Simoney Kyriakou  

Brexit, base rates and barren shelves

Simoney Kyriakou

Simoney Kyriakou

Bank of England governor Mark Carney has once again prophesied dark things ahead for the UK economy.

In a week where the 45th President of the US couldn't even remember what the United Kingdom was called and Love Island finally disappeared from our telly boxes, the charismatic Canadian Mark Carney gave us his portent of doom.

As the base rate inched up to 0.75 per cent, the Bank of England also issued its outlook, in which Mr Carney warned that a no-deal Brexit could put the UK economy onto a recessionary track. He said this would be similar to a banking crisis, with a deep recession, and a sharp drop in house prices.

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This 'severe economic shock' scenario included inflation of 4 per cent, shrinkage of the UK's gross domestic product (GDP) by as much as 7 per cent, house prices falling by a third, and unemployment reaching 9.5 per cent.

His warning comes amid media speculation over government-sanctioned food stockpiling, as depicted by photographs of empty supermarket shelves, and warnings over the exponentially rising price of Brie.

Given how quickly these things escalate, I wouldn't be surprised to see pictures of 1970's-style bread queues, garbage bags piling up in our streets and headscarved Chelsea mothers crowding round a UN aid convoy waiting for sacks of quinoa and couscous to be thrown to their waiting arms, while men in blue donkey jackets crowd round fiery oil drums protesting prices at the pumps.

I've always believed in facts, in statistics. In trend analysis, not sentiment-driven speculation.

I know there will be a detrimental economic impact to a hard, no-deal Brexit, and I know it will have a social impact on the lives of the poorest in the UK (or England or Great Britain, if you're Donald Trump). 

But I just can't see a protracted deep-veined recession coursing through the UK economy that will end up with a third of the UK in negative equity and fights breaking out for bread outside the local Co-op. 

Some sanity, please, from those in charge. Present us with the analysis, with the knowledge, and show some wisdom in how these scenarios will really apply to everyday folk.

And, while doing so, present some guidance for us to follow: save more, now. Make sure our funds are diversified. Take out appropriate insurance.

And make sure if you're stockpiling beans in your garage, that you don't forget the tin opener.

Simoney Kyriakou is deputy editor of Financial Adviser