It is almost an impossible decision to make: Would you rather have prosperity or freedom? The reason it is hard to decide is that often prosperity gives a freedom in and of itself, the freedom of choice. The less prosperity a nation has, the more limited the options. The recent UK decision has been to delay the Article 50 extension until October as Britain buys more time to try and make this decision.
The reasons for an UK exit out of the EU were complex. I agree with the view that the EU exit vote, was first and foremost, a protest vote. Post 2008 the British electorate finally felt they had a chance to vent their dissatisfaction with the status quo. Many people were and still are financially struggling, so a David Cameron urging people to ensure stability and prosperity by remaining in the EU, provided the perfect time to register dissent. The idea is summed up well by the novel by Roald Dahl;, James and the Giant Peach. There is a part in the plot when they are about to embark on a journey. Where should they go? The answer was simple, ‘anywhere but here’. This sums up, in my view, the Brexit situation. It wasn’t primarily about immigration (although it clearly is for some), or finances, it was about change. For many people the status quo was not working and maybe a shift in the landscape would change things up. After all, we will take anywhere else but here…
However, no-one wants to be in a worse financial situation and the narrative about a disastrous ‘no deal’ brexit has played into that fear. If the UK had been able to have a more confident footing into the Brexit negotiations, maybe the EU would have more readily found a way of dealing with the sticking points. As it is we now have the following scenario
- More Brexit stockpiling liable to impact the UK economy with the ‘bull whip’ effect. See Justin’s helpful explanation here
- More slowdown in UK investment as companies avoid uncertainty
- Medium term slow down for UK economy
We are now looking at a prolonged Brexit period and the problem with putting off the decision once is that it is easier to put if off again and again. At least UK data will take a more central role for the next few weeks, subject of course, to some major Brexit related news.