A PROBLEM facing economists is that it won't be possible to assess the macroeconomic impact of the Brexit vote for quite some time. The official estimate of GDP growth in the third quarter of this year will not be published until late October.

More annoyingly, this estimate will not have a detailed breakdown of what's going on in the economy; we will have to wait until late November for that. We won't get any hint of the impact on unemployment until around September. However, there are high-frequency data which, unfortunately, paint a very worrying picture. 

Journalists and economists look to financial markets as a decent proxy of what the economic damage will be. For instance, the collapse in housebuilders’ shares is consistent with a 5% fall in house prices next year, based on historical data, according to Samuel Tombs of Pantheon Macroeconomics, a consultancy.

However, one big problem is that financial markets are all over the place...Continue reading