“No big institutions back Brexit,” a fellow journalist barked in my face at a drinks party last week. As I tried to respond, the point was repeated, this time more aggressively. “No big institutions want Brexit – not the CBI, the big banks or accountancy firms, they all think it’s mad”.
With less than seven weeks until the UK’s referendum on European Union membership, the rhetorical battle-lines are drawn. The main strategy of the government and broader Remain camp is “Project Fear” – scaring ordinary voters they’ll be thousands of pounds poorer each year if we leave. Such psychological bombardment – presenting self-serving and deeply dubious forecasts as “fact” – will continue all the way to Thursday 23rd June.
UK GDP grew by 0.4pc during the first three months of 2016, we learnt last week, down from 0.6pc the quarter before. “The threat of leaving the European Union is now weighing on our economy,” claimed Chancellor George Osborne.
The Bank of England is worried about “a fall in sterling due to fears of Brexit”, we’re repeatedly told, the latest Threadneedle Street intervention also warning of “a lower path for growth” if British voters have the audacity to leave the EU.
And if only “uncertainty” hadn’t been “heightened by the UK’s referendum on EU membership”, Janet Yellen opined last Wednesday, the mighty Federal Reserve might now be able to raise interest rates, helping the US central bank steer global markets away from dependence on emergency measures and back towards normality.
The global economy will grow by around 3pc this year, down from 4pc in 2011. The US should manage a 2pc expansion, while Britain and the eurozone will struggle. A West European recession, the UK included, now looks unavoidable. The emerging markets, meanwhile, will keep forging ahead during 2012. Even if China slows a bit, the world’s second-largest economy should expand by 8-9pc. The “big four” emerging markets – China, India, Russia and Brazil – now make up a quarter of the global economy. These “emerging giants” will account for the lion’s share of world growth in 2012, just as they did in each of the last three years.
Such countries aren’t insulated from the Western world’s sovereign debt debacle. Far from it. But with lower debts, much higher reserves, relatively stable banking systems, and trading ever more between themselves, the emerging markets will out-pace the “advanced industrialized nations” this year too.