Brexit scare stories are haunting the City

The cobwebs falling from the windows of pubs and shops in the City are much more likely to be Halloween decorations than an indication that businesses have abandoned the Square Mile in the wake of Brexit.

Sunday 30 October 2016 10:56pm
Christian May

The UK voted to leave the European Union on 23 June (Source: Getty)

Nevertheless, post-referendum scare stories hang thick in the air.

Project Fear takes on a new meaning at this time of year, but it seems as if the terrifying claims made ahead of the referendum will become folklore rather than fact.

The predictions of instant layoffs and a painful recession, based on official forecasts by the likes of the Treasury and the IMF, have been rendered absurd by economic reality.

Read more: After positive 3rd quarter GDP figures, has Project Fear been proved wrong?

Figures relating to everything from PMI to GDP defied the ghoulish soothsaying of the experts and in fact put the UK on course to be the fastest growing G7 economy this year.

This observation is not to jump on a populist bandwagon and declare the irrelevance of experts, rather it serves as a warning against the dangers of writing a scary script and trying to flog it in the non-fiction aisle.

Leaving aside matters of economic divination, plenty of spine-tingling tales are now doing the rounds about the future health of the City and of financial services more widely.

Headlines may scream that the banks are set to abandon London (before Christmas, according to some) but the reality is much more nuanced.

Work is going on behind the scenes to protect the City's interests and those of the wider European economy, too.

For while it may not make for a good ghost story, most people (including plenty of European officials and politicians) recognise that the EU doesn't stand to gain from dismembering London.

Quite the opposite, in fact.

Read more: Look to Twitter for why Britain's economy proved Project Fear wrong

The negotiations, such as they are at this stage, will be tense (and may make a good thriller one day) but they're unlikely to resemble a bloody slasher movie.

One other spectre hovering over the British economy of late has been the fate of Mark Carney, with weekend papers shrieking that he could announce his departure from the Bank this week.

That would have been a shocker, but reports emerging last night suggest he actually intends to extend his term. In other words, horror stories are often just... stories.

Happy Halloween.

http://www.cityam.com/252590/brexit-scare-stories-haunting-city