Let's get some things straight about Brexit

5 July 2016, 15:00
Sherif Hasan

It's time to clarify some things about Brexit

Going by some of the comments there have been about Brexit you'd think the UK will resemble a world akin to something from the Mad Max films.

Let's be straight about a few things.

No one is saying there won't be any economic fallout. There might well be steep drop in the economy.

However, the UK is not Greece. We're not looking into the abyss. We won't need rescuing or to be propped up by billions and billions of euros. And, no offence to our Greek friends, we put a damn sight more into the European economy than they do. So comparing one country that we've all poured billions into, that actually provides very little to Europe overall, that Europe bent over backwards to save as a matter of pride rather than for any useful reason, I find it hard to understand that Europe will try and cut us adrift in such a way that will cost them more than it will cost us.

Financially the UK is secure. Yes there will be people worrying but when isn't there? We're not in a credit crunch or heading towards one. The UK and the globe has never seen so much liquidity. We're flooded with it. The BOE is going into overdrive in making sure the world knows that it's ready to act. It's planning for the worst and that's awesome. If only we and many other countries had done the same before the GFC we wouldn't be having this conversation. Planning for the worst is part of my make up. I do it in most things, especially trading. I teach it in our education courses. If you've planned for the worst then the upside should take care of itself, so I couldn't be happier that the BOE is doing the same. If the government also does the same I'll be overjoyed (after picking myself up off the floor from the shock). The only downside to the BOE laying it out is that it could cause some to take it too literally that the UK is heading towards disaster. More fool them.

The UK economic recovery has been domestically driven since 2012/13. I've written about it umpteen times that all we've needed is a pick up in exports to help us take the next step. The pound falling should certainly help that but even if it doesn't, the domestic economy has been resilient. Yes we have seen weakness over the last few months but there's still enough here to tide us over.

As with any big global event, there's always those that will proclaim an apocalypse. Greece/Spain/Italy/Portugal will bring down the Eurozone, the euro will go to parity. You name it there's always a call for the end of the world but you know what, how often does that happen? Even if it did/does happen so what? It's not as if we could do anything about it anyway.

I don't know exactly how the Brexit thing will turn out but what I do know is it won't be as bad as many make out. There's too much protection in place to let it. The UK isn't heading for it's version of GFC 2.0. It could well get stinky for a while but we'll come out the other side the same as always, and if not, I can always move to Europe ;-)

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