Business was broadly supportive of remaining in the European Union so it was understandable that a number of people immediately expressed disappointment at the result of the referendum. But now it seems to me that there is a real danger that disappointment could turn into pessimism and that it bad news for the economy.
I have been speaking to many people about the current situation and three words are used time and again. They are leadership, clarity and confidence. And it seems we are short of all of them.
The Conservative Party is doing something about the first two, running an election campaign to find a new Prime Minister who will choose a new Cabinet and set about the complex task of running the country whilst negotiating our way out of the EU. This process should also help provide us with a much clearer idea of what the future holds and what the consequences are going to be.
When it comes to confidence, that’s largely in the hands of businesses themselves. It’s all too easy to talk things down and there is a risk that turns into a self fulfilling prophecy.
Unfortunately we are already hearing stories of projects being put on hold whilst companies wait to see how events turn out, there is talk of overseas investors pulling out of deals and gloomy forecasts of a return to the recession of 2008.
However, the big difference between now and seven years ago is that was a time when there were real economic problems. This is a quite different situation where the problems are largely imaginary, based on speculation. The best anti-dote to the poison dripping into the economy is to continue to focus on economic growth, yes, seeking clarification and asking for steps to help steady things, but forging ahead with ambitious plans and investments.
Lord Wolfson, the Chief Executive of Next, recently hit the nail on the head when he wrote: “We are an intelligent, innovative, decent, hard-working and tolerant people. If we can put the vitriol of the past few months behind us, and adopt the right policies, there will be few countries better placed to prosper.”
That’s exactly the right approach and let’s hope it is widely followed.