Just found this post , seems to sum it up for me .
For those of us who always knew that Project Fear was a shameful deceit, the speed and scale of the economic establishment’s u-turn after Britain's astonishing, wonderful vote for independence came as little surprise.
Overnight, the great and the good suddenly remembered what they are paid to do and rushed to calm the financial markets. Rather than stoking fear and loathing, they moved to reassure: Mark Carney, the Governor of the Bank of England, who committed a major, unforgivable error of judgement when he backed George Osborne’s campaign of disinformation, delivered a good, early morning speech to reassure a traumatised City.
He made it clear that the Bank stood ready to provide extra liquidity; had he chosen neutrality rather than partisanship, this would have been the kind of intervention he would have made during the campaign, explaining that he stood ready to facilitate whatever decision the British people chose to endorse. He has plenty more tools in his armoury if the volatility returns, or the economy slows too much.
It isn’t just the Governor who has belatedly become much more constructive. Many of the other bodies that had previously warned of a catastrophe were we to Leave are now rightly focusing on trying to make the new reality work.
The IMF, in its most sensible statement since the referendum battle began, urged the UK and EU to negotiate a smooth transition. The G7 said that the UK economy and financial sector remain resilient, and that they are confident that Britain is “well-positioned” to address the consequences of the referendum outcome.” That, of course, is the role of such organisations at a time like this: to pour oil over troubled waters.
Lagarde
Christine Lagarde, managing director of the IMF, has called for a smooth transition
The problem is that one cannot simply undo Project Fear. The endless threats and warnings of economic Armageddon have made a permanent impact on the psyche of many, and will doubtlessly become partly self-fulfilling in the months to come.
It’s not just remainers who are worried: some Leavers are equally nervous. Some big firms will believe their own propaganda. The business community made a grievous error when it put its name to Osborne’s scare campaign, grossly exaggerating any economic downside from leaving; it and the rest of us will now all pay a price as a consequence.
But the good news is that Carney’s intervention and the knowledge that other central banks stand ready to help quickly calmed things down in London, if not in continental bourses. The FTSE 100 actually closed up 2pc for the week, after fluctuating madly. The FTSE 250, a purer barometer of UK Plc, has been hit more heavily but is only down to where it was in February.
The pound has slumped, of course, a development that will have benefits to exporters as well as costs to those purchasing imported goods or going on holiday. There will be other short-term economic impacts. House prices may slow for a while, and office capital values may dip until investors begin to understand better the details of whatever new trading arrangements we end up striking with the EU. Some projects may be delayed. But it will quickly become apparent that the next British government will be the most pro-globalisation in recent history.
It will quickly become apparent that the next British government will be the most pro-globalisation in recent history
In many cases, nothing at all will change when it comes to the ability to trade goods, services or capital. As businesses, financial institutions and economists begin to engage with Brexit properly, they will start to see how it can be made to work with minimum disruption, and thus begin to relax. When that happens, funds will begin to be unblocked, and activity will bounce back.
Business is pragmatic above all else, and will soon lose patience with the ideological doom-mongers, those obsessed with highlighting problems rather than finding solutions. Companies that worry about the possibility of facing extra costs must begin a dialogue with the Treasury and the Department for Business; a cut to corporation tax could easily cancel out some extra non-tariff barriers, for example.
One way forward would be for the UK to join the European Economic Area in a Norwegian-style deal as a transitional solution, before negotiating our own, a la carte relationship. One goal should be to ensure that British-based banks are still able to use the financial services passport to allow them to trade freely with the continent.
For those of us who always knew that Project Fear was a shameful deceit, the speed and scale of the economic establishment’s u-turn after Britain's astonishing, wonderful vote for independence came as little surprise.
Overnight, the great and the good suddenly remembered what they are paid to do and rushed to calm the financial markets. Rather than stoking fear and loathing, they moved to reassure: Mark Carney, the Governor of the Bank of England, who committed a major, unforgivable error of judgement when he backed George Osborne’s campaign of disinformation, delivered a good, early morning speech to reassure a traumatised City.
He made it clear that the Bank stood ready to provide extra liquidity; had he chosen neutrality rather than partisanship, this would have been the kind of intervention he would have made during the campaign, explaining that he stood ready to facilitate whatever decision the British people chose to endorse. He has plenty more tools in his armoury if the volatility returns, or the economy slows too much.
It isn’t just the Governor who has belatedly become much more constructive. Many of the other bodies that had previously warned of a catastrophe were we to Leave are now rightly focusing on trying to make the new reality work.
The IMF, in its most sensible statement since the referendum battle began, urged the UK and EU to negotiate a smooth transition. The G7 said that the UK economy and financial sector remain resilient, and that they are confident that Britain is “well-positioned” to address the consequences of the referendum outcome.” That, of course, is the role of such organisations at a time like this: to pour oil over troubled waters.
Lagarde
Christine Lagarde, managing director of the IMF, has called for a smooth transition
The problem is that one cannot simply undo Project Fear. The endless threats and warnings of economic Armageddon have made a permanent impact on the psyche of many, and will doubtlessly become partly self-fulfilling in the months to come.
It’s not just remainers who are worried: some Leavers are equally nervous. Some big firms will believe their own propaganda. The business community made a grievous error when it put its name to Osborne’s scare campaign, grossly exaggerating any economic downside from leaving; it and the rest of us will now all pay a price as a consequence.
But the good news is that Carney’s intervention and the knowledge that other central banks stand ready to help quickly calmed things down in London, if not in continental bourses. The FTSE 100 actually closed up 2pc for the week, after fluctuating madly. The FTSE 250, a purer barometer of UK Plc, has been hit more heavily but is only down to where it was in February.
The pound has slumped, of course, a development that will have benefits to exporters as well as costs to those purchasing imported goods or going on holiday. There will be other short-term economic impacts. House prices may slow for a while, and office capital values may dip until investors begin to understand better the details of whatever new trading arrangements we end up striking with the EU. Some projects may be delayed. But it will quickly become apparent that the next British government will be the most pro-globalisation in recent history.
It will quickly become apparent that the next British government will be the most pro-globalisation in recent history
In many cases, nothing at all will change when it comes to the ability to trade goods, services or capital. As businesses, financial institutions and economists begin to engage with Brexit properly, they will start to see how it can be made to work with minimum disruption, and thus begin to relax. When that happens, funds will begin to be unblocked, and activity will bounce back.
Business is pragmatic above all else, and will soon lose patience with the ideological doom-mongers, those obsessed with highlighting problems rather than finding solutions. Companies that worry about the possibility of facing extra costs must begin a dialogue with the Treasury and the Department for Business; a cut to corporation tax could easily cancel out some extra non-tariff barriers, for example.
One way forward would be for the UK to join the European Economic Area in a Norwegian-style deal as a transitional solution, before negotiating our own, a la carte relationship. One goal should be to ensure that British-based banks are still able to use the financial services passport to allow them to trade freely with the continent.
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