Monday , June 17 2024

“Crashing out” of the EU – how big a crash?

The Bank of England published this graph showing the effect of leaving the EU with no deal in its report: EU withdrawal scenarios and monetary and financial stability:

The graph is designed to look as scary as possible.  However, when we read the notes on page 53 we find this little gem:

“As economic conditions deteriorate, net migration falls from a net inflow of 250,000 per year to a net outflow of 100,000 people per year.”

This is a massive change in population growth. Almost all UK population growth is due to migration and the children of migrants.  The reduction in migration will reduce the UK population growth by 0.56% per year directly, without allowing for children born to migrants.  This is excellent news because it means that the Bank’s figures imply a GDP per head that is rising rapidly after 2020:

So according to the Bank of England figures we will all get a lot richer in the late 2020s if a no deal, no transition Brexit happens.It may well solve the UK’s chronic productivity problem as GDP per head increases.

Surely it is worth suffering half the set back that we experienced in the banking crisis to enter a period of subsequent prosperity?  These are the Bank’s figures so anyone who is tempted to Remain in the EU should respect them.

The Bank of England confuses population growth with useful economic growth.  If we fall for this there is no hope of ever controlling population growth and preserving the British countryside and environment:

I would also like affordable housing for my kids.

A “no deal” Brexit offers:

Higher wages
Much lower migration
Higher productivity
Preserving the countryside
Lower house prices relative to wages

All for a short period of low growth in 2020. The Bank has used statistics to bamboozle the population, don’t let them get away with it.

A WTO Brexit with a managed transition is probably better in the short term. It has few real consequences economically – see Plan B for Brexit and Bank of England gives green light for WTO Brexit.

This post was originally published by the author on his personal blog:

About John Sydenham

Dr John Sydenham has worked in International Pharmaceuticals and for one of the "big four" International Consultancies. He ran a successful company for 15 years and after selling the company devotes his time to travel, science, black labradors and freedom.

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