1. It is not good and possibly quite bad for the UK, London and Europe.
2. But it is a very fluid, rapidly unfolding complex situation with lots of cross currents, backwash etc.
The mood here is not of unalloyed jubilation and relief, but more shock and anxiety.
3. One way to think of it is that a fairly inchoate vote, for a, Brexit, will now meet the machinery of party politics, representative democracy and European Union. It is not a straight line from Thursday’s vote to outright Brexit. Many twists and turns to come.
4. One issue will be speed: do events unfold fast or slow? Do Brexit talks start, to reduce uncertainty, or do they wait till new leadership in place etc. Will Article 50 be invoked (Doubt it.) Angela Merkel indicated she prefers slower pace. So now does leadership in the UK. Faster is worse. Slower is better.
5. Will pragmatists or hardliners win? Hardline would be Europe to teach the UK and others tempted by “exit” a harsh lesson. No cooperation. Hardliners in the UK would press for full scale Brexit asap. The more pragmatic approach would be to seek to calm things down, find a new accomodation, possibly Norway style. Pragmatic is better. Hardline worse. (One litmus test is Calais: will the French continue to do border checks on migrants on UK behalf, so holding them in the “Jungle” camp or will they send them on to be dealt with at Dover.)
6. All this complicated by political leadership turmoil in UK and on the horizon in Europe. British political leadership absent without leave.
Tory Party will have new leader in October. Johnson most likely to run against more moderate Therea May. BoJo current favourite but mood might turn against him for lack of seriousness in very serious situation. Lots of former Cameron loyalists are out to get Johnson. Civil war continues. Also possible that Tory Party will end up with a moderate “remainist” leadership of a majority remain party but with Brexit policy. Outcome: Norway style EEA.
Labour similarly likely to depose Corbyn or stage a leadership contest. This very fluid. Keep an eye on who gets nomination for Jo Cox’s seat at Batley and Spen. Possible new leadership might remake the party. But also possible it could continue its downward spiral which would only help UKIP.
Also possible longer run there could be a political realignment, with rise of new pro-Remain Centre party/coalition.
7. Will there be another vote? Not under current leadership but
(i) almost certain there will be a General Election which could be another vote on EU membership, a pro Remain, or Pro Europe majority could emerge in Parliament
(ii) possible also that a new PM might negotiate a new deal with EU – Norway style – and put that to another referendum.
I think (i) is almost certain and (ii) possible.
Key question: would this change the outcome?
Depends on what question is asked: next time hope for a better question which would split the Leave vote and coalesce the pro Europe vote.
9. Political mood culture.
Some celeberation in hard line anti Europe areas. Lots of people do want to “take back control” because they feel they have none. Yet no real sense of jubilation, especially in London but elsewhere. Lots of anxiety, some remorse, disbelief. Many were registering a protest vote against being left behind by global capitalism and ignored by political elite. Not clear how leaving the EU is really going to appease them, especially as recession bites etc. Not even clear how controls on immigration will be imposed. Anti-immigrant feeling now given more legitimacy, especially outside London,
Lots of people – especially young and in London – feeling betrayed.
My bet is that people who voted Leave will also come to feel betrayed.
Prospect of more division and recriminations, unless credible new leadership emerges to try to unite country.
10. Britain’s standing in Europe hugely diminished. Possible growing hostility to England in Europe for foisting this crisis on Contient. Of course big winners are those that want a weaker Europe, weaker liberal democracies – Putin, Trump, Xi. Danger that Britain becomes much more isolated, unless very deliberate attempt to prevent that.
11. Underlying issues – political elite out of touch/self-interested, flatlining incomes, anti-immigrant populism, cruel capitalism – are Europe wide. This is part of the crisis of the Continent and the EU as a set of institutions. 2017 year of very big elections. Spain in political dealock. France establishment fighting off Marine le Pen. Merkel facing elections. European leaders need a strategy to see off rise of populism, especially from the right. Qualifying freedom of movement likely to be a part of that. Not clear how that compatible with single market.
12. What does that mean for investing in Europe, UK and London?The natural and right reaction would be to become more cautious, especially about UK as a whole.
Crisis might provoke more concerted response, which could go in different directions (more integration or more border controls) or further drift which might feed rise of populism etc.
London: it is less clear how this will affect its standing and position, financially, intellectually and culturally as global capital etc.
Property prices will plateau and possible bubble will burst.
Edinburgh and Dublin look very attractive.