Take off the Brexit glasses

All too many commentators, reporters, market watchers and politicians are seeing everything through Brexit spectacles. The pound went up and down before Brexit, the economy grew and slowed before the vote, the Stock market rose and fell without a referendum. All the forces which moved markets and changed economies before still apply.

It is absurd to argue that sterlig rallied owing to extra uncertainty created by the recent legal judgement. Far more important was the Banks decision to back off from further rate cuts and more QE, real things which have a direct bearing on the value of the currency. It also helped that the Bank now sees that the economy will grow strongly this year, and will do better next year than it thought.

The recent fall in the Stock market has been put down to the possibility of a Trump win in the US election. Its the first time for months that a non Brexit reason has been given for a major change, Lets hope its a sign of better things to come in trying to explain why markets move.

Meanwhile as a few commentators have also noted, money growth continues at a rapid pace in the UK. This points to further strong growth next year, not to the EUro area style lower growth rate the Bank and others are now predicting.