Leading pro-Brexit economist Gerard Lyons says the vote to leave the European Union will not send the UK economy into recession.
Lyons (pictured), who is chief economic strategist at Netwealth and was previously economic adviser to Boris Johnson, told Wealth Manager that ‘people don’t need to be fearful’.
He points to low interest rates and weak sterling as positives for the economy, which has a solid backstop in the Bank of England. He said the sharp sell-off across markets was inevitable, but he is ‘pleased’ with the outcome and remains ‘optimistic’ about the economic outlook, believing the economic benefits will be seen ‘immediately’ as the UK ‘positions itself globally’.
‘I don’t think anyone should be shocked or surprised by the initial market reaction. After four months of campaigning by the prime minister and chancellor of exchequer about the dangers of leaving, it is no surprise,’ Lyons said.
‘But people don’t need to be fearful. Markets overshoot and the Bank of England’s comments that it will do whatever necessary are very positive and it made sense to underline that the financial sector is very secure. It is also clear there will be no aggressive intervention if the market pushes the pound lower.’ 
Lyons admits that he was surprised that prime minister David Cameron resigned this morning and will stand down at the next Conservative party conference in October - a move which creates additional uncertainty. However, this will only be in the near-term as a new leadership team is put together. 
‘I think what we really need is a period of political and policy stability, and now we have a period of political uncertainty. At least Article 50 [the trigger to start the negotiations on terms of exit] does not have to be invoked immediately,’ he said. 
‘Clearly the leave side here is not a government in waiting and that creates a challenge. We do need policy clarity in the near-term.’
When the new Conservative leadership is in place and invokes Article 50, the next challenge will be defining the shape of the negotiations and policy response.
‘The government has to decide what levers we want to pull and do we cut tariffs? During the Article 50 period nothing changes for a couple of years,’ he said.
Lyons added that EU tariffs are ‘quite low on most things’ and he said Germany has made clear that it will not want to place the 10% levy on auto sales, as it would be damaging to its domestic economy, for example.
He also blamed the EU in part for the UK’s decision to exit, saying that when Cameron tried to renegotiate membership terms, he ‘asked for little and got less’.
‘The EU seems unwilling to reform and in the past its response has been to not address problems and instead talk about closer integration,’ he said.
‘When people ask about whether the EU will survive, I ask the question a different way. Will all of the countries in the eurozone still be there?’
Lyons' positive outlook is in stark contrast to the views of GaveKal co-founder Anatole Kaletsky, who earlier today warned that the Brexit vote could spark a global meltdown.