Thursday, 16 June 2016

Pre-EU Referendum Fallout & What It Reveals

Without a crystal ball, it is not possible to predict, what the true consequences of a Brexit will be. A belief in the return to the principles which forged the British Empire may be the driving force behind the advocates of Brexit. Whether or not these principles can be re-instated in a nation that has changed so greatly since the 2 World Wars is a moot point and it must be asked whether it is wise to try to turn the Clock of History backwards.

We can make some observations, based upon specific facts that are already the consequence (the fallout) generated following the Referendum announcement, and perhaps use these facts to make intelligent extrapolations about the possible repercussions of Brexit.

It is generally known that firstly, there has been substantial capital flight from the UK and that such a flight of capital out of the country cannot be as a result of the maintenance of the status quo, so it must be because of the Fear of Brexit. Secondly, there is evidence that London firms are not taking on young graduates since February 2016 as they await the outcome of the Referendum. Once again, it is illogical to assume this reluctance is due to anything else other than the Fear of Brexit. Thirdly, the value of sterling is "wobbling".

These three obvious facts lead us to the natural conclusion that Common Sense would advocate "better a known devil (the EU) than an unknown devil (Brexit)" and a deliberate leap into further uncertainty in already uncertain times isn't wise. We cannot escape the observation that the Fear of Brexit has already had negative repercussions even before the nation has voted. If in the short-term, Fear is spooking markets, it is reasonable to extrapolate that in the long term, the Reality of Brexit will generate even greater uncertainty than we have already seen, along with all its attendant negative repercussions, further intensified.