Time for Brexit doomsayers to revise their view

London

THE overdone pessimism whipped up by a very political Treasury before the UK's referendum on European Union (EU) membership was based on a short-term shock to confidence. It said that if the public dared to vote for Leave, the loss of confidence would be rapidly visible. House prices would tumble and housing transactions would decline. Interest rates would go up, making mortgages more expensive. Spending and output would fall as consumers reined in discretionary purchases. Unemployment would rise as firms cut back and cancel investment programmes.

The good news is that, nine weeks after the vote, when the UK should have felt the worst of the immediate shock, none of this has come to pass. The only correct forecast was that the pound sterling would fall slightly. Contrary to the gloomy forecasts, shares have risen after an initial petulant mark-down. Government bonds have soared, including before Bank of England's (BOE) Aug 4 intervention, cutting interest rates to all-time lows.