"Vote leave. Get Remain." That was the headline on a blog I wrote at moneyweek.com just before the UK referendum in June 2016. One thing you might expect if you vote for Brexit, I said, was an awful lot of negotiation followed by "a joyous announcement that the EU has finally seriously reformed" followed by another referendum "in two to three years". After the vote I was even less certain that I would ever see what I voted for.
The next blog on the matter, only a few days after the vote, noted that voting for Brexit was only the start. We also needed to elect a government capable of delivering it. And given that "finding a way to make sure that Brexit means anything but Brexit is all the rage", that bit was looking iffy.
So here we are, two years on, and, in the wake of poor Theresa May's mammoth defeat on her deal nothing much has changed. All the options that were on the table back then are spoken about as if they are still on the table now: a bespoke deal, a second referendum, another general election, suspending Article 50 the 2016 equivalent of this was delaying its invocation and a return to discussing an associate membership of some kind.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It's all a bit Groundhog Day. It's also allowing every MP and commentator in the UK to suddenly become their own little king of wishful thinking. Ardent leavers, egged on by the president of the European Council, Donald Tusk ("the risk of a disorderly Brexit has increased"), reckon we are getting closer to a "clean Brexit" (that'll be "crashing out" to remainers); middle-way leavers are sure that the EU is on its way back to the table (the German foreign minister suggested that "further talks" are possible); passionate remainers reckon we are getting closer to a second referendum and hence to no Brexit; and moderate remainers are sure that we are nearly at the point where leaving the EU will end up being much like staying in the EU. "The tide is ebbing on a hard Brexit," one cabinet minister told the papers on Wednesday. "The longer this goes on the softer Brexit will be."
The markets look rather like they agree with the minister: the pound, the UK ten-year gilt yield or our equity markets moved much on Wednesday.
We are as guilty of wishful thinking here at MoneyWeek as everyone else is (I suspect my original forecast of leave looking much like remain might turn out to be more valid than I would like, but not all of my colleagues agree with me).
However, here are a few things we do all agree on. First, whatever the outcome, the risks of even short-term disruption to our economy and those of the EU have fallen. As Matthew Lynn pointed out a few weeks ago, the more you prepare for something the less bad it is. Everyone is now preparing for a no-deal/clean Brexit/crash out. So the risks connected to it are being reduced every day.
And second, given this slow fall in the overall level of Brexit risk, UK equities are still too cheap. See our cover story, for some thoughts on what you might do about that. As Neil Collins points out in the Financial Times, when the current sense of crisis passes (and they usually do), "the turn could be as dramatic as the fall".
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
-
Why we need to get a grip on our governmentEditor's letter Our government is trying to do too much, enacting policies that are destructive to the private sector. It needs to drop the the feel-good nonsense and create policies that lead to long-term wealth, says Merryn Somerset Webb.
