Listening to the co-founder of Economists for Brexit and former aide to Boris Johnson, Gerard Lyons on Channel 4 News on Thursday night I expected to hear the standard Leave line of a glorious economic future ahead now that we had ‘unshackled’ from the EU. However he was open about the fact that confidence, the lifeblood of any economy, had been severely hit in the last six weeks.
The unashamed admission that there were negative economic consequences of Brexit reminded me of election night. While waiting as an observer for Stronger IN at my local count news filtered through that Sterling had taken a hit on the currency markets. This was met by cheers among Leave campaigners in the centre. In that moment as Leavers celebrated people losing their jobs the mask slipped and their economic arguments were proven to be falsehoods.
Warnings of economic downturn were dismissed as project fear, but as the Bank of England’s stimulus package showed the fear wasn’t just for show. Indeed this was not just any central bank stimulus package, this was one of the largest and most wide ranging in the ‘Old Lady of Threadneedle Street’s’ long history. Not only did it cut its base interest rate to a record low of 0.25%, the Bank also announced a £100bn scheme to force banks to pass on low interest rates to wider society and that it would be buying £60bn of UK Government Bonds alongside £10bn of corporate bonds. The British public may not have taken expert warnings seriously but policy makers clearly have.
Ironically the worst hit by the Bank’s rate cut are the old, a group as we all know disproportionately more likely to vote leave than their younger counterparts. Their savings will now earn even less income and be further eroded by higher inflation.
One thing that is clear from the Referendum is that all the figures quoted above are generally meaningless to a large proportion of the electorate. Rather they rely on a gut feeling as to whether or not they themselves are doing well. Thus it is only from now that these people will be able to fully appreciate the consequences of how the nation voted on 23 June. We can only hope they may have a change of heart before article 50 has been implemented