The eurozone slowdown spells trouble for the UK

Eurozone growth is at its weakest level since October 2009.

The world economy appears to be slowing. This is bad news for Slasher and the UK economy.

This morning, Markit released its flash eurozone purchasing manager indices (PMIs), which are pretty good predictors of what is happening to output. Official data takes some months to be published and is frequently revised, so the timeliness of the PMIs is a big asset. What do they show?

Eurozone growth turns out to have been the weakest since October 2009, led by a sharp manufacturing slowdown. Input costs showed their smallest rise in eight months.

The main indices were as follows:

Flash eurozone PMI composite output index at 53.6 (55.8 in May). Twenty-month low.

Flash eurozone services PMI business activity index at 54.2 (56.0 in May). Six-month low.

Flash eurozone manufacturing PMI at 52.0 (54.6 in May). Eighteen-month low.

Flash eurozone manufacturing PMI output index(4) at 52.4 (55.2 in May). Twenty-one-month low.

Yesterday, the Fed completed its policy meeting and Ben Bernanke held his second press conference, in which he left open the possibility of more quantitative easing. Most importantly, the members of the FOMC downgraded their forecast for US growth and increased their forecasts for unemployment. This had an impact on oil and other commodity prices, which fell on the news. West Texas intermediate crude was down to $92.75 a barrel on the news, having been over $102 earlier in June.

The hawks on the MPC are wrong. Inflation is headed down.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Don't blame Brexit on working-class anger - it's more worrying than that

White voters who identified as "English not British" backed Brexit.

For those of us who believe that the referendum result in favour of Brexit is an unmitigated disaster, the nominations for culprits are open. Former Liberal Democrat leader Nick Clegg made a compelling argument in the Financial Times that the blame lies squarely with Cameron and Osborne.

Clegg, who has first-hand experience of Tory duplicity, is scarcely a neutral observer. But that does not make him wrong. No doubt the PM and the Chancellor are the proximate cause, and should be held accountable by their parliamentary constituents, their party, and by the country as a whole - or what’s left of it if Scotland goes its own way.

Yet journalists and historians alike would do well to probe deeper causes of the referendum result. One obvious culprit is the British press, who, at best, failed to scrutinise the Leave Campaign’s claims and at worst actively abetted them. The New York Times has suggested that using the EU as a punching bag has helped sell papers (or at least generate clicks) in what is probably the most challenging climate for traditional journalism in two centuries.  Boris Johnson, it seems, is irresistible clickbait for the fourth estate. And as Nick Cohen has observed on Saturday, Johnson and Gove, both politician-journalists, have elevated mendacity in politics from an occasional vice to a lifestyle choice.

The search for deeper causes of the Brexit vote, however, cannot end with the press. A different electorate could have taken a different view, as they did in Scotland, which voted 2-1 to Remain.  What was the magic sauce?

Too many commentators, especially those on the Left, have blamed working-class anger. It’s all about social class, apparently. Lisa Mckenzie nearly predicted the result on that basis. Others use it simply to criticise Tory austerity politics. Blaming class can be woven into another favourite narrative - this is about lack of educational attainment. Anyone who has lived in Britain for any period of time knows the class system, the town-and-country divide, and intergenerational wealth disparities as important features of British life. 

Another favourite culprit is racism, as the Washington Post wondered on SaturdayOthers had the same thought, and racist attacks are on the rise. Given Nigel Farage’s antics in the weeks before the election, none of this is surprising. Amidst such scary stuff, many have tried to emphasise that most Brexit voters are not racist, but rather disillusioned with the rule of metropolitan elites. Douglas Carswell is one proponent of this argument, but he’s not alone. The Economist, in an effort to avoid talking about race, asserts that this result was about age, region and class.

Still, this kind of analysis is at best naïve and at worst disingenuous. 

As Lord Ashcroft’s polls suggest, it is only the white working class (if by this we mean C2/DE, though many in DE are unemployed) who voted for Brexit. In fact, those describing themselves as "in employment" generally voted to Remain. Those describing themselves as Asian, black or Muslims overwhelmingly voted Remain. By contrast, nearly six in ten white Protestants voted to leave. 

Brexit was a rejection of British multiculturalism. That is the real take-home message of the Ashcroft polls. Of those who see themselves as "English not British", 80 per cent voted to Leave, irrespective of social class. Those who see themselves as "British not English" voted 60 per cent for Remain. Similar patterns (and similar press involvement) can be found in the Quebec referendum of 1995, which failed by a narrower margin than Brexit succeeded.

Of non-Francophone voters in Quebec, 95 per cent voted to remain in Canada. Those who voted to leave, on the other hand, were rejecting Canadian multiculturalism. Quebecois separatism was seen as part of a struggle for cultural survival.  

Whether or not you call those attitudes racist, the advent of white English (and Welsh) nationalism is, for those of us who have taught modern European history, the truly ominous consequence of Brexit. Do not be fooled by the alternatives.

Dr D’Maris Coffman is a Senior Lecturer in Economics of the Built Environment at UCL Bartlett. Before coming to UCL in 2014, she was a Fellow and Director of Studies in History at Newnham College and a holder of a Leverhulme Early Career Fellowship in the Cambridge History Faculty.