Martin Flanagan: City bigwigs prepare for grilling by MPs

As we know, 'experts' are much out of fashion, even if, as I suspect, the pendulum has swung too far the other way from slavish respect to kneejerk dismissiveness.

London Stock Exchange boss Xavier Rolet faces a grilling from the Treasury select committee. Picture: Jayne Emsley
London Stock Exchange boss Xavier Rolet faces a grilling from the Treasury select committee. Picture: Jayne Emsley

Today, three of them from the financial world face a grilling from the Treasury select committee about their gloomy public forebodings ahead of the Brexit vote last summer.

Critics say the financial services industry – accounting for 10 per cent of UK GDP – had a vested interest in proclaiming doom ahead of that vote in order to foster a climate whereby the UK government would prioritise the sector in any post‑Brexit negotiations with the European Union.

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In the dock will be Douglas Flint, the Scots-born chairman of HSBC, London Stock Exchange boss Xavier Rolet and ­Elizabeth Corley, vice-chairwoman of fund manager Allianz Global Investors.

Rolet had warned that Brexit could lead to an “implosion” of the single trading bloc, and the UK risking losing 100,000 jobs if it lost the European clearing industry, while HSBC said at one stage that it could move 1,000 investment banking staff from London to Paris if the UK quit the EU. However, Flint said after the vote that action would only be in “extreme” circumstances.

In a rare example of the Treasury committee being beaten to the draw on a soundbite, the Bank of England’s chief economist said last week it was a “fair cop” that the Bank had got its more gloom-­laden forecasts wrong given the robust way the economy has performed since the Brexit vote, and that the forecasting business in general was “in crisis”.

MPs will no doubt do the second best today by putting Andy Haldane’s comments to the financial services industry trio before them. Their likely response to any suggestion they deliberately overcooked the pessimism about a Brexit vote is that they called it as they saw it at the time with no self-serving purpose (the opposite would be a cracking story).

Flint, Rolet and Corley will acknowledge the decent performance of the UK economy in the second half of 2016, but I believe it will stop short of any acknowledgement that everything is now OK. The damage to the UK could still be substantial but cumulative, medium-term rather than overnight, the defendants may say.

My prediction for today’s clash? A no-score draw.