Brexit

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When asked about prospects for the coming 12 months in the light of the result of the EU referendum, consumers' response was strongly negative in all seven areas. Non-essential spending is the area where consumers feel least confident over the next 12 months. This was closely followed by their overall personal financial situation, and savings and investments. UK house prices was the area where people feel least concerned.

Deloitte Consumer Tracker for the second quarter of 2016 - Business Insider

Business leaders urged U.K. Chancellor of the Exchequer Philip Hammond to deliver a “bumper” fiscal stimulus, saying the Bank of England can do little to revive confidence on its own. The Institute of Directors said its latest survey found increasing pessimism about the economy in the wake of the surprise decision in June to leave the European Union, with marginally more firms now expecting to cut investment than increase it over the next 12 months.

BOE Action Not Enough as U.K. Business Pleads for Fiscal Boost - Bloomberg

Catastrophist talk of an instant downward spiral following a No vote in the referendum – mostly emanating from George Osborne’s coterie - was always premised on the willfully-false assumption that the Bank of England would sit idly by and let it happen. Today’s actions have at least demolished that canard... The risk of doing too much is far lower than the risk of doing too little,” he said. Mr Blanchflower said the new global consensus in a world of zero rates is that monetary and fiscal policy must act in concert, each reinforcing the other for maximum effect. This is the exact opposite of post-war orthodoxies, but the cult of central bank independence was always a fair weather illusion. We are all Keynesians now.

We are all Keynesians now, so let's get fiscal

The Bank of England has fired the starting shot of a massive policy pivot as Britain disentangles itself from the EU system after 43 years. The quarter point rate cut today and a further £10bn of Gilt purchases each month for the next six months will help to shore up confidence, and may ‘bend down’ the yield curve a fraction more. Yet borrowing costs are not the problem. The UK has been stuck in an investment slump ever since the Lehman crisis, even though it has never been cheaper to borrow in the known history of the human race. British companies are sitting on £500bn of idle cash already because they cannot see how to make a profit amid secular stagnation.

We are all Keynesians now, so let's get fiscal