Andy Haldane, chief economist at the Bank of England, has been dragged Stasi-style to grovel in front of the cameras and apologise for the Bank’s Brexit vote forecasts. Governor Mark Carney warned that the economy might tank and that the Old Lady would be ready with the appropriate monetary medicine if it did. Note that he didn’t say UK plc would tank, merely that there was a possibility. Imagine if he’d said and done nothing, and the economy had gone down the skids. Cue for mass panic and a one-way ticket back to Canada.
I don’t recall weatherman Michael Fish being hauled out of the Met Office to appear on TV and utter a piteous mea culpa for his famous failure to forecast stormy weather, nor Tory right wingers frothing at the mouth about weather forecasters. Fortunately, the UK public takes the sensible view that weather forecasts are sometimes wrong, but often right, and that it should pay attention to such forecasts.
Instead, economists are taking the rap for talking down Brexit, instead of jumping for joy at the prospect of an economic train crash. Michael Gove has taken another pop at “experts”, especially economists, as if all you need is common sense, innit mate? If he’s ever in hospital for a hip replacement, could I suggest he employs the services of his plumber rather than a fully qualified surgeon? There’d be lots of cutting equipment to hand, and it would be so much cheaper.
But you could be forgiven for asking why, amidst the doom and gloom of many commentators, UK plc hasn’t yet tanked. The answer is simple. Consumers carry on spending because the Government’s Brexit news blackout has lulled them into a false sense of security. Given the total lack of information about the state of negotiations, you could be forgiven for thinking that everything is hunky dory and carry on BAU, It’s only when people like Sir Ivan Rogers, the UK’s former top diplomat at the EU, pops his head above the parapet and says what a shambles Brexit really is that you get a sense of the pain to come. Needless to say, Brexit Stasi enforcer Iain Duncan-Smith trashed him as “not to be trusted”. Be careful what you say. Big Brexit is watching you.
Professor Sir David Hendry, esteemed econometrician (economics with numbers) told a conference I attended years ago that when weathermen got their forecast wrong the government gave them extra wonga to buy a bigger computer. When economic forecasters got it wrong, their budgets were cut. I understand why Andy Haldane felt pressured to apologise, but in truth he had no need to. Even experts get it wrong, but often they’re right. The big test of economists’ predictions won’t be in the months after the Brexit vote, but in the years following Brexit.