No, In Fact People Did Vote To Make Themselves Poorer

Within weeks and in some cases within days of the European referendum Brexit people were crowing about the fact that the economy was booming, which says more about their understanding of time scales than much else.

Mark Carney and The Bank Of England, printed money, flooded the High Street banks with it, cut the almost impossible to cut interest rates further and encouraged lending and borrowing. Entirely unnecessarily in my view, since 52% of the population, buoyed by euphoria would have gone on a spending spree anyway and those who foresaw inflation might well have brought forward some purchases they would have made anyway.

So where are we now? The latest Economic and Construction Market Report shows another decline in construction in May, retail sales are down by 1.2%, inflation is up to 2.9%, there is a hung Parliament scrabbling still, as I write this, to do a deal with one side of the Irish conflict to prop themselves up and Philip Hammond's speech seems at odds with the views of the PM.

Mark Carney has signalled that he's scared to raise interest rates to prop up the currency, because of the high levels of household and personal debt. That despite several of his colleagues voting to raise rates already. The National Debt is vast but people only talk about the deficit because that's less scary. The Labour Party talk about the world's second most indebted country as wealthy and there is a state of crisis in education, prisons, policing, social care and other parts of the NHS.

Meanwhile politicians talk about what they want from Brexit; what they want doesn't matter one iota but what they get certainly does. People, we are told by Chancellor Hammond, did not vote in the referendum to make themselves poorer, but actually they did.

Some voted to make themselves poorer because they didn't believe there would be consequences. Some were so anti European they voted for Brexit knowing damn well they'd be worse off but didn't care. Some like many in Wales started screaming that they didn't want to lose European grants and subsidies the morning after the vote!

The Yanks have started raising interest rates and have signalled that there are more rate rises to come on their side of the pond. The dollar isn't likely to fall in relation to the pound on that basis. Our currency is now undervalued, but not by so very much I suppose because our economy will bomb. Why do I say that? Well, people already in debt and facing inflation with no prospect of wage increases will cut back on their spending.

The Tories brag about thousands of new jobs, but most are low paid, or part time, or zero hours contracts or a combination. With our currency falling in value shares have risen, largely because UK companies paid in dollars get more pounds in effect. The idea of investing is to buy when prices are low and sell when they are high, not that brilliant Chancellor Gordon Brown quite grasped that. Mr Goldfinger.

When the currency is weak, shares are artificially high, risks are high and volatility and political uncertainty reign, then many investors simply don't invest, they wait and see. So, if people aren't spending and people aren't investing and trade with Europe is at risk expect to see the super strong economy we're constantly told we have, despite the enormous and ever rising national debt start to trip and stumble.

Oh yes, people voted to make themselves poorer alright.

By Malcolm I'd rather be an optimist Snook