No need for alarm after Brexit… future is positive says economic expert Gerard Lyons
Financial worry is the immediate concern after Britain voted out of the EU but the nation's mood should be hopeful
DON’T panic. In fact the first thing you should do is congratulate yourself.
A vote for Brexit is a vote for Britain. It means the country has ignored the pessimists.
VOLATILE MARKETS
Don’t be shocked by the fall in the stock market and the Pound’s collapse.
Yesterday the FTSE 100 started the day with a seven per cent drop — by close of business it had recovered more than half that.
Markets expected Remain to win. When it became clear Leave would win, traders became pessimistic.
After all the dire warnings of Project Fear it should be no surprise the financial markets behaved the way they did.
Having a lame duck Prime Minister for three months doesn’t help but it does buy us three months to work out our tactics before we sit down to negotiate with the Europeans.
We should be positive about the future.
POLICY BOOST
On Friday morning, the Bank of England Governor reassured the markets. This allowed the stock market to recover. There were two things that were important.
First, this is not a repeat of the 2008 financial crisis. Then the financial system almost collapsed. Not now.
Second, the Bank of England will do whatever is needed to ensure stability and avoid a credit crunch.
The weaker Pound will make imports more expensive, but inflation will likely stay low. Interest rates will stay low and may fall further.
NEXT STEPS
Leaving the EU is like leaving a bad relationship. We want to be grown up and professional.
But let’s not forget they didn’t show much enthusiasm to keep us in.
It is only after a new PM is chosen that we can start the legal process for leaving called Article 50. It takes at least two years.
We need to decide how to better spend the money we currently send to Brussels. Then we have to agree a sensible migration policy.
UPLIFTING VISION
What will happen to the economy? If there is a loss of confidence, even people and firms with cash to spend or invest hold off from doing so.
There needs to a really good team talk to the nation and to the world.
The PM and Chancellor spent months telling us all the problems if we left. Now we need a different message.
David Cameron once said to Tony Blair “You were the future once”, signalling the changing of the guard.
That message needs to go to the British people.
The EU was the future once. But no more.