Thursday, August 18, 2016
Economy: Brexit? What Brexit?
This morning we learned that the British retail surged 1.4% in best July performance since 2002 ( bloomberg). This is the first real (fundamental) economic data since the Brexit vote. Before we got just polls (PMI indices) which reflected the sentiment of pundits & media. It seems that the British care don`t care about Brexit and all the noise around it. And they don´t allow the pundits to scare them.
I reckon that the Brexit hysteria is unjustified. The British economy will be better off. Brussels has been gaining more and more power over the years - developing the EU Union into something like the defunct Soviet Union, a bundle of states ruled by a central government. The European Parliament and the EU committee, especially Jean-Claude Juncker, the President of the European Commission, treat the EU increasingly like a kingdom. Even after the Brexit decision they want to expand the power of the EU and demand more integration, meaning more power for Brussels ( spiegel.de).
UK will benefit from the exit because the country will be less regulated. A liberal (less regulated) England could attract companies and investors from all over the world. The economy blogger Scott Grannis writes "one of the very good things that could come of a Brexit: shaking off the Eurosklerosis that has held back growth in the Eurozone for many years" ( scottgrannis ).
There will be no British recession - the solid retail numbers are the first proof.