Across a Brexit battleground scarred by posturing and the pursuit of personal ambition, the economic consequences are often ignored or politicised.
True, GDP forecasts are less gripping than the human dramas playing out in Westminster. But this isn’t just for the geeks – it is our jobs, incomes, savings and investments that are at stake.
Keep that in mind this week when Bank of England governor Mark Carney delivers his most comprehensive view on what leaving the EU means for the banking system, financial stability and the economy.
Brexit: Mark Carney will present its views to the Commons Treasury committee on Thursday
The Government is also to publish its economic forecasts comparing the Prime Minister’s Brexit deal with the alternatives of staying in the EU or no deal.
Both sides have bandied economic statistics about since the referendum to reinforce their preconceived ideas, often based on very superficial understanding. One organisation that has tried to present dispassionate, evidence-based analysis is the Bank.
Carney will present its views to the Commons Treasury committee on Thursday, including a worst-case scenario of a no-deal Brexit with no transition period, and a calmer scenario based on the withdrawal agreement.
The Bank has already warned that a cliff-edge Brexit could hit growth and lead to a fall in the pound, although some observers believe a no-deal has already been ‘priced in’, so this will not happen. This will come a day after the Bank publishes its latest financial stability report setting out the effect a disorderly Brexit could have on the banking system.
Carney will also reveal the results of the latest doomsday tests on the banking system, designed to see whether banks are resilient enough to withstand shocks much worse than a no-deal Brexit. The good news is that they are all expected to pass.
‘Deeply politicised’: Brexiteer Jacob Rees-Mogg has made no secret of his distaste for Carney
One of the quiet achievements of the past decade is that lenders are far stronger than before the financial crisis, tripling their capital strength. So whatever happens when we leave the EU, our banks should be able to support firms and individuals.
There are, however, risks to the financial services industry, including policies worth billions of pounds sold by EU insurers to UK consumers and vice versa, which firms may not be able to service after Brexit unless an agreement is reached. The Bank has said this could affect 10million Britons and involve liabilities of £27billion.
On top of that, there are tens of trillions of pounds of complex financial contracts known as derivatives that may not be able to be serviced after Brexit – unless the EU and the UK agree to deal with them.
It is in everyone’s interest that these issues are resolved.
The Bank’s interventions in the Brexit debate have been controversial.
Arch-Brexiteer Jacob Rees-Mogg has made no secret of his distaste for Carney, whom he sees as ‘deeply politicised’. But an independent Bank would be derelict in its duty not to spell out the impact it believes Brexit could have on the economy.
Carney’s pronouncements are based on the deep pools of information and expertise at his fingertips, including intelligence from the Bank’s agents in all parts of the country, who are in constant touch with businesses. This makes it uniquely placed to know how firms feel about Brexit and its effects.
Whether or not people like Carney’s views, they are serious and well informed.
Too often, politicians seem blithely unaware of the economic impact of their decisions in the world outside Westminster. Time to stop talking and listen.