Brexiters continually dismissed claims that the UK economy would suffer from a vote to leave the EU as establishment "scaremongering". Now we will see which side was right.
It was frequently noted during the referendum campaign that a "striking" majority of financial experts were forecasting dire consequences from a Leave victory.
Among them was Nouriel Roubini, nicknamed "Dr Doom" for predicting the 2008 financial crash. He warned of a post-Brexit recession, while Bank of England governor Mark Carney also said a “technical recession”, meaning at least two-quarters of falling growth, was possible.
The Financial Times summarises a few of the other headline estimations:
• Open Europe predicted a hit of less than one per cent, as “questionably large potential savings from a bonfire of regulation, including scrapping some workers’ rights” offset a protectionist hit;
• Oxford Economics gave a range of losses of as little as 0.1 per cent and as much as 3.9 per cent;
• but also argued the lower end of this was only likely if we stayed in the single market and kept free movement laws,
• and the Treasury and the independent Centre for Economic Performance estimated GDP could be ten per cent lower by 2030.
Already, ratings agency Standard & Poor’s has told The Independent that the UK’s top credit rating is “untenable” in the wake of the vote and the uncertainty it brings. This may not worry people much: S&P's peers at Fitch and Moody’s had put the country down a notch back in 2013.
But there are also those saying there will be a positive economic effect after the poll result.
The Centre for Economic and Business Research told the Daily Telegraph yesterday that at least a third of the business investment held over during the campaign should arrive now that there is a clear path forward.
This will create a “mini-boom”, it said, although of a lower order of magnitude than if the UK had voted to remain in the EU.
Elsewhere, the Economists for Brexit group, led by Margaret Thatcher’s former economic adviser, Patrick Minford, has consistently predicted a Brexit boost for the economy, based on the removal of trade barriers and a weaker pound helping exporters.
Sterling recorded its biggest ever one-day fall against the dollar this morning, dropping to a 30-year low of $1.34. This will indeed make exporters’ wares cheaper, but it will also probably increase the cost of imports and so could hit the man in the street in the pocket.