commons in June 1940 that “Wars are not won by evacuations,” and that the whole episode represented a “colossal military disaster” (except, he was at pains to point out, for the RAF). They mischievously conflate the avoidance of national humiliation—and a lot worse—that might have been imposed by Nazi Germany with the national humiliation imposed by their own strategy to withdraw from the EU. Nevertheless, if one of the messages from Dunkirk is that people have the capacity to overcome a seemingly lost cause, perhaps something positive will yet emerge because the Brexit ground seems to be shifting a bit.
There is no question that the election result has been the catalyst for the change in sentiment, but the agents of change have been the same all along. The economy is, slowly but relentlessly, slowing down as consumers and businesses cancel or defer spending and borrowing decisions. And businesses, which have long warned about the deleterious consequences of Brexit in general, and a poorly managed Brexit in particular, now seem to have the ear of the government.
Three new reports beg the question: is Britain losing its resilience?
In the last week, for example, three reports have been published suggesting that the UK economy is in a precarious position with ebbing confidence as Brexit negotiations continue. The latest, published today, was the International Monetary Fund’s “World Economic Outlook,” in which the prediction for UK growth this year has been lowered from 2 to 1.7 per cent. The IMF predicts that the immediate impact of Brexit will be “mild negative,” but this is almost certainly drawn from a UK Treasury assessment, moderated slightly by the IMF economists in Washington DC. It’s how large sections of the WEO are written. Privately, the IMF is not as sanguine.
The main takeaway from the IHS Markit consultancy report, published last week, was the sharp fall in the net balance of UK firms expecting a rise in business activity over the next 12 months…