The UK’s stunning vote to leave the European Union was driven by much of the same sentiment that fuelled Donald Trump’s insurgent march toward the Republican presidential nod: a rejection of economic globalisation and the elites who favour it by those who feel left behind.
Many economists warn that the British vote to leave the EU, dubbed “Brexit,” could cripple that nation’s economy - just as many say Trump’s ideas would stifle US growth or even trigger another recession.
Millions of voters have defied those concerns. The Brexit vote and Trump’s widespread support reflect a sweeping rejection of expert opinion in advanced countries. Yet that rejection itself could raise the likelihood of further economic harm, some economists warn.
At first glance, the UK and US economies look comparatively healthy. Both have low unemployment rates. Both have recovered from the Great Recession better than either continental Europe or Japan. Yet in both countries, those figures conceal underlying weaknesses.
Stark regional differences are also evident in both countries. London has boomed in recent years along with its thriving financial sector, and home prices in the city have soared. By contrast, steel plants and coal mines have closed in Northern England and Wales.
A similar economic divergence is visible in the US: Thriving technology startups have invigorated a handful of cities such as San Francisco, Seattle and Denver. But jobs and incomes have grown more slowly in other metro areas and in rural areas.
In the US, pay-cheques have recovered from the recession but have risen much more slowly than they did beforehand. And both countries took much longer to recover from the downturn than they did after past recessions.
The “Leave” supporters argued that Britain’s economy would improve once it threw off excess regulation imposed by Europe and was no longer yoked to continental Europe’s moribund growth.
Yet many economists say UK companies may face new barriers to their exports in Europe after they leave. The EU will want to negotiate tough terms with Great Britain to discourage other countries from leaving the union. Many companies, particularly international banks, which have a huge presence in London, could shift thousands of employees from London to Paris or other cities on the continent.
Trump and Brexit supporters express eagerness for change, regardless of the warnings from experts.