“Membership of the single market must end as that requires us to accept free movement of labour”by Gerald Howarth / January 13, 2017 / Leave a comment
Last week the Chief Economist at the Bank of England, Andy Haldane, compared the Bank’s miscalculation on the impact of a vote to leave the European Union to be equivalent to Michael Fish’s infamous error about the Great Storm of 1987. Fish brushed aside concerns that a hurricane was about to hit southern England, whilst the Treasury warned that a hurricane would hit the British economy if we voted to leave. Both have had to eat humble pie.
As the Times reported last Friday, the UK has the world’s top economy. But before the referendum, “experts” predicted that the economy would experience an immediate downturn. In reality it has picked up, growing by 0.6 per cent in the third quarter of 2016 compared to 0.3 per cent in Q1, before the referendum.
The scale of the miscalculation is stark when one looks at the language used in the lead up to the referendum. On the 23rd May—exactly a month before the referendum—the then government released an announcement which predicted that a vote to leave “would cause an immediate and profound economic shock across the country,” whilst George Osborne stated that we had “one month to avoid a DIY recession.”
The reality has been quite different. Instead of falling into an immediate recession, the UK economy has grown since the referendum. Major companies have invested in the UK. In July, the Japanese telecoms group Softbank acquired Cambridge-based ARM in the largest ever acquisition of a European technology business, its chairman and chief executive explicitly stating that the deal highlighted his confidence in the British economy. In October, Nissan committed to building its next generation of cars at its Sunderland plant, and in December recorded a 22 per cent jump in pre-tax profits for its British subsidiary. In November, Google announced that it is to expand its London office, creating 3000 extra jobs. Last week, it was reported that year-on-year consumer spending increased by 2.6 per cent in December 2016. House prices have also increased since the Brexit vote, but I could go on…