With Boris Johnson due to enter Number Ten and not ruling out a no deal Brexit, we will now have to endure 101 days of Project Fear on steroids!

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And now for something completely irrelevant: someone called Jo Swinson has become the leader of the Liberal Democrat Party.

Why am I bothering to tell you this? Because she has just pronounced that she will do whatever it takes to stop Brexit. I assume therefore, that the 'Democrat' part of her party title is now redundant?

But, we Brexiteers will continue to busy ourselves doing whatever it takes to make sure that the democratic will of the people in the 2016 referendum is observed.

The people deserve more than an anti-democrat at the head of a UK political party.

Moving on.

Very predictably, with 101 days to go to a potential no deal Brexit, we now have project fear turning out stomach churning stories of an imminent recession and inflation to hit four percent, if we leave the EU without a deal.

In fact the story is that Brexit may already have forced the UK into a recession.

The Guardian and Evening Standard are running pieces on a report from the National Institute of Economic and Social Research (NIESR), which says that economic growth has stalled and that we may already be in a technical recession.

On Brexit the NIESR says that if its main case scenario pans out, then the UK economy will grow by one percent in 2020 and 2021.

And if we leave with what it calls an orderly no deal Brexit then we can see stagnation in 2020 with growth coming back in 2021 but with four percent inflation.

But just to remind everyone, according to the ONS, the Consumer Prices Index CPI) annual rate of increase stayed above four percent for the entire year of 2011.

Now, with what the NIESR calls a disorderly no deal Brexit, they claim it would mean 'a severe downturn'.

The full NIESR report is not due for release until Wednesday, but the press release talks about their 'main case forecast scenario', which I read as not being a no deal.

It says:

"In our main-case forecast scenario, economic conditions are set to continue roughly as they are, with high levels of employment and capacity utilisation but slow growth as businesses refrain from investment in view of continuing high uncertainty about future trading relations."

I read that as a further Article 50 extension – we'll find out on Wednesday.

The screed does mention the global economy in passing, but you only have to read some of the worldwide press to see the headwinds that affect every country.

ABC News says that manufacturing is in retreat and threatening to take the global economy down with it, saying:

"In June, manufacturing output slipped to a three-year low. It is now teetering on contraction.

"European output is already in reverse, and has been for some time, dragged down to a large extent by German factories which have been enduring recessionary conditions for much of the year."

While David Rosenberg writes in the Financial Post that it is deflation that is the number one enemy.

And the Economist said at the end of last month that the global economy is on a knife edge.

So when Project Fear reports come out in the next few weeks warning you all about that no deal Brexit economic doom and gloom, remember the global perspective.

Also remember the disaster predicted by Project Fear just before we voted in 2016. That never came to pass, did it?

Sources:

https://www.theguardian.com/business/2019/jul/22/no-deal-brexit-uk-recession-niesr-british-eu-trade

https://www.standard.co.uk/business/nodeal-brexit-fear-for-uk-with-inflation-set-to-surge-above-4-a4195346.html

https://www.niesr.ac.uk/media/niesr-press-release-prospects-uk-economy-august-2019-review-13855

https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceinflation

https://www.abc.net.au/news/2019-07-21/manufacturing-retreats-threatening-to-take-global-economy-down/11325860

David Rosenberg: Deflation still No. 1 threat to global economic stability

https://www.economist.com/finance-and-economics/2019/06/27/the-global-economy-is-on-a-knife-edge

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