As bonds stay at record high prices and the FTSE 100 share index surges above the levels prior to the referendum, there are quiet signs of more activity around the economy. Local estate agents tell me buyers are back viewing and making offers for homes after a lull before the vote. Retail sales were growing at a fast 6% in May, and are probably still growing after the events of June 23rd. A local Independent Financial adviser told me that only four of his clients had phoned after the vote to ask about what was going on and two of those saw it as a buying opportunity. His portfolios were generally up in value on the pre vote levels.
Yesterday Governor Carney seemed to be still trying to talk things down with revisions to the Bank of England’s outlook with possible lower growth at some date in the future. Sometime making comments allegedly designed to stabilise can have the opposite effect as it gives media and journalists another chance to run out the old Project Fear estimates and forecasts. Some large companies are still being pessimistic, but many more are now coming round to the idea that there can be a profitable and successful life after Brexit. Indeed, there are many new opportunities. Various countries are indicating they want a trade deal with a newly independent UK. What a refreshing contrast from punishment Europe, sending out harsh words of how the UK has to be taught a lesson so no other country wants to leave.
It is odd they want to make the EU into a prison where you can check in but cannot check out. Surely if membership is as good as they said before the vote no other country will want to leave. Or are they now accepting that it has the drawbacks others identified, and it is an inconvenient truth they do not want out?
It’s also an odd idea that free trade is an advantage to just one of the two sides, which can only be granted if you accept lots of other things you do not like. I suspect we will discover that continental service businesses want passports to the UK for their products, that German car companies want tariff free access to our market, and French farmers want to be able to sell without difficulty to us as well. They will realise free trade is a two way process which requires both sides to agree.
Isn’t it time the UK authorities and leading companies either said nothing, or found something positive to say? Why try and talk confidence down, when in the market many people are still willing to buy and sell, and when most of the UK the financial markets are now performing well.
They need to understand that the move down in sterling is a monetary stimulus. it means the UK is cheaper for foreign investors, tourists and buyers of our goods. No wonder many UK shares are surging. I don’t remember that bit in the gloom laden official forecasts.