The British economy retracted by 2% in the first quarter of this year.   There are two points that can be made straight away, both obvious, and both consequential on the fact that the lockdown was only in place for one week in March:

1. the fall was not solely attributable to the virus: Brexit has rendered the UK economy damaged and vulnerable.

2. if you think a retraction of 2% is bad, just wait until you see the next quarter.

Oddly enough, and entirely out of character, I am not particularly downhearted by these figures in so far as they represent the impact of the virus.   I am profoundly pessimistic about the impact of Brexit.  Brexit has a damaging long term impact on our access to important markets: the virus is a shock to the system; it will – already has – hit production, employment, government revenues and so on, but I think healthy businesses will bounce back.  One of the likely results will be a strengthening of the rights of low paid – and “gig” economy workers.   Their financial muscle is likely to be joined by those whose spending has been artificially restrained by the lockdown who, as they are gradually released back into the economy, are likely to ramp their spending back up.  It is no bad thing that companies without long term viability should be cleared out – it may be painful for a while, but in the longer term – say 3 or 4 years – their demise could result in a transformation of industry.  Our reliance on overseas markets has been cruelly exposed with shortages of protective equipment; that, too, may have a long term benefit if it gives a fillip to British manufacturing.  The critical point is market access – which is precisely why Brexit is so damaging, it hurts us in a peculiarly tender spot.

Will the British public come to their senses before it is too late – arguably they already have. Will the British government come to their senses – such as they are – before it is too late?  Too early to tell, but one thing is sure they won’t give up without a fight, and that is going to hurt.  We ain’t seen nothing yet.