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Blanchflower: Turmoil Amongst Conservatives on Brexit (Audio) · Bloomberg Intelligence

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  Speaker 1: one point eight nine percent down, indust rolls up two
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  Speaker 1: West Texas intermediate crude of fifty six cents. Again, of
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  Speaker 1: one point two percent. I'm Charlie Pellett and that's a
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  Speaker 1: Bloomberg business flash. The Brexit vote on Bloomberg Radio. The
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  Speaker 1: Brexit debaate and even more heated it in the British Parliament,
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  Speaker 1: as a Conservative lawmaker asked the head of the Bank
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  Speaker 1: of England Mark Arney of his former employer, Goldman Sachs,
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  Speaker 1: encouraged him to warn about the risk of the UK
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  Speaker 1: leaving the European Union. Can I'll just give you the
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  Speaker 1: opportunity to refute any suggestion that Goldman Sacks may have
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  Speaker 1: put pressure on your second Wow. Um, it's not an
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  Speaker 1: allegations refuge. Well, yes, I refute it categorically and and stunned. Stunned,
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  Speaker 1: says smart Kearney. Let's ask David Danny blanche Flower, professor
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  Speaker 1: of economics at Dartmouth College, if he was stunned by
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  Speaker 1: this question. Danny, a brit himself and a former member
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  Speaker 1: of the Bank of England's Monetary Policy Committee. Welcome back, Danny,
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  Speaker 1: be great to chat you. I was completely stunned too.
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  Speaker 1: I don't think in all the time I've listened to
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  Speaker 1: governors of the Bank of England answering questions in front
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  Speaker 1: of the Treasury Select Committee. I've ever heard a governor
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  Speaker 1: say wow. I mean he didn't have to say much. Yes,
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  Speaker 1: that was quite something. That and another another person asked
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  Speaker 1: him about whether he'd been leaned on by the government
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  Speaker 1: to say that the things that he'd said, and that
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  Speaker 1: that actually he'd been pushing government propaganda, and the governor
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  Speaker 1: was not very happy, shall we say, and I think
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  Speaker 1: it was out of line? Why was it out of line?
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  Speaker 1: What's wrong with at least asking the head of the
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  Speaker 1: Bank of England these questions? Well, I think, I mean
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  Speaker 1: it's I guess it's you know, the way the way
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  Speaker 1: it was said probably was a little bit too much,
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  Speaker 1: but you're right, I mean the job of the governors
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  Speaker 1: to explain what he's doing. I mean he actually said,
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  Speaker 1: this is actually part of my remit this is what
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  Speaker 1: I'm supposed to do. It was asserted that this vote
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  Speaker 1: for Brexit is like an election, but the governor I
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  Speaker 1: think made it very clear that that's not true, partly
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  Speaker 1: because we know what would happen to the Brexit. You
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  Speaker 1: would leave and then there'll be a lot of uncertainty.
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  Speaker 1: An election is not so clear, so that was the
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  Speaker 1: big issue. But I think the evidence is that from
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  Speaker 1: lots of sources that Brexit looks like an econog economically
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  Speaker 1: negative event for the UK and probably for the world.
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  Speaker 1: Why for our listeners, who maybe are not following it
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  Speaker 1: as closely, why will Brexit be so negative? Well, I
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  Speaker 1: think the first thing is we've already seen some slowing
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  Speaker 1: in the UK economy, We've seen a rise in uncertainty
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  Speaker 1: about what the future might bring. But I think you
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  Speaker 1: and I have talked on this before. I mean, it's
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  Speaker 1: quite clear that this would be in a sense the
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  Speaker 1: first domino that might generate other other countries to fall
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  Speaker 1: next it, if you like, um, the Netherlands leaves or
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  Speaker 1: the Grease leaves or whatever. So the breakup of this
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  Speaker 1: huge economic area would be a very big deal. But
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  Speaker 1: I think the evidence certainly looks that it would generate,
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  Speaker 1: certainly in the short term, some considerable slowing of the
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  Speaker 1: UK economy which could feed through to the rest of
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  Speaker 1: the world. I mean, the FED is going to be
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  Speaker 1: mindful it makes a vote on very little time prior
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  Speaker 1: to that Brexit vote, so that that in itself is
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  Speaker 1: going to have an implication. I mean, obviously, if it
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  Speaker 1: looks like it's not going to pass, that's one thing.
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  Speaker 1: But if it looked like it did, if you were
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  Speaker 1: sitting at the FED, you'd be mindful of this to
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  Speaker 1: be a worldwide event. Then I just want to push
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  Speaker 1: back a little bit of this on the on the
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  Speaker 1: domino theory. I mean, domino theories have been used in
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  Speaker 1: the past, and they've been shown in the past and
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  Speaker 1: not be accurate. So rather than speculate on it, is
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  Speaker 1: there any way to sort of just quantify what No' Well,
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  Speaker 1: I don't think there's a way to quantify what the
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  Speaker 1: Bank having has done, which I don't think is crazy,
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  Speaker 1: is they have seen slowing already. Um, they've attributed half
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  Speaker 1: of that slowing to the fears of Brexit. We've actually
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  Speaker 1: seen contracts, apparently commercial property contracts that have had clauses
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  Speaker 1: put in them which says that in the event of Brexit,
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  Speaker 1: the deal won't go ahead. And that's that's obviously the
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  Speaker 1: first thing. But I do think that that that it
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  Speaker 1: has political implications, probably more than economics to other parts
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  Speaker 1: of Europe, and there are movements in other countries. In
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  Speaker 1: France and as I said in the Netherlands, that suggests
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  Speaker 1: that um, if a country can leave and nobody thought
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  Speaker 1: they could, then others could too. Remind us Danny of
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  Speaker 1: what the pro brexit argument is Internet sell Well, the argument,
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  Speaker 1: more than anything is that the UK needs its own sovereignty,
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  Speaker 1: it doesn't need rules set out to for it by
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  Speaker 1: the European community. And even though they haven't set out
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  Speaker 1: what brex it would look like, I mean, some of
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  Speaker 1: them will argued it would look like the Albanian model,
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  Speaker 1: that that would absolutely be wonderful and they could re
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  Speaker 1: negotiate all kinds of deals separately and they would have
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  Speaker 1: control over immigration. But but sadly they haven't really persuaded
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  Speaker 1: people as far as I can see in international groups
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  Speaker 1: around the world, including the o E, c D and
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  Speaker 1: the I m F. And President Obama has said, this
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  Speaker 1: really does not look credible, and you're not going to
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  Speaker 1: be very able quickly to negotiate trade deals and all
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  Speaker 1: the countries you're going to need to do that with.
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  Speaker 1: So that's so the theory is obviously that's a negative event.
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  Speaker 1: Is there any a fear that there will be a
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  Speaker 1: backlash from the electorate, from all the people explaining why
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  Speaker 1: a vote to leave is terrible. Well, I certainly think
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  Speaker 1: that's a likelihood of that, not least in fact in
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  Speaker 1: the government. I mean, David Cameron looks to be in
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  Speaker 1: trouble whichever way it goes. If there's a vote for Brexit,
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  Speaker 1: then obviously I think it's very likely have to have
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  Speaker 1: to quit. And if there's a vote not to leave,
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  Speaker 1: and it's pretty narrow now he's got a split party. Um, politically,
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  Speaker 1: this is a highly charged event. So yes, I think
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  Speaker 1: it's going to have implications later, but probably not least
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  Speaker 1: amongst the governing Conservative Party, where you actually have got
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  Speaker 1: some government ministers on each side. So I think that's
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  Speaker 1: where the biggest term was going to be. Thank you
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  Speaker 1: very much. Danny blanche Flower, Professor of Economics, Dartmouth College,
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  Speaker 1: on Twitter at d underscore a blanche Flower about the
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  Speaker 1: Brexit vote on June. This is Bloomberg Radio. Location, Location,
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