Published on Mar 23, 2017
So, we now know the date when the starting gun gets fired for leaving the EU, but what kind of race is it? We also know it’s to be run over two years, with quite a few runners all jostling for position. However, we don’t know how it will end.
The truth is that although nobody can predict economic outcomes with any accuracy, even at the best of times, it does not prevent speculation on what the fall out will be.
At this point, it is interesting to note that on June 24th 2016, the markets were spooked as the day dawned and the UK realised that it had voted to leave the EU.
All the doomsayers at the time have not been proved right (as yet anyhow and things can change quickly and unpredictably, for example, consumer confidence and spending). In fact, things have unfolded quite differently to what was foretold, for the UK economy has proved resilient.
The FT recently gave its six reasons for this:
Added to this has been the extraordinary effect of the fall in the pound – the stock market surged upwards as companies saw exchange gains from their international trade and the UK became an attractive place in which to spend money.
An unexpected boost was given to certain industries. For example, drugs companies, one of Britain’s most successful export sectors had issued stark warnings about leaving the EU, but more recently, some have felt that a hard Brexit could improve their profit margins for two reasons:
If drug companies can remain a member of the European Medicines Agency, that would help too.
The next two years will be so full of predictions we won’t know who to believe, but they will probably all in time prove to be wrong.
Published on Mar 23, 2017 by Neil Thomas