UK Data Refutes Media Gloom: There Has Been No Brexit Economic Disaster

August 20th, 2016 11:58 PM

After 52 percent of voters in Great Britain cast their ballots in favor of leaving the European Union on June 23, financial commentators around the world, particularly in the U.S., predicted ugly economic tidings for the UK.

People who swallowed the gloom and doom whole must have been especially surprised early Friday morning when Bloomberg News published a piece headlined "Pro-Leave Economists Can Smell Vindication." Keeping hope for bad news alive, the caption underneath the piece's accompanying video reads, "Brexit Effect Missing So Far From U.K. Economic Data." Sorry, guys, it isn't just that bad news is missing. It's that the news out of the UK has been very good — "unexpectedly," of course.

After the "Brexit" vote, most of the establishment press's talking-head "experts" predicted that the UK economy would significantly suffer.

The following Sunday and Monday, two particularly noteworthy commentators piled on during CBS News programs.

On that Sunday's Face the Nation, Max 2015 Hillary Clinton contributor Mark Zandi of Moody's Analytics, whom I have never seen disclose his obvious lack of objectivity in appearance, predicted that the UK economy would be "go down the rabbit hole," and that the EU was in a better position than a going-independent UK to "digest" the impact. As seen here, it's far closer to the truth that the UK has been outperforming and in a sense propping up the EU for decades. It's a mystery why people believe that things will get worse in the UK once it leaves the purview of the command-and-control freaks and regulatory zealots at EU headquarters in Brussels.

The next morning on CBS This Morning, financial planner, investment advisor and Obama bundler (undisclosed, of course) Mellody Hobson claimed that "here (in the UK) they're acting as if a recession is a foregone conclusion." Betraying a breathtaking ignorance of history and governance, Hobson also claimed that the EU is like "the United States of Europe," and that "It came into being after World War II." The European Union did not officially exist until 1993.

A Wednesday Investor's Business Daily editorial detailed much of what has actually happened in the UK since the Brexit vote — and it has been good (links are in original; bolds are mine throughout this post):

Brexit Fears Weren't Overblown -- They Were Flat-Out Wrong

It's hard to remember, but in the run-up and immediate aftermath of Britain's Brexit vote on June 23, the prophets of doom were everywhere. They predicted everything from an end to London as a financial capital to the meltdown of the British economy to a disaster for the U.S. Sorry, didn't happen.

Yes, here in the U.S. the stock market sold off immediately after Brexit, just as the doom-and-gloomers predicted. But then something funny happened: The markets snapped smartly back, with the benchmark S&P 500 Index up almost 3% since the day of the vote.

As for Britain, the predicted disaster never occurred. As Britain's Express wrote in a Wednesday headline: "Remainers were WRONG! Wages up and unemployment down as Brexit Britain booms".

That's no exaggeration. One of the great fears was that not only would Brexit be bad for the economy after the vote, but would materially weaken it even before the vote was held by undermining investor and consumer confidence.

Didn't happen. The online Express, citing new government data, reports that unemployment plunged 52,000 between April and June, leaving the unemployment rate at 4.9% -- the lowest level since 2005. The total employment rate now stands at 74.5% of the population -- the highest ever. Meanwhile, the number of unemployment claims dropped 8,600 in July -- the month after the Brexit vote -- to 768,600, the first decline since February.

Oh yes, and workers' average earnings jumped 2.4% in the first six months of the year, showing that if businesses were worried about Brexit, it sure wasn't showing in how much they were paying workers.

There's more, as the Bloomberg item mentioned in this post's second paragraph noted (links are in original):

This week’s raft of U.K. economic data put a new spring in the step of those who believe (or hope) that Brexit will simply mean Brexit, not national calamity. 

The figures show that British consumers are on their biggest summer spending spree in 14 years and that the labor market is remaining resilient despite the Brexit vote. That’s put a spring in the step of economists who backed the “Leave” campaign and deride the doom-laden forecasts as “Project Fear.”

“I don’t smell any fear,” said Patrick Minford, a professor at Cardiff University and co-chairman of the Economists for Brexit campaign group. “What I smell is people going about their business looking perfectly calm. Their incomes are growing, employment is at an all-time high, unemployment is at a low, there’s loads of credit available. What’s not to like?”

The "spending spree" mentioned in the second excerpted paragraph relates to news, as carried at the Associated Press, that "Retail spending in Britain rose by an unexpectedly robust 1.4 percent in July, the month after the U.K. voted to leave the European Union," defying "Economists (who) had been expecting a far more moderate month-on-month rise of 0.1 percent." 

The U-word ("unexpectedly"), in addition to serially describing economic disappointments under leftist regimes, also seems to show up quite frequently when events the left doesn't like lead to the opposite of the disasters they predicted.

With their forecasts of economic calamity failing, Brexit opponents are, at least for now, reduced to irresponsibly contending that "racists are using the country's vote to leave the European Union to legitimize their hatred," while sore-loser and fragile-flower Remain voters are flooding psychiatrists' offices with cases of — not kidding — "Brexit anxiety."

Of course, two months of good results doesn't settle matters. But they ought to at least cause the "expert" bloviators to reconsider automatically issuing agenda-driven, disaster-predicting pronouncements the next time something they oppose occurs.

The bet here is that they won't.

Cross-posted at