The Treasury and Bank should apologise for their gloomy and wrong short term Brexit forecasts

On Saturday  Mr Osborne was back with the Treaury pro EU gloomy playbook. Their disgraceful short term forecast of what would happen on a Brexit vote has already been proved hopelessly wrong in most counts.

They said exit would drive up the cost of borrowing. Instead the government cost of borrowing has plunged and private sector loans are available at the same rates as before.

They said asset prices would fall undermining investor confidence. Instead shares of our large companies on the FTSE 100 are higher and people are out buying homes  again at prices 5% up on a year ago.

They said the UK deficit would rise. Instead the Treasury can now slash its forecast for future state borrowing costs as the price of future state borrowing has fallen by a remarkable 36%.

They said there would be a rush to cancel investment projects. So far there has been no such rush.

 

They said consumers would cut back their spending. Why? Who is doing that?

The only thing they have been right about is sterling has gone down. This is a substantial monetary stimulus to our economy. It means foreign buyers of UK assets now find them cheaper and better value. It will boost export activity and make inward investment more attractive.

It means we will buy more home goods and fewer imports.

Governor Carney need not offer lower official interest rates. That is unhelpful, pointing to an extra monetary easing we probably will not need. We do not want negative talk from those in charge of our economy. The danger us such talk will lower sterling too much.

When we come to see the immediate post Brexit figures I expect to see continued growth, and no falling off a cliff in demand as forecast by the Treasury.

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136 Comments

  1. Mark B
    Posted July 3, 2016 at 5:20 am | Permalink

    Good morning.

    “It means we will buy more home goods and fewer imports.”

    Such as ? Our ‘own’ manufacturing has been decimated. It is mostly foreign owned were the profits are paid to overseas investors.

    The lower pound means that imported raw materials are now more expensive. Copper, silver, oil and now wood chips from the USA to burn at extravagant cost in our power stations, rather than locally sourced coal, will drive up energy costs.

    As the pound is lower this will drive down investment from overseas as the returns will be far less.

    A 5% increase in the cost of buying a home might sound good to some, but to those trying to either move up or get on the ladder, it is not good news. The housing market is in another bubble driven by overseas investors just like the one in Dubai. It will end the same way.

    No I do not think that they should apologies. LL and others never got their apology from, John Major and the Conservative Party over the ERM debacle, so shy should the bank, or Osborne ?

    In fact, they have done the Leave campaign a great services. After all, they can hardly go back to the country now and say the same things. Their goose has been cooked ! The Remainiacs have been discredited. All it needs now is for the Conservative Party to elect a PM who campaigned to Remain in the EU on the quite. Just in case, CMD lost. What are the chances of that do you think ?

  2. Dennis Craggs
    Posted July 3, 2016 at 5:20 am | Permalink

    It’s FAR FAR FAR to early to say, many of these comments are wildly optimistic and much of it is economically illiterate

    • Richard1
      Posted July 3, 2016 at 11:54 am | Permalink

      I agree it’s very early days but which bit is economically illiterate?

    • Duyfken
      Posted July 3, 2016 at 2:53 pm | Permalink

      With such accusations, you should really explain your reasons. You may also care to be a little less discourteous.

    • Hope
      Posted July 3, 2016 at 5:33 pm | Permalink

      Carney should be sacked for his political comments before the referendum. Lord King appears far more balanced in his views. The blame rests with Osborne. What is your party going to do with him? How are you going to get a leave politician as PM? May will be a disaster, we read there were threats made to the DT if it published its damning article about her! Like Osborne, her record is a horror story. Gove has damaged your party beyond repair. Whatever his motivation he has damaged our country and the wishes of the public.

    • Edward2
      Posted July 3, 2016 at 5:40 pm | Permalink

      Good to know we now have an expert on here commenting.

    • stred
      Posted July 4, 2016 at 8:31 am | Permalink

      ‘Dennis’ You are really George Osborne and I claim my £5.

  3. formula57
    Posted July 3, 2016 at 5:40 am | Permalink

    A further disgrace is Chancellor Osborne abandoning his 2020 budget surplus target and laying the blame on Brexit when there was substantial and reasonable doubt about his ability to meet it anyway.

    • Lifelogic
      Posted July 3, 2016 at 11:17 am | Permalink

      I always predicted he would use this excuse for his serial economic incompetence. He is very lucky to have it hopefully we will se no more of this misguided man.

    • hefner
      Posted July 3, 2016 at 12:13 pm | Permalink

      Oh come on, for years JR and most people herein have been putting the blame on the EU. Don’t be so touchy, you sound rather ridiculous.

  4. Lifelogic
    Posted July 3, 2016 at 6:00 am | Permalink

    Indeed it is generally a good idea to bet against any forecasts made by these two clowns.

    Osborne is so daft he thinks laws preventing the low paid from working, 15% turnover taxes on moving home, pension pot muggings, attacking nondoms, taxes above the Laffer rats, ratting on his IHT promises (while pretending to keep them) and taxing landlords and thus tenants (on non existent profits) are good ideas.

    The man is an economic illiterate. He even thinks he has fixed the roof when at best he has, at best perhaps found rickety a ladder. He still has a huge PSBR deficit and a huge Trade deficit, he has not been repaying the debt as has been claimed at all. He also has fairly appalling (and still deteriorating) public services, poor infrastructure, poor and declining productivity, virtually no wage growth and they still have not even given the go ahead on some new airport runways.

    Why is the man still there? Get an Allister Heath type in now. Lower simpler taxes, far smaller more efficient government, functional banks, far lower turnover taxes, scrap wage controls, a bonfire of red tape, a welcome to the rich and hard working, rather than attempts to endlessly mug them.

    • Lifelogic
      Posted July 3, 2016 at 11:23 am | Permalink

      The odds seems to be:-

      Mrs May 4:11 Mrs Leadsom 7:2 the rest are now total outsiders.

      Leadsom is by far the better choice. May is a has been, remainer, proven wrong, lacking courage, dishonest to the electorate and with zero charisma.

  5. Glenn Vaughan
    Posted July 3, 2016 at 6:05 am | Permalink

    Good morning John

    Why hasn’t a motion of “no confidence” been tabled concerning George Osborne? It may not win the day but his credibility would undoubtedly be damaged further and make his position untenable.

    A new chancellor would also mean that the current Governor of the Bank of England could have his contract terminated.

    • Lifelogic
      Posted July 3, 2016 at 1:15 pm | Permalink

      It would be a huge boost for economic confidence to have a sensible chancellor and governor of the BoE.

      Osborne has been an incompetent disaster increasing taxes (and tax complexity) hand over fist, while running a huge PSBR, endless waste and a huge trade deficit too

      Worse of all is his totally dishonest claim that he is keeping his IHT promise.

      The next chancellor should abolish IHT as his very first step. Just to show a sensible sense of direction, Showing that the UK welcomes the hard working, inward investment and the rich – and will not mug them a second time on death.

  6. Lifelogic
    Posted July 3, 2016 at 6:10 am | Permalink

    And for leader JR will be backing?

    Surely we must not have Theresa May nor the other cowardly remainer. So that leaves Gove, who has stabbed Boris and shot himself in the foot, Fox who is sound but not vert popular or Leadsom. So Andrea Leadsom it surely must be.

    I still think Boris would have be better but Gove very foolishly and pointlessly got him and cost me my small wager too.

    She will certainly be a better bet electorally than the cowardly, bossy, tedious and totally deluded (or blatant liar) we have control of our borders in the EU through Schengen, Theresa May.

    • Denis Cooper
      Posted July 3, 2016 at 11:12 am | Permalink

      When I look at the list of MPs supporting May I am further convinced that I don’t want her as Prime Minister. However I don’t have a vote on it.

    • Antisthenes
      Posted July 3, 2016 at 2:40 pm | Permalink

      After watching a recording of Marr’s usual left wing bias and aggressive interview of Andrea Leadsom and the excellent manner she responded to it and answered his questions. I am even more convinced she is the PM this country needs.

  7. Jerry
    Posted July 3, 2016 at 6:14 am | Permalink

    Yawn…. I think the HMT take more than a 7 day outlook! You have not been proved right, come back in 12 months time.

    • Edward2
      Posted July 3, 2016 at 11:18 am | Permalink

      I hope you will come back and apologise when it turns out you are proven wrong.

    • Lifelogic
      Posted July 3, 2016 at 11:24 am | Permalink

      Just right so far perhaps, and indeed consistently right in the past.

    • Leslie Singleton
      Posted July 3, 2016 at 5:44 pm | Permalink

      Dear Jerry–Of course nobody’s been proved right in the limited time so far passed but the limited time hasn’t stopped Osborne and the Treasury managing to be proved wrong. In any event we can no longer believe them because it is so obvious that a big chunk of what they say is simply their trying to justify their earlier bilge with unevidenced doom and gloom and by making that scenario happen. Even if the doomsaying were justified – it isn’t – it is no business of the Chancellor spouting it and, worse, prematurely taking action on it.

  8. alan jutson
    Posted July 3, 2016 at 6:16 am | Permalink

    All they are doing to to try and engineer some so called “Figures” to fit their past promises, whilst ignoring the actual facts.

    Figures (Interest rates, FTSE, Bonds, etc ) go up and down and change all the time, rather like the weather/so why not call it financial change.

    Seems if you are on the Remain side you still want to try and win the argument over Project Fear projections just to try and prove the Leavers are wrong, even though they lost the argument and the vote when it mattered.

    Time for a real clear out of these UK Knockers from Ministerial positions for the new Prime Minister, and above all that is why it should be a Leave candidate.

  9. Jumeirah
    Posted July 3, 2016 at 6:40 am | Permalink

    Mr Redwood: why is it taking so long to appoint a PM to replace Cameron. Why doesn’t the Party just get on and VOTE? Cameron no longer leads from the front since his resignation and we urgently need LEADERSHIP NOW so that the Country is confident that at least somebody is there up-front.
    MPs must surely know who they want so for goodness sake get on with it!
    VOTE and get on with it!

  10. Anonymous
    Posted July 3, 2016 at 6:41 am | Permalink

    In voting to leave the EU do you now think the British people have made the right decision, Dr Redwood ?

    • Lifelogic
      Posted July 3, 2016 at 1:28 pm | Permalink

      Of course they have! Especially as we should now get a sensible PM and chancellor and turn the Tories away from the Libdim drivel they had become. Cheap energy too if they get their act together.

      Hopefully it will not be T May as she would be even worse than Cameron. The same policies but far more tedious and bossy. Also lacking any ability to think on her feet or amuse.

    • Amanda
      Posted July 3, 2016 at 9:45 pm | Permalink

      Yes

      • Lee
        Posted July 4, 2016 at 8:05 am | Permalink

        Wow – John Redwoods alter ego is ‘Amanda’.

      • Anonymous
        Posted July 4, 2016 at 8:14 am | Permalink

        Amanda – I am being made to feel old, ignorant, foolish, selfish, wicked, unfashionable and afraid for having dared to vote Leave.

        Peter Hitchens’ final paragraph yesterday was a much needed fillip: “It is now clear the referendum result is being used as a pretext or cover for many things which would have happened anyway. Do not be scared by it.”

  11. Antisthenes
    Posted July 3, 2016 at 6:42 am | Permalink

    We knew the stayers were wrong on nearly every dire prediction they made on the run up to referendum day. It did not take a genius to work out that they were talking rubbish and all it did in the end was discredit them. That they are at it again. Sour grapes and churlishness can only be the reason or perhaps a masochistic desire to upset the apple cart to prove themselves right . For now at least Brexit appears to be giving a boost to the economy. I am sure George does not want that to happen. He knows that he has dug a hole for himself. However he believes by keeping digging he can get out of it again. Hopefully not as I hope the same will happen to him as happens to all those who dig holes too deep.

  12. agricola
    Posted July 3, 2016 at 6:47 am | Permalink

    Lets not be naïve , they were being partisan and all singing from Gideon’s hymn sheet. I hope they suffer the opprobrium of a new clean Conservative administration. I still maintain that Gideon et al were following the plan laid out by Bilderberg. The only person to acknowledge this to date has been Paulo Barnard, the presenter of economics on an Italian show called La Gabbia. Everyone else seems to shy away from references to Bilderberg, I wonder why?

    • Ian Wragg
      Posted July 3, 2016 at 1:34 pm | Permalink

      Cameron and Gideon were at a Bilderburger meeting the week before the vote in Dresden. I didn’t see any mention of it on the BBC or reported in the MSM.
      Ostensibly he was letting the Labour Party canvas whist he rested.
      I bet there was a very detailed plan in case of Brexit.
      I wonder what part Common Purpose played in the planning.

    • brian
      Posted July 3, 2016 at 4:31 pm | Permalink

      Too much paranoia.

  13. The Active Citizen
    Posted July 3, 2016 at 6:54 am | Permalink

    Agree totally. The only thing to add is that Osborne must resign the moment the leadership election is over, and Carney must go as soon as it can be done without spooking the markets.

    Osborne was disgraceful throughout the campaign and has been since. Carney’s interventions during the campaign and following the result have been extraordinary.

    We simply can’t have a BoE Governor who seems to care more about his future political career in Canada than he does in performing his supposedly politically-neutral role at the BoE.

  14. Javelin
    Posted July 3, 2016 at 6:56 am | Permalink

    Carney has politicised himself.

    Once he did this he made himself a political appointee who can be reshuffled out of his job at any time.

    • Lifelogic
      Posted July 3, 2016 at 1:28 pm | Permalink

      Indeed, but doubtless at vast tax payer expense.

    • stred
      Posted July 4, 2016 at 8:40 am | Permalink

      LETS SPEND THE £16,000 A WEEK WE SEND TO MARK CARNEY ON THE NHS

      When you analyze the BoE governers forecast and decisions over his period in charge, he amay as well have averaged the committee views and guessed. We may as well have an administration clerk in charge.

  15. fedupsoutherner
    Posted July 3, 2016 at 7:14 am | Permalink

    The chancellor and Carney are a disgrace. I am sick of both those and the BBC going on about the failures of this country. On Panorama there is yet another programme tomorrow talking about Brexit and Remain as if we are still deciding. Judging by the news this morning the government are still deciding even though the people have told them we want out. They are thinking of appointing May as PM without a vote!! This is the way they will water down what we thought we would get. Cameron should be very careful what he wishes for as the Tory party will prove to be toxic and the public won’t touch them with a bargepole. I have a very uneasy feeling about all of this. Just how committed is May to giving the people what they voted for??? Or will it be let’s follow our own agenda as usual and sod the people of this country.

  16. Pete
    Posted July 3, 2016 at 7:16 am | Permalink

    They shouldn’t apologise, they should resign. Carney and Osbourne need to go. They are not just incompetent they are working against the democratic wishes of the UK electorate. The longer they and other Remainers are allowed to stay in positions of power the more damage they can do. Get rid of them now.

  17. fedupsoutherner
    Posted July 3, 2016 at 7:20 am | Permalink

    If the BBC want some doom and gloom and to report on failures of an institution they could start with themselves. They have let the public down by not reporting honestly and by hiding much of what is going on in the rest of Europe. How about reporting about Austria not being happy or the Italian banks needing a bailout? There is so much unrest all over Europe but we don’t hear about it. It takes friends who are living in these countries to get the details out much of the time. There may be bits and pieces in newspapers but so far nothing on the BBC.

    • Ian Wragg
      Posted July 3, 2016 at 1:37 pm | Permalink

      No mention of Deutsch Bank being on life support. All is rosy in mainland Europe (not).
      Not a murmur from the BBC

  18. Leslie Singleton
    Posted July 3, 2016 at 7:29 am | Permalink

    We now learn (Mail on Sunday) that Mrs Leadsom “nailed her colours to the mast” only three years ago saying that Brexit would be a disaster. The only person left is Liam Fox. Let’s hope he has some acceleration.

    • fedupsoutherner
      Posted July 3, 2016 at 11:06 am | Permalink

      Leslie, Andrea Leadsome was quite honest this morning on the Marr show that she did at one time think leaving would not be good for the UK, BUT, that was before she researched the EU and found that there would be no reforms of the EU to the betterment of the UK and has therefore, since 2013, decided the UK would be better off out. This is surely what Cameron was advocating when he went to the EU demanding reform which he did not get.

    • Denis Cooper
      Posted July 3, 2016 at 11:23 am | Permalink

      She headed the Fresh Start group calling for reform of the EU, which seemed to me to be just another attempt to string us along. But she could have just accepted that Cameron had got no reform and either actively sided with Remain nonetheless or quietly sat out the referendum, instead she decided to campaign for Leave and was very effective doing that. I admit I was surprised by that, however “There is more joy in heaven …”

    • Richard1
      Posted July 3, 2016 at 11:58 am | Permalink

      This line is nonsense. Many people have changed their view on the EU as they feel the balance of advantage has changed. IAn Duncan smith declared during the campaign that he could have voted for Remain if a better deal had been got. At the time of the Maaastricht rebellion few of the Rebels wanted actually to leave the EU. I recall even JR being rather coy on this in recent years!

      I’m not sure who the best candidate is – probably Michael Gove – but excluding anyone who has ever favoured continued EU membership would leave very little choice!

    • Know-Dice
      Posted July 3, 2016 at 12:31 pm | Permalink

      I believe that was taken out of context, it was part of a much longer speech and research paper –

      May be somebody could find the original?

    • Ian George
      Posted July 3, 2016 at 12:37 pm | Permalink

      Three years is plenty of time to reflect on things and make your own mind up. I might think differently in three years but I think that any kind of turnaround now would be a disaster.

      I’m watching all that’s going on from outside the EU, incidentally, and from my perspective I think Andrea Leadsom is the only credible candidate… if what is wanted is to make Britain a better place in which to live. I’ve always said I would never come back to live there but Brexit has given me fresh optimism about the future (and not just for Britain though Btitain would become the driving force behind te change which I feel is desperately needed in this world – just LOOK at the mess it’s in).

      My optimism can only be maintained with a pro-leave Tory leader and I think that only Andrea Leadsom can do the job of banging everyone’s heads together.

    • Chris
      Posted July 3, 2016 at 12:37 pm | Permalink

      She then went on to investigate things further and helped found the Fresh Start group where she held a key role. Through that she found out the real problems concerning the EU and that the EU would not reform in the ways that would be needed for the UK. It was on the basis of the Fresh Start research that she had changed her mind, and later went to campaign strongly for a Leave vote. Sounds quite in order to me. (Better than Boris, who first seemed to become a Brexit campaigner not that many weeks ago).

      From Wikipedia:
      The Fresh Start Project was formed In September 2011 by three UK Conservative MPs, Andrea Leadsom, Chris Heaton-Harris and George Eustice.[3] Its expressed aims are to examine the options for a new UK-EU relationship, set out what this new relationship could look like, establish a process for achieving change and build political support to make it happen.[1]

      • Chris
        Posted July 3, 2016 at 12:40 pm | Permalink

        The opening statement should have been:
        Andrea Leadsom was in the early days apparently pro Remain, but she was perfectly well aware that the EU had to reform.

    • Lifelogic
      Posted July 3, 2016 at 1:31 pm | Permalink

      It seems to me there are only two left in it, The dire, tedious Mrs May and the fairly impressive Leadsom.

      I would have preferred Boris or perhaps Gove, but Gove destructed these options.

    • getahead
      Posted July 3, 2016 at 4:28 pm | Permalink

      MoS pro-remain newspaper. The only page worth reading is Peter Hitchens.

    • Leslie Singleton
      Posted July 3, 2016 at 5:22 pm | Permalink

      Later–And now Mrs May informs us that we need more than a Brexit PM. Gr8 but unfortunately re her candidature she is not even a Brexit (potential) PM, never mind more.

    • Caterpillar
      Posted July 3, 2016 at 8:33 pm | Permalink

      Leslie Singleton,

      One hopes that if the Goverment would get on with what the majority wanted, then another 48% of the population will make the same journey that Mrs Leadsom has. (48%-Mrs May who is highly unlikely to make the journey, already talking about more than Brexit, when this is the major policy direction of the U.K.)

      • Leslie Singleton
        Posted July 4, 2016 at 8:30 am | Permalink

        Dear Caterpillar–I haven’t grasped yet why Cameron didn’t trigger then resign–And that’s apart from the other story which is he said (but words mean nothing to him) he would trigger immediately and stay on to implement. I hope History pillories him.

    • libertarian
      Posted July 3, 2016 at 9:28 pm | Permalink

      So you dont think that any sane rational intelligent person should totally change their position when the circumstances and situation changes? Ok

    • MartinW
      Posted July 4, 2016 at 7:34 am | Permalink

      Is not a politician who changes his or her mind in the light of changed circumstances someone to be admired? Certainly I have enhanced respect for and confidence in someone who does. The politician to be wary of is one who boasts of never changing his or her mind. So Leadsom is to be applauded, having realised the EU in its present state is unreformable, just as Margaret Thatcher arrived (belatedly) at the same conclusion, and was deposed for her heresy.

  19. Alan
    Posted July 3, 2016 at 7:29 am | Permalink

    I hope no one voted Leave or Remain because of what might happen in the week after the referendum. I hope we all voted with our thoughts on the long term consequences.

    We may never know with certainty whether we are better off or worse off in economic terms because of leaving the EU. I think it’s a waste of time to try to assess it after a week.

    • DaveM
      Posted July 3, 2016 at 12:13 pm | Permalink

      Absolutely what any sensible person would say. It was a vote for the long term.

    • hefner
      Posted July 3, 2016 at 12:19 pm | Permalink

      As you say, in which case the best course of action is stopping reading JR’s at least till the end of the summer.
      May be I should apply this brilliant piece of advice to myself!

    • getahead
      Posted July 3, 2016 at 4:29 pm | Permalink

      Economic terms? What about in terms of sovereignty?

  20. Caterpillar
    Posted July 3, 2016 at 7:39 am | Permalink

    Yes, can Mr Carney resist his seemingly automatic response?

    (Looking forward to a new PM replacing Mr Osborne with a more positive, but realistic, Chancellor).

  21. Kev
    Posted July 3, 2016 at 7:53 am | Permalink

    Everybody is free to have their opinion about the economy. It’s funny that Brexiters like to have a say on everything that they don’t have a clue of but cannot tolerate other people’s views.

    • Jagman84
      Posted July 3, 2016 at 2:33 pm | Permalink

      Kev, do you understand the concept of a hypocrite? It had been a two-way street during the Referendum campaigns. The Remainers forecasts were mainly negative and wishful thinking, with total disregard for the effects of such scaremongering on the International markets.

    • Anonymous
      Posted July 4, 2016 at 8:16 am | Permalink

      Quite the reverse, Kev. As the 40,000 person march at the weekend attests.

  22. Old Albion
    Posted July 3, 2016 at 7:57 am | Permalink

    And the ‘sore losers’ protesting yesterday reckon they were lied to.

    • Roy Grainger
      Posted July 3, 2016 at 11:08 am | Permalink

      The anti-democracy protest yesterday was made up entirely of Remainers. Their position is that using their superior intellect they personally knew the Leave campaign was lying but the 52% of thick people didn’t. Not sure why their march was in London though, shouldn’t it have been in Sunderland ?

    • Denis Cooper
      Posted July 3, 2016 at 11:27 am | Permalink

      If there had been no lies Leave would have won by a greater margin.

    • Ian Wragg
      Posted July 3, 2016 at 1:39 pm | Permalink

      They were lied to by their own side. Cameron and his mates were a disgrace.

    • Leslie Singleton
      Posted July 4, 2016 at 8:38 am | Permalink

      Dear Albion–Suzanne Evans was great on this yesterday (Radio News) whilst she was putting Blair back in his box. Blair seemed to think that the only problem or cost associated with immigrants is benefits. How much more wrong can you be? Well he went on to tell us how we should stay in and meet any concerns from within–except you would think it relevant that that has been proved totally impossible

  23. turboterrier
    Posted July 3, 2016 at 8:06 am | Permalink

    Well the party has gone and done it again it would appear to have hit the self destruct button.

    So much for democracy and giving the population a chance to vote on their future and have some form of say and control over our country’s future.

    If the decision to just appoint May is allowed to take place and basically ignore those politicians that voted to leave begs belief, if the remain rally think that action like that will influence politicians wait and see what the leave campaigners can do if we perceive we are being well and truly stitched up.

    If the those on yesterday’s rally are so really loved up with the EU. GO AND LIVE THERE. God knows what they are going to do in the next few years when the project starts losing more countries that like us are waking up and beginning to smell the coffee.

    The way things are going what with the trouble within the Labour Party it will be the end of parliament as we know it. Farage and the other right wing parties must be looking upwards and mouthing “thank you”.

    This nonsense has got to knocked on the head immediately if anyone who values this country and wants a real future with real principles doesn’t start walking away from politics altogether at worse or start another party.

  24. John Bracewell
    Posted July 3, 2016 at 8:09 am | Permalink

    Well said. The Treasury and Bank appear to be talking down the country and economy in order to make their predictions come true, instead of doing their job which is to talk the economy up and give reassurance. If there were to be a downturn in the future months then would be the time to cut interest rates and abandon fiscal rules but not until there is some reason to do so. Unfortunately for Osborne and Carney, if the present figures pertain for a month or so there may be new factors like the new PM does not meet with approval, or another round of Euro crisis may occur which could be argued to be the cause of any downturn then, although I expect they would try their hardest to make Brexit the culprit.

    • Qubus
      Posted July 3, 2016 at 5:23 pm | Permalink

      Am I missing something? I thought that we needed a weaker pound for exporting and that the BoE was chasing an inflation rate of +2%.

      • Leslie Singleton
        Posted July 4, 2016 at 8:42 am | Permalink

        Dear Qubus–I have been saying for a long time that the Government seems to have no clue whether they want inflation to go up or down. Per Osborne’s latest spoutings he doesn’t seem to understand the difference (on tax) between up and down, which might be part of his problem.

    • Qubus
      Posted July 3, 2016 at 5:26 pm | Permalink

      A bit off topic, but didn’t William Hague once compare being in the EU to being in a burning building without a fire-escape?

      Seems to have changed his tune a bit.

  25. Roy Grainger
    Posted July 3, 2016 at 8:39 am | Permalink

    It is interesting that the entire thrust of Japanese government policy is to weaken the Yen and increase inflation to boost exports and the economy in general. In UK it is also Osborne’s policy to boost inflation to 2% – his own target which he’s failed to meet for years. Now when something happens to help him meet his target he moans about it. He has no credibility – I assume he’s behind May’s campaign and will remain Chancellor ? Someone should ask her.

  26. Lifelogic
    Posted July 3, 2016 at 8:39 am | Permalink

    Apologise, rather unlikely! Politicians only usually apologise for things they had nothing to do with, things like the potato famine or Hillsborough. Things that happened rather before their time.

    We still await an apology for the ERM, from John Major & those others actually responsible, and indeed one for ongoing the EURO disasters.

    Perhaps one is due from Cameron for his cast iron ratting, his repaying the debt lies, no if no but to the tens of thousands and his “At heart a low tax Conservative lies” …….

    Also one is certainly due from Osborne for ratting on his IHT promise (while pretending not to) and his general economic incompetence all over the place.

  27. acorn
    Posted July 3, 2016 at 8:43 am | Permalink

    We have got the Treasury trying to second guess the Office of Budget Responsibility (OBR) Quango. The OBR is trying to second guess what the Treasury is doing. The OBR is made up of ex Treasury guys, who will want their jobs back, at the Treasury, when the OBR goes out of fashion along with Osborne.

    The Central Bank (BoE), doesn’t know whether its arse is bored or countersunk. It is fed up with being the whipping boy Quango for the Chancellor; it now knows for sure, that “monetary” tools don’t work and actually never did. Its two tools, swapping government bonds back into cash (liquidity) and vice versa; and lending money like a high street bank, isn’t going so well.

    At the GFC, we had high street banks running as much as 44 to 1 equity leverage ratios, they were insolvent if 2.5% of there loans went bad, which they did. The BoE runs at about 120 to 1 equity leverage. It has to be back-stopped by the Treasury to lend. Hence the most beautiful and ingenious piece of smoke and mirrors ever invented; “The Funding for Lending Scheme”. Or, how to dress up a fiscal injection by the Treasury, as a BoE monetary injection, without any of it turning up in the budget deficit (PSNB).

  28. Lifelogic
    Posted July 3, 2016 at 8:57 am | Permalink

    After Gove’s knifing of Boris and damaging himself in the process, I am further put off Gove by his alleged strong friendship with the clearly economically incompetent Osborne.

    Gove is however right today in suggesting that executive pay mechanisms need looking at. Many director get away with running companies into the ground, while drawing huge sums themselves for abject failure. Shareholders need far more powers to control this.

    • Richard1
      Posted July 5, 2016 at 5:42 am | Permalink

      As in a number of other areas we could learn from Switzerland – a simple requirement that directors (and perhaps any employees paid more than directors) have their total remuneration (NB better disclosure, US style, needed) voted on each year by simple s would have the dual benefit of improving corporate governance and being very popular.

  29. fedupsoutherner
    Posted July 3, 2016 at 9:02 am | Permalink

    Andrea Leadsome gave a very good interview on Marr this morning. Full of optimism and the one thing I picked up on was her insistence that the public are fed up of career politicians and need someone who has lived on the outside. She gave a refreshing and positive view for the UK in the future outside the EU and has obviously researched her stuff.

    On the other hand Kinnock was his normal puffed up self. It made me laugh when he derided all the grandees with their views on Corbyn but failed to realise that it was the same grandees, including himself, that all us leavers had to listen to during the debate over the EU referendum.

    • Lifelogic
      Posted July 3, 2016 at 11:11 am | Permalink

      Indeed the several Kinnocks are the very embodiment of over paid, lefty, Career seeking politicians, they are I suspect hugely disliked by most right thinking people.

      Leadsom seemed solid & sound. Now that Gove has committed both assassination and suicide it seems Leadsom is the only hope to save us from the appalling prospect of the tedious, bossy, wrong headed and cowardly Theresa May.

      Anyone who, only a few days ago, assured the nation that (in the EU) we have control of our border through Schengen is either a blatant liar or a dam fool. Perhaps she can explain which it was.

    • Roy Grainger
      Posted July 3, 2016 at 11:11 am | Permalink

      Papers today quote Leadsom saying Brexit would be a disaster only three years ago. Gove really has managed to comprehensively screw things up, probably a good thing he’s not running Brexit negotiations.

  30. Denis Cooper
    Posted July 3, 2016 at 9:06 am | Permalink

    This is all very fine, JR, but read the comments at the end here:

    https://ukconstitutionallaw.org/2016/06/27/nick-barber-tom-hickman-and-jeff-king-pulling-the-article-50-trigger-parliaments-indispensable-role/

    “There is a very simple answer to all of this. It has nothing to do with the prerogative, the 2011 European Union Act or the (non-binding) EU referendum. It all comes down to the fundamental constitutional principle of Parliamentary sovereignty …

    … The High Court is currently seized of an application for Judicial Review where this point is being argued. The papers were lodged last week. The Court has already ordered HMG to respond on an expedited basis and has observed that the matter raises issues of constitutional importance. These issues require to be determined and will be decided over the course of the next few weeks. An injunction has been applied for to prevent any Art 50.2 notification being given absent a decision by Parliament to withdraw. That will require a vote in Parliament where Parliamentarians can vote with their consciences, which is what they were elected to do in the first place. The referendum was a side show and irrelevant.”

    “The referendum was a side show and irrelevant”; so why is anybody bothering to talk about what has happened in the markets since, or what might be done if its result was implemented, or who will be the next Tory leader and Prime Minister and will follow “old cast-iron” in conniving to prevent the referendum result being implemented?

    The only relevant part of the latter being that the leading candidate to take over has a well-established track record of losing court cases.

    • acorn
      Posted July 3, 2016 at 3:50 pm | Permalink

      At a liquid lunch yesterday, Art 50 was discussed. I was told:-

      (a): I was forgetting that the UK is one of only two Common Law countries in the EU. I was left unclear why that matters.

      (b): Judicial review; we have no codified constitution, so the judges will look for precedents in the last few centuries or so.

      (c): Now would be a good time to have a coup d’etat, in the form of another “glorious revolution” of 1688. Assuming the Dutch could come up with another William of Orange. I suggested Ruud van Nistelrooy, which was unanimously agreed.

      (d) We let Scotland go, free and clear, with a small divorce settlement, based on relative population size; they have to adopt the Euro on day one. We promise to buy their fish.

    • rose
      Posted July 3, 2016 at 10:35 pm | Permalink

      Who is paying the lawyers?

  31. Bert Young
    Posted July 3, 2016 at 9:16 am | Permalink

    Whose surprised at the utterings from the young boy . Osborne should never have been Chancellor – his appointment was via another inexperienced young boy who will exit Downing Street in the very near future .

    The complexities of running this country can not and should not be in the hands of personality cult individuals with little real life experience ; a proven background of success for at least 10 years in the competitive world is a minimum qualification . I also believe strongly that the leader of this country must not surround Himself/Herself with a team who are simply there to support and agree ; good leaders always need to be challenged by alternative views – it is only then that decisions made have the confidence of balance .

    We face a future untrammelled now with the vagaries of Brussels ; the markets are out there ready to be grabbed and we must show that we can chase them and secure them .

  32. Posted July 3, 2016 at 9:29 am | Permalink

    Before cutting interest rates unnecessarily, the establishment need to remember that the oldies who put them in power and carried the referendum are already suffering severe cuts in their retirement incomes because of the existing run of low rates.

    We are the people with the spending power to boost the economy. Yes, I feel for hard working families such as my daughter’s who would benefit from a rate cut once their fixed term mortgages come up for renewal, but what about the two thirds cut in my income from my investments since I retired 12 years ago?

    I’m beginning to think that a rise interest rates would not only be better for me personally but would benefit the economy as a whole by boosting our disposable income.

    And as for the youngsters? Well yesterday they were carrying banners in London proclaiming “We are the 48%” totally missing the point that (1) 48% is a losing percentage (2) two thirds of under 24 years olds didn’t even vote!

    Frankly I despair for the educational standards in this country and for the future unless the upcoming generation begin to grasp reality rather quickly…

  33. brian
    Posted July 3, 2016 at 9:34 am | Permalink

    It is too early to judge whether the forecasts were wrong. Were the forecast for one week ahead?

    • David Tomlinson
      Posted July 3, 2016 at 2:14 pm | Permalink

      Yes

    • Spinflight
      Posted July 3, 2016 at 8:02 pm | Permalink

      Yes…

      The two reports were titled immediate and long term effects.

      Too soon to say about long term effects, though the treasury’s assumed not a single trade deal signed in 15 years looks to be distinctly shaky already.

  34. Jagman84
    Posted July 3, 2016 at 10:06 am | Permalink

    I have noticed the almost complete lack of speculation in the mainstream media, regarding the post of Chancellor of the Exchequer. It appears that they wish to actively promote Mrs May into a ‘coronation’ and thus, allow the incumbent to remain in his place. Then, after further months of obfuscation and wrong-headed financial management, we will be persuaded that it’s all due to ‘Brexit uncertainty’ and maybe we should ‘think again’. I am not a fan of invoking Article 50 (for the reasons frequently outlined on this blog) but fear it may need to be done to head off the 5th columnists in Government and opposition.

    • Denis Cooper
      Posted July 3, 2016 at 12:00 pm | Permalink

      I have a lot of respect for Bernard Jenkin but I was appalled to read what he said in that debate on February 25th linked in my comment below.

      Yes, we have had a referendum and the vote has been in favour of leaving the EU, but that does not mean that the UK government is relieved of any of its obligations under the EU treaties; we previously agreed that if any member state wants to leave the EU then it should use the procedure laid down in Article 50 TEU, and that is what we should try to do in the first instance.

      Those who persist in saying otherwise, and who say for example “that should be decided by Parliament, not by the Government acting on Crown prerogative” are not helping us to get out of the EU, they are helping to keep us in it.

  35. Newmania
    Posted July 3, 2016 at 10:17 am | Permalink

    Gold is up and bonds are up for the same reason, it takes a while to destroy a country but this is just fear. We are still in the single market , nothing has happened .I have tried to explain to you why the end of the City would be an apocalypse but you do not publish my posts and presumably prefer to continue with this ridiculous line .
    Credit rating lost, pound plummeting and may hit GDP/USD parity in the next year . The Economist Intelligence Unit projects a 6% contraction by 2020, an 8% decline in investment, rising unemployment and falling tax revenues. Public debt will reach 100% of GDP ( as both Ms May and others have said ). In simple fiscal terms that would be about £375bn. In this context Brexit lies about the NHS, are enough to make you weep.

    For eight years we fought to keep the growth of debt under control. The Liberal Party sacrificed itself by supporting a coalition in this cause . Money for NHS, nope ,money for jobs and infra structure ,nope, money for Public sector pay, nope and so on . Now we are throwing £375bn away, to save the skins of a traitor political class whose self interest in many forms brought Brexit about .
    Race hate crime has multiplied, we are already in recession and the whole Brexit ‘inverted pyramid of piffle’ has collapsed . We are without any government at the mercy of 150,000 blimps who are the members of the Conservative Party .

    Gee thanks John , good job, I see a knighthood in the future for this fine work

  36. MikeP
    Posted July 3, 2016 at 10:35 am | Permalink

    John isn’t the rise in the FTSE100 just a corresponding adjustment for the fall in the pound to maintain the same valuation of those companies?
    Not that that is a bad thing but it’s not the same as a FTSE rise alongside a strengthening pound?

    • Leslie Singleton
      Posted July 3, 2016 at 5:51 pm | Permalink

      Dear Mike–A strengthening pound is the last thing we want–At least till the Balance of Payments balances so to speak

  37. behindthefrogs
    Posted July 3, 2016 at 10:39 am | Permalink

    You cannot ignore the fact that FTSE 250 shares have crashed and interest rates for savers are also on a downward trend. Both are likely to have an adverse affect on pension returns.

    Reply The 250 has rallied and is not much down now

    • MikeP
      Posted July 3, 2016 at 3:57 pm | Permalink

      If your pension includes a sufficient weighting towards Equity-based and gilt-based funds, they both rose by 10% in the last couple of weeks, more than making up for losses or stagnation elsewhere.

  38. Denis Cooper
    Posted July 3, 2016 at 10:44 am | Permalink

    Right back to 2013 when it was James Wharton’s Private Members’ Bill I have repeated ad nauseam that the Act for the EU referendum is silent on what would ensue from a vote to leave the EU. It could have laid down some deadline by which the minister must have sent in the formal notice that we intended to leave the EU, but it doesn’t.

    However this does cut both ways, because Parliamentarians could have insisted on it saying that the Article 50 notice could not be sent it without Parliament having first authorised that step, by a resolution passed just by MPs or by both Houses or by a fresh Act or whatever, but they were not so concerned about Parliamentary sovereignty that they did that; arguably it’s a bit late for them to start complaining about it.

    And that was at least the third opportunity they had to assert that claim; back in 2008 they could have refused to pass the Bill to approve the Lisbon Treaty unless it included a provision to prevent the government using Royal Prerogative to activate the new Article 50 TEU “exit clause” without the prior approval of Parliament, but they didn’t; and then again in 2011 during the passage of the “referendum lock” or “sovereignty” law, the European Union Act 2011, MPs and peers could have insisted on the inclusion of Article 50(2) TEU on the list of treaty provisions where the minister could not act without first gaining the approval of Parliament, but they didn’t do it then either.

    • David Tomlinson
      Posted July 3, 2016 at 2:21 pm | Permalink

      JR will confirm that in his debate with Dominic Grieve at Magdalen College, Oxford before the referendum Grieve explicitly said that the government on its own could abrogate the European Treaties but politically it would be wise to get Parliamnetary sanction through repeal of the 1972 Act.
      Grieve as Attorney General impicitly confirmed that there would be no need to go the Article 50 route nor did he envisage Parliament not implementing the referendum result.
      Grieve is of course a confirmed Remainer backing May.

  39. William Long
    Posted July 3, 2016 at 10:47 am | Permalink

    I entirely agree with you but an apology from the Treasury or the Bank comes out of the same book as such phrases as ‘As likely as a snowfall at the equator’ and others similar! I do not think we are likely to get sense from either institution until we have a new Chancellor and I hope you will make that a condition when you make your choice of which leadership candidate to support.

  40. Denis Cooper
    Posted July 3, 2016 at 10:51 am | Permalink

    It has also been pointed out that on February 25th 2016 both Hammond and Lidington clearly told MPs that the decision on whether to trigger Article 50 would be a decision for the government, not for Parliament:

    https://hansard.parliament.uk/Commons/2016-02-25/debates/16022537000001/EuropeanAffairs

    Column 497, Hammond:

    “Let me be clear; the Government will respect the outcome of the referendum, whatever the result. There will be no second referendum. The propositions on the ballot paper are clear, and I want to be equally clear today. Leave means leave, and a vote to leave will trigger a notice under article 50. To do otherwise in the event of a vote to leave would represent a complete disregard of the will of the people. No individual, no matter how charismatic or prominent, has the right or the power to redefine unilaterally the meaning of the question on the ballot paper.”

    “A vote to leave would trigger a fixed two-year time period under the treaty for the UK to negotiate the terms of our exit from, and our future relationship with, the EU.”

    Column 498, after Salmond had asked:

    “Before notification was given under article 50, given that the referendum is an advisory one in terms of the constitution, would there be a vote in Parliament?”

    “The Government’s position is that the referendum is an advisory one, but the Government will regard themselves as being bound by the decision of the referendum and will proceed with serving an article 50 notice.”

    Column 517, again replying to Salmond:

    “I wish to clarify something. I answered the right hon. Gentleman on this point earlier, but I have taken advice since. It is the Government’s position that if the electorate give a clear decision in this referendum to leave, the Government will proceed to serve an article 50 notice; there will be no need for a further process in this House.”

    Column 564, Lidington:

    “It is for the Government of the United Kingdom … to decide whether to trigger an article 50 process after such a referendum result.”

    “The United Kingdom is the signatory to the European treaties, and therefore it is the UK Government who take the decision on whether to invoke article 50.”

    MPs had opportunities to not only object but to force through a motion asserting their counter-claim, and prevent the government promising in its official booklet that:

    “This is your decision. The Government will implement what you decide.”

    but as they were not sufficiently bothered to do that before the vote I can’t see they have any right to do so now that the vote has gone the “wrong” way for most of them.

    • Chris
      Posted July 3, 2016 at 4:49 pm | Permalink

      Splendid research, Denis. This needs the widest possible dissemination.

    • John Franics
      Posted July 3, 2016 at 4:52 pm | Permalink

      Dennis, you are an overflowing fountain of accurate information about all matters EU and Parliamentarian. Thank you for your erudite and oh so helpful comments.

    • Anonymous
      Posted July 3, 2016 at 11:06 pm | Permalink

      Denis – Even if we don’t get out a Leave referendum result is an achievement. It stands as the ultimate evidence that the EU is anti democratic.

  41. ian
    Posted July 3, 2016 at 10:54 am | Permalink

    Quit right john but they will do as they like with other world banks & treasury and play follow the leader.
    I still see 1.8 trillion in national debt by the end of this parliament and off sleet balance debt right up with council debt from borrowing from banks and private companies at very high interest rates.
    I still see around 1.6 growth this year and next and inflation above 2%.
    Assets prices should go up quit a lot over the next 2. 1/2 year with largeness from central banks and governments, there just no stopping them.

  42. adam
    Posted July 3, 2016 at 11:15 am | Permalink

    Too early isn’t it

    BUT

    The BBC needs to be held to account. Why do they continue to forecast markets. The got it wrong during the 07-08 recession by saying oil prices would now stay above $100 forever. And now with Brexit they are continually promoting financial doom claims.

    There has got to be something to stop them announcing markets will do what they want makers to so and only focusing on markets when they match what they predicted.

  43. Tad Davison
    Posted July 3, 2016 at 12:20 pm | Permalink

    ‘They said consumers would cut back their spending.’

    They completely forgot to consult my old woman!

    Each and every day, the merchants of doom are allowed to get away with their campaign of misinformation to the point where it might yet become a self-fulfilling prophesy. Create a feeling of insecurity, and it tends to put people off making investment decisions.

    I suggest the tendency to talk Britain down is countered whenever and wherever possible by those who are best placed to articulate the alternative narrative.

    Tad Davison

    Cambridge

  44. Local Lad
    Posted July 3, 2016 at 12:22 pm | Permalink

    Thank you, Mr Redwood, for the upbeat views you express. We need that to counter the gloom and doom merchants who are still talking down the UK and throwing their toys out of the pram because they didn’t get their way.

  45. Denis Cooper
    Posted July 3, 2016 at 12:45 pm | Permalink

    Here’s the latest nonsense, another distraction from the reality that our referendum victory is slipping from our grasp with every passing day:

    https://www.thesun.co.uk/news/1382493/top-tories-unite-to-stop-theresa-may-becoming-prime-minister-by-coronation/

    “Veteran Eurosceptic Bill Cash, who is backing Leadsom, said Brexit backers could even go to the High Court to seek a judicial review if they did not have the option of voting for a candidate who wanted to leave the EU.”

    Set aside as unimportant the fact that diehard Remainders are already seeking a judicial review to keep us in the EU.

    http://jackofkent.com/2016/06/why-the-article-50-notification-is-important/

    “On Thursday 23rd June 2016 there was a historic referendum vote. A clear and decisive majority – though not a large majority – voted for the United Kingdom to leave the European Union.

    And the following day, Friday 24th June 2016, something perhaps just as significant did not happen. The UK did not send to the EU the notification under Article 50 of the Lisbon Treaty on European Union which would have commenced the withdrawal process.”

    “The fact is that the longer the Article 50 notification is put off, the greater the chance it will never be made at all. This is because the longer the delay, the more likely it will be that events will intervene or excuses will be contrived.”

  46. ian
    Posted July 3, 2016 at 12:50 pm | Permalink

    Government Debt, banks, big business and the EU.
    Talks cost money, by the time the above have negotiated there will be very little money saved if any, that’s why I say no talks just come out.
    Last year the EU court told the treasury to give big business back 7 billion a year for three years that will not be stopped and another 8 billion this year as well as last year for Europeans stimulus fund which was going to be a off payment but last year the money went missing, it for a stimulus fund so the EU can borrow 300 billion more and will include middle east and Africa that’s on top of the aid fund hear of 13 billion a year which goes up with GDP with most of that going to the middle east and Africa to corrupt governments and dictatorships with very little of that money going to the poor people, most will be spent on arms and luxury goods from the west.

    The UK has a lot money tied up in funds and other things in the EU which will not be
    coming back and of cos they will pay next year fee of 10 billion and of cos another 350 thousand people net coming in this year and next with every little extra money for hospital and schools, you might get some housing but there will be little time left this parliament to do much, maybe just the paperwork and the plan and handful of houses.

    As for overseas companies coming hear and buying UK companies and not paying into the workers pension funds and changing workers pension funds contracts so the money already in the pension funds pays out less money or making the government take over the pension funds so they can take all the profits is a well thought out plan by overseas business to make are companies earn more money and put that profit offshore and the workers receiving less money in retirement and the government hear picking up the bill with less taxes and paying out for the workers retirement in some cases.

  47. Richard1
    Posted July 3, 2016 at 12:52 pm | Permalink

    I would like to hear much less from journalists and Conservative MPs about how Michael Gove has supposedly “betrayed” Messrs Cameron and Osborne. If you are in public life you need to do what you feel is best for the Country, irrespective of who your mates are. It’s not a club or a student political society. I couldn’t care less whether Gove Cameron and Johnson are or are not friends & are or are not happy with each other. I care about who is best to lead the Country in this negotiation with the EU and who will quickly adopt the radical policies needed to restore confidence and enhance prosperity.

    If JR is still considering where to pledge support I hope he will focus on the suitability of the candidates and their policies not on whether or not they are loyal to one or other chum!

    I write this as Andrew Marr is conducting an absurd interview with Gove, entirely focused on this sort of drivel, and has not so far got to any policies Gove might implement!

    • Richard1
      Posted July 3, 2016 at 12:53 pm | Permalink

      I meant Cameron and Johnson

  48. CHRISTOPHER HOUSTON
    Posted July 3, 2016 at 12:54 pm | Permalink

    I should think BoE Governor Mr Carney will be odds on favourite for taking over the stewardship of the European Central Bank. Mr Draghi retires in the next couple of years. Unless of course it is decided he will retire early.
    In these circumstances it will be in the free and sovereignUK’s strategic interest to give Mr Carney a jolly good reference for the job. So no, he should not apologise. Why?

    As to the Treasury apologising. No. It is their fame for making gross errors in fortune telling that allowed our people to make the correct decision by ignoring their advice.

    On a cautionary note: we must beware of always following the exact opposite advice which the Treasury offers. After all, we’ve all heard the proverb of the monkeys given pens and paper. With infinite time they will, in accordance with the laws of mathematical probability, write the complete works of Shakespeare. Probably with the slight alteration that Mr Osborne will star as Bottom.

  49. ian
    Posted July 3, 2016 at 1:15 pm | Permalink

    I just read that the EU has missive black hole and needs bailing out, so 1.8 trillion national debt seem a bit light now, maybe 1.850 trillion.

  50. ian
    Posted July 3, 2016 at 1:23 pm | Permalink

    with off sleet debt should be about 2.2 trillion by end of this parliament, I think your 1.695 trillion you posted is just a dream but there is no harm in dreaming.

  51. MickN
    Posted July 3, 2016 at 2:09 pm | Permalink

    Did you see the “40,000” people marching against democracy in London yesterday.
    They should be very careful what they wish for. I am afraid that if the majority that voted for Leave find our politicians voting for or acting against their wishes they too will take to the streets and in far greater numbers.

  52. Posted July 3, 2016 at 2:22 pm | Permalink

    I hope that our host, as has been rumoured, will come out for Andrea Leadsom.

    We have heard from Teresa May today that she would be in no hurry to make the all important Article 50 declaration, yet we know that the 27 are not prepared to start discussions until after it. One can only be suspicious of the motive of anyone wanting to delay the declaration, especially if they have been on the Remain side throughout the campaign.

    Andrea, by contrast, was very clear on Marr this morning that she would make the declaration immediately, thus injecting some certainty and securing our victory.

    The Remainers are clearly hoping that a delay could somehow be used to ignore the result, Blair has said as much this morning. Possibly they will try to intimidate Parliament into ignoring the “advisory” referendum result by bringing huge numbers onto the streets.

    Despite having said “Brexit means Brexit”, could Teresa May be hoping the same ?
    If so, things could get very ugly very quickly.

    Assuming that reporters are right, and Michael Gove is effectively out of the running, Andrea has to be the safe choice for the Conservative membership who appear to be overwhelmingly in favour of Brexit.

    If we regard ensuring the outcome is respected, she has to be the safer choice. What she lacks in Cabinet experience, she more than makes up for in intelligence and steely determination.

    Heir to Thatcher ? She certainly has a better claim to that title than Teresa May.

  53. Javelin
    Posted July 3, 2016 at 2:27 pm | Permalink

    I do hope you vote for Leadsom.

    I don’t know if you still have political instincts. But just to remind you.

    But over 70% of conservative members and 60% of the public want Leadsom.

  54. ian
    Posted July 3, 2016 at 2:39 pm | Permalink

    The libs smashed up on to rocks last year and labour this year but the labour leader will carry on, party spilt might be coming now with another party formed so there might be by elections because of labour party rules.
    As for the con party, you are on the way out, whoever the leader is the public will not like them because coming out of the EU is going to be a right mess up coupled with the debt going up and the economy not doing well as it should of done.

    A con party spilt look on the cards and with all this going on but maybe not till after the next election, independent MPs will start to come along, could be one this week from ukip, it only a matter of time.

    So you could end up with two or three new parties and more than one independent MP with only 600 seat to fight for and if you think the people at the con party constituencies are going to run round at the next election to get con party MPs elected you can forget it.

    It my way or the high way, I do my best work in my sleep brother.

  55. Francis Blank
    Posted July 3, 2016 at 3:30 pm | Permalink

    That would be a little premature, as no one really expects the economy to implode until the “Article 50” self destruct button is pushed.

  56. ian
    Posted July 3, 2016 at 3:37 pm | Permalink

    Just see a lovely bit in guido fawkes and bit of it true, should make a good leader. the home office minster.

  57. Alexis
    Posted July 3, 2016 at 3:39 pm | Permalink

    Thank you, a very interesting and enjoyable post.

    Consumer and business confidence looks fine where I am sitting. Most of the economy does not depend on the EU, and to some it is a hindrance.

    It may indeed be too early to call the effects of the referendum – but that has not stopped multiple media commentators apparently revelling in the early FTSE drop; the SNP leader’s pronouncements (which fell on rather stony ground); and the news that one employer planned to open an office on the Continent. Another had a woe filled article on what might happen if the banks leave, being short of anything else to report on.

    There’s much to deal with. But Brexit improves our ability to respond.

    That’s what actually matters.

  58. Denis Cooper
    Posted July 3, 2016 at 4:57 pm | Permalink

    Lords debate on Tuesday:

    http://www.parliament.uk/business/news/2016/july/lords-debates-eu-referendum/

    “Members of the Lords, including an independent reviewer of national security arrangements in Northern Ireland, a professor of contemporary British history and a former chancellor of the exchequer, will debate the outcome of the referendum on membership of the European Union, on Tuesday 5 July.”

    Lords Library briefing here:

    http://researchbriefings.parliament.uk/ResearchBriefing/Summary/LLN-2016-0034#fullreport

    “Following the result of the referendum held on 23 June 2016, this House of Lords Library briefing examines what Parliament’s role would be in the process of withdrawing from the European Union in several key areas: invoking Article 50; overseeing the negotiation process; ratifying agreements; repealing and reviewing domestic legislation.”

    The aim is for Parliament to neutralise the result of the referendum. There is already an application for judicial review to stop the government doing what it promised to do in the event of a vote to leave the EU:

    “This is your decision. The Government will implement what you decide.”

  59. ian
    Posted July 3, 2016 at 5:10 pm | Permalink

    The in campaigners have shut their wallets already to try to force the country into a u- turn to stay in the EU, this is all down to the government with the elite, establishment, forcing their way onto the workers and the poor of this country, as wet & mad and BOE leads the way to put the country into a recession, my forecast of 1.6 percent growth this year could smashed to – 0.2 if they carry on with this.

    At the end the day its these people who do most of the spending and call the tune.

  60. Qubus
    Posted July 3, 2016 at 5:14 pm | Permalink

    Just heard a reporter on BBC Radio 4 say that Mrs Gove’s comment to her husband on hearing that Brexit had been successful was: ” You were only meant to blow the bloody doors off”.

    I think that just about sums it up.

  61. Denis Cooper
    Posted July 3, 2016 at 6:37 pm | Permalink

    I had foolishly thought that the referendum result meant I might not have to write any more letters to my local paper; but, no, thanks to that skunk Cameron it seems that we now have to fight it all over again; so here’s a little letter that I’ve just sent:

    “Dear Sir

    Before the referendum the government had a leaflet delivered to every household in which there was a crystal clear promise:

    “This is your decision. The Government will implement what you decide.”

    Now after the referendum there are moves not to implement our decision as promised but instead to neutralise it, with parliamentarians who previously showed no interest in controlling the process of withdrawal from the EU now stirring to assert that they should have the right to do that, which of course means that they should have the right to block it.

    As part of her pitch to become Tory party leader and Prime Minister our MP Mrs Theresa May has said that “Brexit means Brexit”, but how will she guarantee that in the face of a Parliament which is overwhelmingly hostile to Brexit, the unelected Lords especially so, and when diehards in the Remain camp have already lodged an application for judicial review?

    Yours sincerely …”

  62. Margaret
    Posted July 3, 2016 at 7:14 pm | Permalink

    All I can say is falling off a cliff by Hugo First.. childish yeh! but it is too early yet . I have great confidence in GB’s ability to rise to new challenges. Hopefully interest rates won’t fall any more and the balance required for savers and investors respected.

  63. sulis
    Posted July 3, 2016 at 9:46 pm | Permalink

    Thank you for keeping us informed.

    Negotiations are best started from a position of strength. The other party have a distinct advantage if they know you are not prepared to walk away. I am concerned about Teresa May, EU leaders know she was a ‘remainder’ so despite any tough talk, she is more likely to seen as an easier opponent in any EU negotiations than a confirmed Brexiter.
    Needless to say these negotiations are a once in a life time opportunity and it is of upmost importance that the UK have the strongest possible leader.

    • Anonymous
      Posted July 4, 2016 at 8:20 am | Permalink

      Unfortunately most Tory MPs wish to remain in the EU and the Tory press is lining up behind May.

      It is like a nightmare where one is trying to escape a hotel of never ending corridors that all look the same.

  64. Spinflight
    Posted July 4, 2016 at 12:46 am | Permalink

    It seems to me that it was uncritically assumed that remain politicians had the upper hand when talking about Sunderland and our car industry. The only response was that the Germans sold us more cars than we them.

    With the drop in sterling however,

    A £10000 car at the border with a 10% tariff would currently, post brexit, be a 13107 Euro one.

    Pre Brexit that £10,000 car without a tarif would be a 13050 Euro one….

    A £44 difference.

    Surely the reduction in tarifs for raw materials, which I understand are mainly from the outside world, and the prospect of cheaper energy would see the UK car industry be more competitive then, not less? Especially given the Keiretsu style with co-located small companies supply the final assembly plant..

    Indeed surely this is true for all high value added industries? Does this not explain maybe why our exports to the EU have fallen whilst those on the outside of their tarif wall have risen?

    I do like to challenge assumptions, and one that is prevalent is that we need to negotiate a trade deal with the EU first.

    Why?

    There doesn’t appear to be a decent analysis of the impact WTO rules would actually have, the treasury’s dodgy dossier is woeful and proveably incorrect. Indeed it’s prediction of doom and Godzilla walking the earth to devour us was based upon economic forecasts which are clearly the opposite of what happened. Surely then it’s conclusions are likely to be reversed in actuality?

    The EU are refusing negotiations until Article 50 is invoked. This is their choice.

    We have on the other hand most of our extended family offering to begin negotiations with New Zealand even offering us negotiators.

    In order for free trade to flourish their has to be the political will for this to happen, it is clearly present in the wider world and absent in the EU so why should we place their interests above those of our cousins in Canada, Australia and New Zealand?

    Why should we value access to the EU market above that of access to India’s? Why should the three constituent members of Nafta who have all expressed a desire to begin negotiations be left begging whilst we sort out a deal with an organisation on record as saying they wish to punish us through a trade deal?

    I cannot see any reason why we should value the livelihoods of french farmers above New Zealand’s. I can see a case for Ireland but that itself depends upon the stated will of the EU.

  65. Jack
    Posted July 4, 2016 at 12:53 am | Permalink

    Please JR, do you understand the need for much larger government deficits (7DIF)? Scotland and London won’t want to leave the UK if GDP growth is running at close to 10% in real terms per annum.

    Massive tax cuts should be priority regardless. Our 4% budget deficit is far too small and 2% annual growth isn’t good enough. It’s not enough to create full employment and maximise our prosperity.

  66. Anthony Makara
    Posted July 4, 2016 at 7:39 am | Permalink

    “It means we will buy more home goods and fewer imports.”

    Common Sense John. The development of our Internal Market is key to the Brexit economy. We have been dependent on Imports for too long leading to a crash in manufacturing and Agriculture. We need to rebalance the economy in favour of Manufacturing and Agriculture and supply our own market. That should be the plan.

  67. stred
    Posted July 4, 2016 at 8:49 am | Permalink

    Now we have a Bishop and a Rabbi telling us that they have to speak out against the hate crime nutters- as NOBODY ELSE IS! In fact everyone on the Leave side has condemned these morons and the amount of abuse is small. At least the Muslim preacher they had on talked sense and said the accusations of hate against Leavers was unfortunate. 9.45 Victoria.

  68. stred
    Posted July 5, 2016 at 10:46 am | Permalink

    Another laugh from the BBC and Carney. He is taking action to overcome the damage caused by Brexit. The drop in the commercial property and housing borrowing demand is one reason. Unfortunately, he said that commercial property has been falling for 3 months and the Chancellor has decided to put the skids under BTl, with the result that many landlords wil have to sell and few will wish to invest.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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