Economic Implications

By Desmond Lachman

Desmond Lachman is a resident fellow at the American Enterprise Institute. He was formerly a Deputy Director in the International Monetary Fund's Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney.

Last Thursday, in voting in favor of Brexit, the United Kingdom electorate voted with its heart rather than its head. Instead of heeding the consensus of economists and policymakers about the likely dire economic consequences from a decision to leave Europe, it chose to be swayed by concerns over continued high immigration and a purported further loss in sovereignty that remaining in Europe would have entailed. Sadly, the fallout from this decision is likely to be long felt not only in the United Kingdom but well beyond that country’s borders.

The reason for fearing a particularly adverse economic fallout from the Brexit vote is that the referendum took place at a highly inauspicious time for the UK, the world’s fifth largest economy. Indeed, it occurred at a time when the UK had an external current account deficit of seven percent of GDP, which is the largest such deficit in the UK’s post-war history. It also occurred at a time when the UK banking system had grown to be among the largest in the world relative to the UK’s GDP.

“The Cipher Brief has become the most popular outlet for former intelligence officers; no media outlet is even a close second to The Cipher Brief in terms of the number of articles published by formers.” —Sept. 2018, Studies in Intelligence, Vol. 62

Access all of The Cipher Brief’s national security-focused expert insight by becoming a Cipher Brief Subscriber+ Member.

Subscriber+

Categorized as:InternationalTagged with:

Related Articles

How Safe Would We Be Without Section 702?

SUBSCRIBER+EXCLUSIVE INTERVIEW — A provision of the Foreign Intelligence Surveillance Act that has generated controversy around fears of the potential for abuse has proven to be crucial […] More

Search

Close