Plunging output. The FTSE in freefall. A financial collapse. Unemployment rising rapidly and trade falling off a cliff. At first glance, you might think that was an accurate description of the British economy, given the decisions that the Bank of England took this morning. After all, to cut interest rates to their lowest level in history, to re-launch quantitative easing, and to promise more action down the road, the economy must be in crisis, right?
Except, er, it isn’t really. While there are good reasons to argue that the decision to leave the European Union may well hurt the economy in the medium-term, there is no immediate emergency. In fact, the Bank has just taken a huge risk – of over-stimulating the economy, and creating a Brexit boom.
Ever since the referendum, the consensus among mainstream economists has been that it would cause a recession.
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