The future for Britain: neither paradise nor perdition

THERE were many projections before the UK referendum on the possible economic effects of staying in or leaving the European Union (EU). It was a confused, angry debate. Had we had a royal commission rather than a referendum, the UK would have had a more balanced, nuanced account of the costs and benefits.

Now that the political decision has been made, we may reopen the question of the effects, with no need for exaggeration or endless doom-mongering. We can ignore the miracles promised by the Brexiteers or the dire predictions of the Remainers. What counts is forecasting the next 27 months or so when the UK will stay part of the EU.

In the 1960s and early 1970s, the promise was that joining the Common Market would transform Britain's stagnant economy. As it happened, Margaret Thatcher's reforms, not Community membership, changed the UK into a growth machine. Nearly five decades later, the euro area is stagnating, while the UK is managing modest but still higher growth. Clearly, making long-run forecasts of paradise or perdition is a rash act.