Mark Carney does not anymore believe that a no-deal Brexit will be cutting off 8 percent off our national wealth. He now thinks that the Gross domestic product hit will be a more uncertain 5.5 percent. One can only make a wild guess what he will be predicting next month. He should have given heed to the advice by Sam Goldwyn in the movie ‘mogul’ to not make predictions ever, especially concerning the future.
Cheap taunt? It could be. However, all this focus on whether we will be running out of fresh lettuce or medicine in Sainsbury’s is a huge exercise in joint displacement activity.
It is not focusing on the main issue. Surely, what matters is not what is about to happen in the coming 3 to 6 months but what will be happening in the long-term i.e. 5 or 10 years after Brexit. If we are to take as immense a step as ending terms with our closest trading partner for the last 40 years, for sure it is not what the debate must be about?
However, the introduction of small friction into frictionless trade will mean less of it. This would then mean that it is Economics 101. However, the fact which is not considered in economic models is the fact that people, as well as, businesses are very adaptable.
Indeed, the strength of the market economy lies in it, its pace in shifting resources, as well as, activity in meeting new realities, and the ability of firms, individuals, and investors of spotting threats and opportunities which the central banks and the governments don’t or cannot till well after the fact.
If the European Union is left by Britain without a deal on 31st October, there will unavoidably be a period of some confusion, as well as, chaos. However, this won’t be lasting forever. Between them, regulators and businesses will be settling on fresh arrangements.