The Brexit economy

The pound remains depressed but at €1.12 or thereabouts is where its been all year. Gold on the other hand is through the roof; oscillating at around £950/oz since the referendum three years ago, this Summer it soared to around £1,250 and is still today at around £1,200. The UK economy is still in robust shape, if not thriving, but clearly this cannot go on – the global slow-down and more importantly, investment and other key decisions by business that have been postponed time after time as Brexit drags on are taking their toll. Business and the economy need certainty more than anything; even the CBI, whose Remain stance on behalf of about 3% of UK businesses has been aggressive against Brexit, must admit that we need, as the Septics say, closure.

The Eurozone is in the doldrums and about to get worse. As the Telegraph reports, Cristine Lagarde, who narrowly escaped jail with her conviction for complicity in a fraud, takes up the Presidency of the ECB. She brings a unique brand of incompetence and poor judgement to the role. There may be some consolation for the feminists in that the grave errors she is about to make are about to be made by a woman, but few consolations for the rest of us. She’s not an economist she’s a schmoozer and cannot bring to the role the genius required to get the Eurozone out of intensive care -

They can do nothing about Brexit, they can do nothing about trade tensions, they cannot force Germany to loosen the fiscal purse strings, they have no answers to growing political instability, and they cannot force the pace of innovation and structural reform as Europe requires. Central banks have been reasonably effective in keeping the patient alive during the political paralysis of the last ten years, but they can provide no long term cure for the chronic nature of today’s economic ills.

Poor Sajid Javid’s spending review was lost in the Parliamentary noise, but I think he is making the right moves. Plenty to include in the Conservative election leaflets, anyway – but it was a budget for more than that. Unlike the dreadful turncoat Hammond, he’s actual budgeting for Brexit – and that’s a first.