One of the most obnoxious features of the post Brexit climate is that the biggest liars and doom mongers in political history – the Remain campaigners – now accuse Leave Campaigners of lying! This has been picked up in continental attacks on Boris Johnson who, if anything, was rather kind and accommodating given the damage done to people, banks and businesses by the Euro corporatist elites. Now those liars are exposing their own lies:
THE IMF
Before the Brexit vote the IMF head, Christine Lagarde (whose appointment was avidly supported by George Osborne) said that the impact on the UK economy of a Brexit vote went from “pretty bad to very, very bad” and that there could be a recession.
Today the IMF says it has a “benign” view of the Brexit effect on the UK economy, there would be no recession and their revised forecast for UK growth is the same as their revised forecast for USA growth (-0.2% for 2016). Their forecast for UK growth in 2017 is 1.3%
GEORGE OSBORNE
Having said before the Brexit vote that leaving the EU would be disastrous for the UK and there would be a recession and an emergency budget, Chancellor Osborne finds unemployment has reached an 11 year low of 4.9% (less than half the EU average) and there was no need for an emergency budget. With the heads of six large investment banks based in London (many of whom had also been Brexit doom-mongers) Osborne noted that the UK has “one of the most stable legal systems in the world, a brilliant workforce and deep, liquid capital markets unmatched anywhere else in Europe, all of which are underpinned by world class regulators.” Osborne had to admit on behalf of the Government that:
“For first time in 40 years, the UK will be setting its own trade terms. So we should begin the conversation now with the US, and with the members of the North American Free Trade Agreement. The US is the largest single destination for UK exports, and the UK is America’s largest trading partner in Europe.”
There have been similar changes in the previously doom laden predictions of many companies who threatened to leave the UK – Vodaphone, JP Morgan and HSBC, while Barclays chairman John McFarlane also said the bank had no plans to move staff and their crisis plans had been cancelled – but they were sticking to their plan to sell a French bank!
THE BANK OF ENGLAND
Osborne has gone and it is urgent that his appointee, the Governor of the Bank of England Mark Carney is also replaced. Even before the great Brexit debate the Bank under his leadership had a poor record in the City. Forecasts were poor and “guidance” as to future interest rates have proved wrong or misleading.
But Dr Carney’s blatantly political (and probably illegal under referendum law) interventions in the Brexit debate contradicted the traditional role of the Bank of calming and supporting financial markets. Instead of assuring markets that the Bank would support the economy regardless of the result of the Brexit vote Carney had for many months been warning in hysterical terms that Brexit would cause severe problems for the British economy.
After the Brexit vote Carney, as if to perversely bring about the doom he had forecast, did even more to undermine confidence in the British economy. Despite the fall in the Pound, which in itself provides a financial stimulus, Carney signalled a totally unnecessary further cut in interest rates (from 0.5%) and offered more funding for bank lending. This cut has now been postponed and the Pound has rallied after Carney did NOT implement his policy!
His job requires him to maintain economic and currency stability – not to undermine them. Carney’s threat to reduce already minimal interest rates further flew in the face of his justified warnings that excessively low interest rates were a danger to banks’ PROFITABILITY AND STABILITY just when bank confidence was threatened and when Carney’s own warnings required support for business from those very banks.
The Bank of England seems all at sea. Governor Carney, having warned of disaster before Brexit shortly after the vote said that “Brexit risks are beginning to chrystalise”. Then the bank’s chief economist Andy Haldane supported a “sledgehammer” approach to stabilising the post-Brexit economy as he warned unemployment could rise. (unemployment has just fallen to 4.9% the lowest since 2005 and the lowest on either side of the Atlantic!)
But then the Bank’s own survey published on 20th July found that a majority of firms questioned were not planning to mothball investment or change hiring plans. On the same day the latest trading report from the retailer John Lewis said spending in its department stores and at its Waitrose supermarkets were 3.2% higher in the week ending 16 July than they had been in the same week of 2015. Under Governor Carney the Bank has lost all credibility on the economic front and meddled unconstitutionally on the political front.
Under Cameron both Carney’s Bank of England and Osborne’s Treasury were exploited for political ends and lost that assured civil service objectivity on which all sides of politics and business depend. Osborne has now gone – Carney must follow.
GOOD NEWS FOR THE UK – BAD NEWS FOR THE EU:
Here are some recent news items which show how the EU is in far greater crisis than the UK after Brexit. The UK will be importing without EU tariffs and without massive regulatory costs and without paying £10,000m p.a. in net budget contributions. Many businesses and business organisations are supporting and defending the UK:
Speaking to The Financial Times, Markus Kerber, Managing Director of the BDI – Germany’s leading business association – said that when it comes to Brexit negotiations, “We should not talk about punishing people… We should look after our own economic interests.” He added “What I’m against is a game where even if the UK wants a Swiss or Norwegian deal, the EU says: ‘Let’s hit them hard on the head’.”
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US bank Wells Fargo has agreed to buy (note NOT lease) a newly built office in the City on King William Street for £300m – a sign of long term confidence in London and the UK.
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Property law firm Collier Bristol reported “Dollar denominated investors from Singapore, Hong Kong, Middle East and elsewhere in Asia are keen to ock in favourable exchange rates and that has resulted in a strong push for (property deal) negotiations”.
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North London Estate Agent Leaf said: “No valuations or viewing appointments were cancelled and new appointments have been arranged”
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The world’s biggest hotel group predicted that the fall in the pound would lead to a tourist boom for the UK
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THE LSE – DEUTSCHE BOERSE MERGER:
“Whether the UK is just European or a member of the EU the merger will create a globally competitive, industry defining market infrastructure group at the service of European industry” – LSE
WHILE THE EU COLLAPSE CONTINUES:
- French bank Societe Generale analyst warned Italy and France could quit the single currency EU
- The Italian banks are in grave crisis and their bail out by the Italian Government could be blocked by the EU which forbids Government bailing out banks until the bond and shareholders (including small Italian savers) are hit!
- Rating agency Moody’s said the future of the entire EU was at risk
- Banks across Europe came under increasing stress
- The world’s biggest hotel group predicted that the fall in the pound would lead to a tourist boom for the UK
