The U.K.’s decision to pull itself kicking and screaming from the European Union was predicted to wreak economic havoc. So far that prediction is coming true.
Some of the lowest exchange rates in recent memory are currently being offered for Sterling, which is bad news if you’re holiday bound, better if you want to sell something to buyers outside the U.K. The alleged damage goes much further, though. Already.
British households are considerably more pessimistic about both short and long term economic forecasts following Brexit than they were before the vote. The GfK Consumer Confidence barometer suffered its steepest one month decline in 26 years. Every category involved in the most recent study showed a decline, overall from -1 in June to -12 in July. Mortgage approval rates reveal a similar picture. Even if all that means nothing you can probably ascertain it’s not good news.
But how much is pre-emptive, and how much is logically reactive? Markets are only as strong as the faith investors have in them- business success of any kind boils down to knowing which hunches to follow. In the turmoil of the 2007-8 financial crash, many began blaming the likes of BBC’s Robert Peston for perpetual gloomy stories that turned worst case scenarios into realities. And that’s just one example, whether blame was founded or not.
Cutting to the chase then, perhaps a little too late, we’ve seen in the past how the public and businesses can talk themselves into more financial uncertainty than is actually necessary. We turn negative news into self fulfilling prophecies by making purchasing decisions based on doubts, rather than desires. And once this starts to happen, thanks to the cyclical nature of economics, it can be pretty hard to buck the trend.
According to research by Markettiers, the U.K. public has already had enough of this onslaught of pessimism.
66% of people want more focus on non-Brexit and political stories in the news
60% of people are bored with the sheer volume of Brexit and politics in the news
77% of people want to see more stories in the media they feel are relevant to them
80% of people feel the media is focused on negative stories
Clearly we need to be sensible- things are far less stable in Britain than they have been for many years. Being aware of that can pay dividends. But it’s also vital that we carry on living life as normal, spending money as we always have, both as consumers and businesses. After all, the last thing anyone needs- not least the Bank of England- is to see the amount of money in circulation begin to decline.