Well, that went well

The weekend

The World Egg-throwing Championship took place on Sunday in Sleaford, Lincolnshire. Great Britain won the toughest team discipline; the Static Relay. Elsewhere, as a metaphorical and more anarchic version of the same event was playing out in Westminster, Great Britain was not looking so good.

At the moment when teamwork and leadership were demanded, politicians on both sides were playing pass-the-parcel and insisting "It wasn't me!". Boris was playing cricket, Dave was in Cleethorpes, Mike was arranging his collection of QPR memorabilia and Gideon was wringing his hands in seclusion. Over in the red corner, shadow cabinet ministers were enjoying a jolly game of fratricide, with Jeremy playing It. 

Eventually this morning the chancellor came out of hiding to reassure the world that he had, after all, a contingency plan for Britain's exit from the Euro Zone. Well, a sort of contingency plan anyway. The sort that isn't ready to be revealed quite yet. But it does not apparently include the punishment budget with which naughty voters had been threatened during the campaign. Mr Osborne's reassurance did not do much for sterling.

The Black Friday

Investors' initial reaction to the referendum result was dramatic. Cable took its biggest ever one-day hit and two hours before London opened the pound was an average of -7.4% lower on the day against the other dozen most actively-traded currencies. Share prices around the world fell. 

Had the referendum taken place a couple of weeks earlier, when the opinion polls were pointing to Leave, the damage might have been less. However, in the days leading up to Thursday's vote investors had convinced themselves that Britain would vote to Remain. So it was not just speculative selling that followed the result, it was a wholesale reversal of sterling positions by investors who were long and wrong.

Things calmed down during the London morning (if the prime minister's defenestration can be described as calming down). Whilst there has been a downward bias to sterling over the weekend the pound's only real losses since Friday morning are to the Northern Scandinavian crowns. It is up by a quarter of a US cent and two thirds of a Swiss cent.

The post mortem

By all accounts there will be no quick fix. Nor is what remains of the government in any haste to press the Article 50 button. Presumably the hope is that as long as nothing actually happens, Brexitwise, markets will calm down and get on with business as usual. 

That might even happen: After all, investors are as subject to panic-fatigue as anyone else. The headless chicken stage cannot go on forever. But the end of hysteria and the return of optimism are not the same thing. It is far too early in the process to look for a sterling rebound.

The whole unfamiliar Brexit process is beset by uncertainty. No country has ever *xited before (Greenland's departure preceded the Lisbon Treaty). Expect more downside for the pound.