Matthew Lynn Matthew Lynn

The real Brexit risk

There are plenty of signs that our economy is about to overheat. Remainer economists are unable to see them

issue 31 December 2016

At the Westfield shopping centre in east London, the queues started at 2 a.m. on Christmas night. In Wrexham, people started lining up at three, getting ready for a six o’clock start. In Edinburgh, hardy shoppers braved flurries of morning snow to make sure they were first in line for Boxing Day bargains. Whatever else is happening at the close of this year, British shoppers are as indefatigable as ever in their determination to keep spending.

Surely it wasn’t meant to be like this? In the wake of the vote to leave the EU back in June, mainstream economists were unanimous in their view that we would be in a recession by now. Unemployment would have soared, inflation would be out of control, investment would have evaporated, and the pound would have sunk below parity with both the euro and the dollar. The only thing we were meant to be doing in the sales was scavenging for old Mad Max DVDs, seeking tips on how to survive in the post–apocalyptic wasteland that our economy was about to become.

Instead, the script is very different.

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