The City may be on a high but everyone is predicting a Brexit recession for Britain – so what’s happening to the economy?
While the FTSE is climbing after the vote to leave the European Union and is just shy of a 12-month high set in August 2015, some financial experts are warning of an economic storm gathering on the horizon.
The issue for the doomsayers is they really do not know what lies around the corner.
The country has gone through a tumultuous month following the referendum but a new Prime Minister is ensconced in Downing Street and everything seems to be firing on all cylinders.
Although pundits, including the august International Monetary Federation predict a Brexit downturn not only for the British economy, but the because of the impact uncoupling from Europe will have on the rest of the world.
The trouble is they have no real evidence on which to base these comments.
The referendum took place on June 23 and it’s barely a full month after the event.
Recent history has shown that if anything is for certain, it’s the inability of polls, pundits and experts to predict election results and how the economy will perform.
The signs are that Theresa May intends to relax the strict fiscal controls imposed by former Chancellor George Osborne, so even the current data which may indicate boom or bust may be worthless if the new man in the hot seat, Philipp Hammond, decides to roll in new policies.
All most of us can say is that we have pensions or investments linked to the Stock Market, they have risen since Brexit, instilling some confidence in the economy.
No predicting the future
The suspicion is the people shifting their money around the markets are speculators looking to cash in on any inauspicious news in the wake of the Brexit vote.
No doubt the money markets will continue to rise and fall at any hint of good or bad financial news, but it’s far too soon to worry.
Recession may be a blip on the radar that may never arrive.
European Central Bank president Mario Draghi thinks the same about how world events might affect the EU.
“It is very difficult to see how these geopolitical events will affect the euro zone. It’s very likely they will affect confidence, but it’s very hard to predict how they will affect things in the immediate future,” he said.