Before the UK referendum on membership of the EU last June, plenty of people on the “remain” side of the debate predicted economic doom and gloom if the UK voted to leave.

The electorate chose not to listen and a majority — 52 percent — voted to leave the EU.

Aside from the devaluation of the pound there have been few genuine short-term side effects as a result of the vote, something that many of those in favour of Brexit have used as a stick to beat those who warned of a possible recession.

Instead, it appears that the currency depreciation is helping boost inbound tourism. The number of people who visited the UK on vacation in January increased by 19 percent with spending from all visitors up by 15 percent, according to new figures from the UK Office for National Statistics.

“It is encouraging to see yet again a year-on-year boost in inbound holiday visitors following the Christmas period. The weak pound makes the UK an attractive destination but the government would do well to remember this is just a short-term benefit,” said Ufi Ibrahim, chief executive of the British Hospitality Association.

Given sterling’s relative weakness it is perhaps confounding to see UK citizens continuing to travel abroad in ever increasing numbers. This January saw a seven percent improvement over 2016, while on a rolling three-month basis outbound vacations are up by eight percent.

One reason for this might be because consumers think things are broadly still OK, and when they think things are OK they carry on spending regardless.

GfK’s Consumer Confidence Barometer, which it runs on behalf of the European Commission, held steady at -6 in March, the same as in February and an improvement on -12 in the month after the Brexit vote.

“The -6 for me just reflects that we’re all a bit cagey but we’re Brits so we’re all a bit stoic about the whole thing anyway, it’s sort of a bit stiff upper lip, we’ll go on holiday regardless,” said Joe Staton, head of market dynamics at GfK.

One of the worries is that the current economic growth since 2008 has been built on consumer spending, some of this on credit. This is all fine while the interest rate remains low — currently it stands at 0.25 percent — but when it rises it will have a knock-on effect.

Things are worrying enough for the Bank of England to keep its eye on the level of spending.

“UK household indebtedness remains high by historical standards and has begun to rise relative to incomes. Consumer credit has been growing particularly rapidly,” the bank’s financial policy committee said in a statement.

Tour operator update

TUI Group and Thomas Cook gave trading updates this week and both reported trading in line with expectations. Neither have changed their forward guidance for the financial year.

That’s encouraging, but it doesn’t mean they are out of the woods just yet and leisure analyst Mark Brumby of Langton Capital has long-term concerns, at least for their UK operations.

“Well I think it’s not going to get easier, it’s going to get a bit more difficult,” he said.

He pointed to rising inflation and high levels of consumer debt as reasons for his pessimism.

“People are borrowing their way to the shops, they’re borrowing their way to a holiday… they’re not earning the money they’re borrowing it, and that has implications for longevity — it can’t last forever,” he said.

Brumby pointed to something called Hofstadter’s law, named after American scientist Douglas Hofstadter, which says: “It always takes longer than you expect, even when you take into account Hofstadter’s Law.”

Recent history suggests that it can take a while for underlying economic factors to make their way to the consumer and for this to take effect.

Speaking about the 2008 global financial crisis, Brumby said, “Just have a look at some of the company’s comments because they were blissfully happy. At the time we were over the precipice but you wouldn’t have believed this from the comments.”

Photo Credit: Britain's Prime Minister Theresa May signs the official letter to European Council President Donald Tusk invoking Article 50. The economic impact of Brexit has been limited so far. Christopher Furlong / Associated Press