|Britain: "Stepping into the deep"|
On Monday, chancellor George Osborne sought to calm the markets, saying the Conservatives had “prepared for whatever the future held”. But Osborne did not reverse his prediction that Britain’s exit would plunge the country into recession and cost thousands of jobs. Meanwhile, the pound dropped to a 31-year-low against the dollar.
As the country -- and the continent eyeing it warily across the Channel -- attempted to come to grips with the fallout of last week's vote to leave the European Union, its political parties imploded in a frenzy of backstabbing and internecine struggle.
It's intrigue and skulduggery that puts the current feuding across the pond, where Donald Trump is now rounding on GOP rivals who have so far refused to back him, in the shade.
First, there was the no-confidence vote against Labour Party leader Jeremy Corbyn, whose lackluster support of the Remain campaign infuriated many of his fellow colleagues in the opposition. Corbyn's decision to fight for his post -- backed by much of Labour's more leftist rank-and-file -- has triggered "what will likely be an ugly and protracted war for the party’s soul," writes The Washington Post's Griff Witte.
Uncertainty following Britain’s decision to leave the European Union will be sufficient to push its economy into recession by the turn of the year, according to research by analyst Davy.
Following the result, the outlook for the UK economy has “deteriorated sharply”, according to the report, which said UK GDP would grow by just 1.2 per cent in 2016 and 0.2 per cent in 2017.
“We believe the uncertainty will be sufficient to push the UK into a recession through the turn of the year 2016/2017 based on a 10 per cent peak-to-trough contraction in business investment by early 2017,” it said.
Davy is forecasting a 2.1 per cent rise in consumer spending in 2016, slowing to a marginal 0.1 per cent gain in 2017.
“We expect investment to contract by 1.5 per cent in 2016 and 3 per cent in 2017,” said the report. “We now expect UK employment to grow by just 1.1 per cent and 0.1 per cent in 2016 and 2017 respectively – so that productivity growth is flat and companies limit their firing of employees.
“This means the unemployment rate rises from an average of 5.2 per cent in 2016 to 6.5 per cent in 2017.
Whatever positive coloring the financial markets are trying to give to the fallout of Brexit, the bottom-line in describing the future of the "British Mouse that roared" must include two words: disaster and meltdown.
Other EU members trying to follow Britain's "jump into an uncertain future" better start reading the Tea leaves.