The measures announced by the Bank of England last Thursday to boost the British economy to counteract the possible repercussions of the Brexit vote, whilst the government marshals its strategies of how to extract the maximum benefits from the EU, will do very little to address the fundamental cause of uncertainty in the UK economy.
Until there is a distinctly clear sense of direction, which hasn’t emerged as yet, about how we are going to manage our relationship with the EU in the future, without jeopardising trade and investment links with Europe, the prospects of stability will remain a matter of great concern.
The government must take into account that negotiations with the EU are not going to be easy. In fact, Teresa May, although committed by the slim majority that she has in parliament and by the intransigence of some members of her party, has to tread very carefully. She cannot give any concession that would minimise the Brexit ‘concept’ held by a large element of Conservative hard-core anti-Europeans.
In the meantime, the government has many other levers to pull to negate the recent downturn in confidence, through infrastructure spending, reducing regulation and embarking on tax reforms to boost business and give more incentive to hardworking people by reducing at least the rate of VAT.
The near zero interest rates are not a remedy for the long haul. It is certainly a gimmick that will hurt pensioners and cause consternation, which we can do without. The nation has taken a bold step to go it alone through a referendum which was ill-conceived in the first place.
That has left us no choice except to comply with the decision of the majority and make it work, otherwise we risk a kind of relegation that Great Britain could never contemplate.