- Written by David Yaffe
The vote by a small majority, 51.9% to 48.1%, to take Britain out of the European Union (EU) will have historic consequences for the trajectory of British imperialism, particularly if, as new Prime Minister, Theresa May, ruefully insists ‘Brexit means Brexit’. However, more than a month after the EU referendum vote it remains unclear what Brexit actually means and abundantly clear that next to no contingency planning by the Cameron government or the Brexit camp was in hand to deal with it. After the referendum result was announced, the leader of the Leave campaign, Boris Johnson, somewhat horrified by its totally unexpected outcome, said that there was ‘no need for haste’ to start exit negotiations with the EU. And May has made it clear that she will not invoke the EU’s Article 50 clause this year, which is the pre-condition for starting formal exit negotiations with the EU.1 David Yaffe reports.
Before the referendum, the IMF laid out a bleak scenario for Britain’s economy should the British people vote to leave the EU. It foresaw a ‘negative and substantial’ hit to the British economy, permanently lower incomes and the relocation of financial services and jobs from London and other UK financial centres to European cities such as Frankfurt and Paris. This prognosis looks almost certain to be borne out over the coming months and years. The immediate aftermath of the vote to leave saw $2 trillion wiped off global stock markets, with the pound falling to its lowest level against the dollar for 30 years. While some stockmarkets, including the FTSE 100, soon bounced back, other economic indicators pointed to serious problems ahead. Mark Carney, Governor of the Bank of England, took steps to calm the markets by releasing a further £150bn of lending by relaxing regulations on the banking sector. He indicated that he would consider cutting interest rates from their already record low level and use whatever monetary policy tools he still has available to support the British economy.