Why the Stock Market Shouldn’t Be Used to Judge Brexit

According to The Daily Signal:

Last week, the United Kingdom decided to leave the European Union. The U.K.’s earlier decision to stay out of the euro currency (which most, but not all, EU member states use) contains an unexpected lesson about economics and humility.

In 2003, British Chancellor of the Exchequer Gordon Brown announced that Britain’s economy had not met the five criteria necessary for joining the euro and abandoning the pound.

With the political mood firmly against entry into the euro, pro-euro Prime Minister Tony Blair allowed Brown’s test to stand. Both men favored eventual accession to the euro, but were convinced that economic conditions in the U.K. were sufficiently different than those in mainland Europe that monetary union was risky.

Although the question of euro entry was debated by economists at the time, it is now widely believed that the Bank of England, which issues the pound, performed much better than the European Central Bank in the aftermath of the financial crisis of 2007 and 2008.

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