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An economic reality check on Brexit June 20, 2017

Posted by WorldbyStorm in Uncategorized.
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The speeches by Philip Hammond and Mark Carney today should have been troubling to even the most dyed-in-the-wool Brexiteer in the UK. For both notably mentioned no upside whatsoever to that process. Anything but. Hammond seemed to be seeking an extension of the status quo ante in relation to the customs union (as one comment put it, that’s all very well, but what’s in it for the EU?). And this struck me as particularly telling for implicitly it seems to point to the fact that any post-Brexit context will be worse for the UK and that this is actually reasonable of the EU.

But we acknowledge that, as Britain leaves the EU, there are genuine and reasonable concerns among our EU colleagues about oversight of financial markets that will then be outside EU jurisdiction, but which provide a vast proportion of economically vital financial services to EU firms and citizens.

And Carney spoke in unvarnished tones about how…

Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change.

Not a lot of optimism there.

Indeed he was gently scathing of the Tory Brexiteers…

Markets have already anticipated some of the adjustment. Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans. Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.

I mentioned Stephen Kinsella’s thoughts today on how Brexit is going to cause job losses on this island. Interesting that now some in the UK administration are waking up to the implications for the other island.

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Comments»

1. simonjkyte - June 20, 2017

What is actually happening is that the Tories are being told to backtrack by business groups. I almost forgot that the left propped big business up.

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WorldbyStorm - June 20, 2017

Of course they do Simon, of course they do.

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2. simonjkyte - June 20, 2017

they do though. and time that ceased.

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WorldbyStorm - June 20, 2017

If you say so.

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