Tag Archives: Project Fear

So, the UK is still growing quite well, despite the country voting to leave the European Union back in June. Our economy expanded, we learnt last week, by 0.5pc between July and September compared to the quarter before. That amounts to a buoyant 2.3pc annual growth rate. So does that mean everything in the UK garden is now rosy? And were Brexiteer-economists like me right? The answers are a definite “no”, and “maybe”.

What is now clear, and accepted by all but the most ardent anti-Brexit campaigners, is that the slew of pre-referendum scare stories warning of a “sudden and considerable fall” in economic activity if we backed Leave just over four months ago were nonsense.

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“To retain credibility, it’s important central banks don’t claim to know more than they in fact do”. So said Former Bank of England Governor Baron (Mervyn) King in his recently published book, The End of Alchemy. Does King’s successor agree? In August 2013, a freshly-appointed Mark Carney, under his new “forward guidance” policy, declared the Bank would finally raise interest rates when UK unemployment, then 7.8pc, fell below 7pc.

Almost three years on, after faster than expected growth, unemployment has fallen to 5.1pc, yet the bank rate remain at 0.5pc – where its been since being slashed in the aftermath of the 2008 Lehman Brothers collapse.

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“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.

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