Brexit and anti-establishment politics: The Out vote was the first great thwack against the status quo

Annabelle Williams
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The unintended consequences of monetary policy are driving populist politics - and it threatens us all (Source: Getty)

A groundswell of disenchantment with ruling elites across Europe is threatening to destabilise the region.

There were 35 separate calls for referendums from alternative parties in the EU in the 24 hours after the UK’s Leave vote was announced, according to the European Council on Foreign Relations, although not all were explicitly about exiting the union.

Statistics such as these give the impression a party popper’s gone off, but sympathies towards the alternative have been simmering for a long time. Remember the chill that swept Europe when far-right leader Jean-Marie Le Pen came close to the French presidency in 2002. Hungary’s been teetering on the cusp of a one-party state since 2011.

It’s anti-establishment parties which will drive politics across Europe now and, with the popularity of Bernie Sanders and Donald Trump, in America too. Whether or not they’re elected is immaterial. Their swelling ranks of followers are enough to shift the parameters of acceptable debate in their favour.

Read more: What would Trump do to America?

But alternative parties’ calls for import tariffs, protectionism and a clampdown on free movement present a fundamental challenge to the basic principles of globalisation and free trade. These notions formed the foundations of the global settlement in the post-Cold War era.

Whether far left, far right, nationalist or simply presenting an “alternative” to the mainstream, the parties growing in prominence are a serious threat to the integrity of the state, and the stability of the global order.

There's a danger in calling these parties 'anti-establishment', as that makes it harder to question the establishment. Their growing prominence means they're increasingly mainstream. But Brexit remains the first great thwack to the establishment's status quo, and there'll be many more to come.

At street level, voters bitter about falling standards of living and the seeming impossibility of getting ahead see no alternative. Despite the “we’re all in this together” rhetoric of austerity governments, bad behaviour at big business has continued unabated.

Banks have been frequently reprimanded for mis-selling and market manipulation, while multinationals continue to dodge tax. For them Brexit is an inconvenience, but they too have played their part.

The burgeoning anti-state movement is a riposte to the age of inequality. Perversely, it may be an unintended consequence of the Bank of England’s (and others’) attempts to soothe the economy in the aftermath of the financial crisis. The flagship QE programme reflated assets, and then some.

It’s created price bubbles in everything from bond markets and biotech to, crucially, that most essential of assets, housing. Those with financial assets have watched their wealth soar.

It’s hard to fathom now, seven years after the Bank started printing cash, that QE is experimental, unconventional policy, the effects of which weren’t fully understood.

Read more: More unconventional monetary policy is coming, experts warn

The warping of UK property prices, fed by the billions of printed cash that has found its way into the most coveted of assets, means in London even the comparatively well-off feel the pinch.

There’s the seeming health of the economy, reflected in the warm glow coming from satiated markets, but a niggling sense that living standards, wage progression, the stuff that matters to everyone, isn’t quite how it was. Today it’s not just Joe Public that gets this, it’s many of us.

This article appears in City A.M's Money magazine, out on 14 July.