A vote of confidence

During the referendum campaign, it seemed at times as if a competition was on to issue the most hyperbolic claim of what might happen should the British public vote to leave the European Union. Now politicians and commentators are competing to come up with the most hysterical assessment of the British decision to leave. Leading the field is Mark Rutte, the Dutch Prime Minister, who declared that ‘England has collapsed: politically, monetarily, constitutionally and economically.’ In other words: without us, you’re nothing.

Politics in collapse? We do not want to intrude on the private grief of the Labour party but the Tories are heading into a leader-ship contest with as much sense of direction as at any point in the party’s recent history, as James Forsyth explains on page 14. Monetary collapse? The pound buys as many euros as it did two years ago and its softening against the dollar will only make our exporters more competitive in the word’s largest economy. As Mr Rutte knows, a falling currency brings a stimulus that many eurozone countries would kill for.

But the single most important monetary figure is the gilt yields: the interest rate charged on the UK government as it borrows money. The more worried investors are, the more interest they charge on loans to the government. When Greece hit the rocks, markets charged 30 per cent interest rates. On Monday, the UK gilt yields dipped below 1 per cent for the first time in our nation’s history. Which means that investors, unlike European politicians, seem to have plenty of faith in Britain. Economically, this country has been creating more jobs than the rest of Europe put together (which partly explains our immigration problems).