It’s The Economy, Stupid!

Bill Clinton knew a thing o two when he coined this phrase a quarter century ago to bolstwe his (successful) campaign to be US President.  Times may have changed bit the appropriateness of the phrase has not.

Today’s Sunday papers are full of the shrill cries of various Brexotees smelling blood at next week’s European election of the back of polls indicating that 62% of people would support a ‘No-Deal’ Brexit, just to put everyone out of this never-ending misery. Given the complete and apparently endless hash both those in charge and those opposing them have made of the three-years-and-counting process, this should not be surprising.

But, meanwhile, outside of the media and politics hothouse, the other 99% of people have been trying to run their lives and make ends meet. Instrumental in making ends meet are th nusinesses that provide jobs and—especially—manufacturers who make things to export so we can afford the fruit and fridges we import. The media mayhem has said little about them, but they are distinctly not happy. “The Manufacturer” magazine reports:

  • 71% of UK manufacturers say Brexit is damaging strategic-planning and business prospects
  • 64% say Brexit will cause chaos for the manufacturing sector
  • 55% say the government could do more to promote exports

While many job- and export creating companies are rooted in their communities and not even contemplating leaving, warning signs from some without such commitment are growing ominously. Bombardier in Belfast, Honda in Swindon, Nissan in Sunderland are all pulling out. British manufacturing made Dyson’s £12bn personal fortune but he’s moving to SIngapore to make it bigger. Meanwhile, CrossRail is £3.4bn over budget and major infrastructure like Hinkley Point, HS2 and Heathrow expansion are all on hold. Job growth is in Amazon warehouses or on a moped for Deliveroo.

But if that’s what firms deeply invested in machinery, bricks and mortar are doing, how much easier for financial Young Turks of Canary Wharf to move whee the lucre leads. Major foreign financial institutions like JP Morgan, Goldman Sachs and Morgan Stanley, Mitsubishi and Sumitomo have already spent over £1bn of what some consider wasted money preparing for a No Deal Brexit. But many such institution chose Britain as an English-speaking foothold in the EU. Dublin, Frankfurt and Paris are already booming as smaller institutions move to stay within the EU.

Most flexible of all are the currency markets. Like bookies, they are famously cold-blooded about profit above all else, Here the runes are not good. After the UK£ plunged from $1,50 to $1.30 after the 2016 referendum decision to leave, in the two weeks of May alone it dropped further form $1.31687 to $1.27045 and from EU1.17553 to EU1.13777. That’s a 4% hike in costs for foreign holidays and imports alike. At that rate, the £UK would become worthless before Christmas.

The 62% of people polled by the Sunday Times as wanting a No Deal Brexit asap must have heard some of the clamour from CEOs, professors, economists, right up to the Govenor of the Bank of England that it would damage Brtain’s GDP by as much as 10%.  And, far from countries queuing up to sign trade deals, as promised by Leave, Liam Fox has been able to sign off only six, none of them with major economies.

Media and party fixation with bills at Westminster is now veering into angels-on-pinheads territory.  Who is doing the day job of looking after the economy? Brexiteers keep stressing Britain has the world’s fifth-largest economy. It soon won’t have.

About davidsberry

Local ex-councillor, tour guide and database designer. Keen on wildlife, history, boats and music. Retired in 2017.
This entry was posted in Commerce, Politics and tagged . Bookmark the permalink.

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