So the arguments over Brexit are done and dusted for a generation. Really, Tony Blair?
The British economic debate is bewildering, marooned in a discourse in which the pivotal economic fact of 2022 is ignored. The chancellor and governor of the Bank of England will talk about the dangers of inflation, of the risk of a wage price spiral and the need for pay restraint – but never about the escalating sterling crisis and what lies behind it. Nor will the opposition lay into them for their vows of silence – equally anxious to avoid mentioning the dread word or its baleful economic impact.
But Brexit is not going away. It cannot be avoided. Last week, we learned that in the first three months of this year Britain’s current account deficit was the worst since records began in 1955. It stood at a stunning 8.3% of GDP – the kind of deficit recorded by banana republics before they collapse into slump, banking crises and hyperinflation.
The figures are so terrifyingly bad that even a shaken Office for National Statistics cautions that it is uncertain about the quality of its own data. But the core reality cannot be dodged and revisions will impact only at the margins rather than reverse the story: real export volumes over the period are down 4.4% and import volumes up a gigantic 10.4%.
The apologists point to exploding energy costs, statistical vagaries, the ongoing distortions of Covid, weak world markets, supply chain effects. What cannot be mentioned is Brexit and the obvious depressive impact it is having on UK exports and inward investment flows. The refusal of the governor of the Bank of England, Andrew Bailey, even to acknowledge what is happening and why is beginning to be a source of lack of market confidence in itself. Independence was to give the Bank a voice, not to be the government’s ever loyal dupe. The
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