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A no-deal Brexit would be a more fundamental change to the economy than a recession. Banks and manufacturing moving out of a country are not easily reversible, temporary actions. The Irish backstop will still be in play, which will either be permanent or will be replaced by unification--also permanent. Major and permanent political realignment could happen when you have two parties that are both divided on the EU issue; maybe there won't be either a Conservative OR a Labour party. Trading relationships are not permanent, but they have a really long lifetime because they are so hard to negotiate. Getting back into the EU will be tough, and will be under different terms.
Seems to me that expecting the Brexit fallout to be of the scale and permanence of a recession might be misleading.
But what happens if the UK starts slipping down the global ranking list towards 10th. place? What happens if the chronic political instability and economic under-performance of the 1960's and 1970's returns? We're not talking short term recession here, but long term decline.
Economies have changed radically since the 1970's. The UK has de-industrialised and become more dependent on food imports. Financial services, capital movements, supply chains and cross-national just in time manufacturing processes have become much more complex and integrated.
Sometimes I think that national politics haven't caught up with these changed economic realities. I see the UK industrial base eroding further, financial services migrating abroad, intellectual properties being sold off, and the government's tax base disappearing down the toilet. But we won't know the extent of this for some years, and yes, the scapegoats will be many and varied. But it will be too late for that to matter. The damage will have been done.
Index of Frank's Diaries
The UK's economy is boosted by the global pre-eminence of The City. But leaving the EU will damage its usefulness, even if the City has already negotiated its own deal about access.
keep to the Fen Causeway
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