Hollow nature of Brexiters’ triumph is emerging
2017 set to be stomach-churning as triggering of Article 50 looms
Whatever the Brexiters might claim, or even believe, the vote to leave the EU is most definitely not a matter for celebration. This will become clearer as we move through 2017. That said, there have already been plenty of harbingers of the type of year we are facing, for those who want to see them.
The pound plunged in the wake of the Brexit vote, as financial markets offered their crystal clear view of what the decision to leave the EU had done to the UK’s economic prospects.
Experts predict UK growth will be very weak in 2017.
The Office for Budget Responsibility is forecasting UK growth will slow to 1.4 per cent next year, from an already unimpressive 2.1 per cent in 2016.
Stephen Boyle, chief economist at Royal Bank of Scotland, forecasts growth of between one and one-and-a-half per cent in Scotland and the UK as a whole next year. He estimates 2016 growth in Scotland, which has been hit hard by oil and gas sector weakness, at around one per cent, compared with slightly more than two per cent in the UK as a whole.
The projected slowdown in growth in the UK as a whole, amid huge uncertainty over Brexit, is expected to bring with it a rise in unemployment.
While tensions between the Remain and Leave camps seem likely to escalate as the Brexit soap opera plays out, and the Scottish independence question remains understandably to the fore, people will face the same economic fall-out regardless of which side of whatever fence they are on.
As we contemplate 2017, we should keep in mind two things.
The first is that we are now more than six months on from the Brexit vote and Prime Minister Theresa May and her Government have yet to come up with any kind of plan about how we might mitigate the consequent damage from leaving the EU. Saying that things are going to be just dandy, because Blighty is truly mighty, is just not any kind of strategy at all, even if this approach seems at times to still be almost ubiquitous. And Mrs May’s talk of “red, white and blue” Brexit adds nothing.
The second thing worth remembering is that, in the run-up to and during October’s rambunctiously jingoistic Conservative Party conference, sterling was sent plunging by the mere mention of a timescale for triggering Article 50 to begin the formal EU exit process.
Consumers might still be spending at the moment but they are nervous. Pollster GfK’s measure of consumer confidence has ended a tumultuous 2016 at -7, having been at +4 in January.
Joe Staton, head of market dynamics at GfK, said: “Confidence in the general economic situation for the UK has collapsed in the face of uncertainty about the future both at home and abroad.”
While observing consumers’ “now is a good time to buy” mantra in terms of major purchases, Mr Staton added: “Looking ahead to 2017, against a backdrop of Brexit negotiations, the decline in the value of sterling, and the prospect of higher inflation impacting purchasing power, we forecast that confidence will be tested by the storm and stress of the year to come.”
One wonders just what is going to happen when Mrs May actually triggers Article 50, something she seems as determined as ever to do by the end of March.
Billionaire investor Warren Buffett, the Sage of Omaha, has a great phrase about only being able to see who is swimming naked when the tide goes out.
It will be interesting to see, when the tide goes out for the Conservative Government with the triggering of Article 50, whether it by then has any kind of Brexit plan to cover its embarrassment. However, this is about much more than the embarrassment of a Conservative Government that, under Prime Minister David Cameron, put the country in peril by calling a referendum on EU membership that never needed to be held.
Mrs May and her fellow Conservatives, it seems, love to talk about “ordinary” people, and how they are helping them out.
Many of these people have suffered considerably since the Conservative Government came to power in 2010, amid grim austerity and savage welfare cuts.
There was much talk about Chancellor Philip Hammond loosening the shackles of predecessor George Osborne’s austerity a little bit in last month’s Autumn Statement. However, the abject misery those without jobs and the working poor have had to endure looks set to continue and in many cases intensify in 2017.
And Brexit will make matters worse, for most people.
As the impact of the vote to leave the EU becomes clearer, even if the UK Government’s strategy does not, surely the triumphalism of the Brexiters will fade.
‘‘ It will be interesting to see, when the tide goes out for the Conservative Government, whether it has any kind of Brexit plan to cover its embarrassment