Jim O’Neil, former chief economist at Goldman Sachs, former treasury minister recently admitted that the UK economy is set to perform much better than he and other remainers expected - and he is immediately greeted with a fanfare of told you so, and the people’s me behind the fanfare miss the point.
“Top Remainer admits UK well-placed to benefit from Brexit thanks to global trade growth”, headlined one publication.
But that is not what is being said, at all.
Jim O’Neil is an economic heavyweight- he it was who came up with the aconym BRIC, to describe the big four emerging markets: Brazil, Russia, India and China. He is also famous as a Manchester United supporter, showing that even former Goldman Sachs employees are prone to errors of judgement - ha,ha.
But Mr O’Neil was also a strong remainer. And recently he admitted to the BBC that his prognosis for the UK economy was wrong, he even admitted to embarrassment over it.
Asked if he and other forecasters were too busy, he said: “I'm almost embarrassed to accept that it might sound like that.”
What he was not saying was that Brexit was not having a negative effect on the UK economy. Now you may or may not agree with him, you may think that Brexit will prove to be good news, all round. You may or may not be right, but that is not what this article is about: it’s about what remainers such as Jim O’Neil think, and how Brexit supporters interpret his thoughts.
In fact Mr O’Neil said: “Of course in principle I share the views of many that Brexit is a really weird thing for the UK.”
What he was acknowledging is that the global economy is strong. The evidence to support this is becoming undeniable, the IMF, for example has just upgraded its forecast for the global economy.
It would be odd indeed if the global economy, and the developed world in particular grew at the fastest rate in years, while the UK descended into crisis. Now that would be weird.
But what is undeniable is the UK is currently one of the laggards in the global economic recovery. This may or may not be due to Brexit, it may or may not a temporary problem, but the facts are clear: the global economy is in its best shape for years. Some of this is rubbing off on the UK, as you would expect, but that dies not mean that Brexit doubters are being disproved. And the question to which we may never have a definitive answer is what would have happened if the UK had voted Remain. There is a good chance, however, that if that had happened, the pound would not have declined in 2016, hitting real wages in 2017, and investment would have risen sharply, and rather than being one of the laggers in the global economic recovery, the UK would have Ben in the vanguard.
