I love economists, I really do. I adored economics at school, spent five years studying the subject at university and have written about the economy, among other topics, for my entire professional career. I like hanging out with dismal scientists.

But it’s time for economists to take a chill pill. They need to relearn a little humility, especially when it comes to trying to understand the impact of a gargantuan event such as Brexit.

Grasping its implications is not in their or anybody else’s comfort zone, and they would be better off admitting as much sooner rather than later.

Every so often, when they are not too busy being self-important, economists realize the absurdity of what the public expects of them.

There are whole websites devoted to jokes about economists, with various anonymous authors gently poking fun at themselves. One soon gets the hang of the art form: “It’s tough to make predictions, especially about the future” – that sort of thing.

It is a shame, therefore, that economists, as a group, seem unable to display such self-awareness when it comes to their extreme, near-unanimous forecasts about Brexit.

As recently as a few days ago, something like 90 per cent believed that Armageddon was on the cards merely as a result of the Leave vote. Yet whenever dismal scientists agree so passionately about the impact of a complex, one-off and multi-faceted event, alarm bells deserve to go off.

Anybody who has followed economic forecasts closely over the past 15 years knows full well how wrong the consensus almost invariably turns out to be – not surprisingly, as it is a case of predicting the unpredictable.

The average economist always gets turning points in the business cycle wrong, is too optimistic at the height of a boom and too pessimistic at the trough of a recession.

Their predictions about unemployment, wage growth, productivity, central bank and market interest rates and inflation have all been drastically off the mark in recent years. This is as true of City forecasters as it has been of the bank of England and official bodies.

Most damaging of all was all the nonsense about double or triple-dip recession a few years ago, a pathology compounded by data that keeps being revised.

If that weren’t the case, and if working as an economist conferred upon practitioners some near-magical, proto-astrological insight, business, investing and life in general would be too easy. It’s time the profession stopped pretending that it is dealing with a simple, mechanistic world.

It is far too soon to tell what the short-term impact of Brexit will be – after all, expectations and animal spirits are inherently intangible and arbitrary. There may still be a sharp downturn. But so far, all the official data has utterly confounded the consensus view among economists.

David Fuller's view

Here is a PDF copy of the article.

Most economists are prone to group think, which is usually wrong.  When most economists hold a similar view, they are thinking about themselves in terms of financial fears and insecurity, instead of striving to think objectively for themselves.

You are probably already thinking, correctly, that as analysts and investors or traders we face the same challenges.  It is not easy to avoid group think.  However, if you remember that consensus views are usually contrary indicators, especially when widely held, you will be more objective and perhaps profit from your contrarian thinking.   

As for Brexit, yes there is plenty of uncertainty but that’s life and it is also an exciting opportunity.  We have regained control of our country and our destiny.  The UK will be motivated by good governance and the success of our amazingly diversified Olympics team.  Seize the moment.