Brexit

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Project Fear, it turns out, was no project fear. Its forecast of lower investment (now 26% below other recoveries), lower growth (3% below trend as forecast) and a reduction in sterling’s value (18% down) were all correct or erred on the over-optimistic. Investment in the car industry has plummeted from £4.5bn in 2014 to a projected £200m this year. Nothing like this has happened in a major industrial sector since the Great Depression of 1931. Under Johnson’s already near-dead Brexit proposal, car companies will wind down their UK operations gradually; under no deal, they will simply close or exit as just-in-time production becomes impossible. Similarly hit: pharma, biotech and aerospace. Even the buoyant service sector is being infected: the IHS Markit business confidence indicator last week fell below 50, foretelling recession in services next year.

Overall, there can only be economic stagnation-cum-recession in 2020 and 2021; if there is no deal, in some sectors it will become a slump. The notion that slow-to-negotiate trade deals with Australia and the US will ride to the rescue is pure fantasy – the volume of trade is a fraction of that with the EU. The EU is an economic safe harbour. More than that. Britain is a European country with a European vocation. There is no deal better than the one we had, being full members of the EU.

 There is only one route out of the Brexit maze and Jeremy Corbyn must lead the way | Will Hutton | Opinion | The Guardian