AFTER Britain voted to leave the European Union on June 23rd, financial markets took fright. Sterling lost one-tenth of its value in two days of trading. The FTSE 250, an index of domestically focused firms, fell by 14%. Remainers predicted that Leave voters would soon suffer from an acute case of buyer’s remorse. Yet as the summer has worn on, the mood has changed. Companies have not fled Britain en masse. The pound has stabilised and the FTSE 250 is up on its pre-referendum level. Polls suggest that few Brexiteers regret their vote: indeed, many of them now argue that the pre-referendum doom-mongering was overblown, and some even detect the beginning of a “Brexit boom”. What is the reality?

Some of the gloomier pre-referendum forecasts ignored the possibility that the authorities would respond to a Leave vote by propping up the economy. In the event, the Bank of England loosened monetary policy six weeks after the referendum, a widely anticipated move that nonetheless boosted confidence. The new government of Theresa May quickly made clear that it would tone down the fiscal austerity of its predecessor.

Nor did wonks foresee that Brexit would take so long to get under way. During the referendum campaign David Cameron implied that Britain would begin the process of withdrawal from the EU immediately, in the case of a Leave vote. Instead he left the job to his successor. Mrs May has said negotiations will not begin until 2017; only on August 31st did she convene a cabinet meeting to discuss the broad shape of Brexit. Bookmakers reckon there is a 40% chance that Britain will not leave the EU before 2020. Those who are pleasantly surprised by Brexit’s consequences should bear in mind that it has not yet happened.

Still, in the short term the economy seems to be faring better than some economists had predicted. Consumer spending appears to be healthy. In July retail sales rose by 4% compared with the year before. But the fact that they grew by the same amount in September 2008, the month that Lehman Brothers collapsed and thus precipitated the global financial crisis, should give pause for thought. Consumers do not immediately internalise bad economic news: the man on the street is not thinking about Article 50 of the EU treaty as he enters a shopping centre. And more than half of Britons clearly never saw Brexit as bad news in the first place.

For a better gauge of the future of the economy, look at the behaviour of companies. Before the referendum, economists’ main worry was that firms would hold back on expensive, hard-to-reverse decisions while Britain’s future relationship with the EU was sorted out. The two big questions concern jobs and investment.

Growth in business credit has markedly slowed. The Bank of England’s latest survey of business confidence indicates that planned investment is being reined in. In July the value of contracts in the infrastructure industry fell by 20% compared with June, based on a three-month rolling average, according to Barbour ABI, a consultancy. As businesses hold back on investment, productivity will slow and, with it, wages.

Data from Adzuna, a job-search firm, show that in July wages and vacancies fell compared with June. (A higher rate of inflation linked to the weak pound is eating further into real earnings.) The number of advertised low-paid and contract roles has grown, as employers seek to plug gaps without committing to permanent hires. The Economist’s model analysing Google searches for “jobseekers”, which is correlated with official unemployment back to 2004, suggests that unemployment is now around 5.3%, higher than the official rate of 4.9% last recorded for April-June.

What of exports, which Brexiteers forecast would soar following a fall in the pound? A survey of manufacturing firms on September 1st showed strong growth in sales to places like America and China. Yet hopes of an export boom should be tempered. A high proportion of exports’ content is made up of imports, which are now pricier. And British exports compete mainly on “non-price” factors, such as quality and customer service, making them insensitive to currency fluctuations. When sterling fell by a similar amount in 2008-09, net exports barely responded.

Britain now hopes to avoid entering recession, as many, including the Treasury, forecast before the vote. It partly depends on what Philip Hammond, the chancellor, announces in his autumn statement, a mini-budget due later in the year. To support the economy he will have to loosen the current fiscal plans considerably. His predecessor, George Osborne, pencilled in a reduction in the cyclically adjusted budget deficit in 2017 of about 1% of GDP, a sharp contraction even by the standards of recent years. Mr Hammond could help by cancelling this austerity. He is likely to announce a round of spending on infrastructure (see article).

Such policy decisions may yet fend off recession. But deploying a fiscal boost would not be costless, with Britain’s public-debt-to-GDP ratio already running at 84%. Nor is ever-looser monetary policy, given the damage it does to pension funds. And consider the counterfactual. Before the referendum many economists had predicted a boost to growth in the event of a vote for Remain, as a big source of uncertainty was removed. The Bank of England had forecast growth of 2.3% in 2017, but now expects just 0.8%. Following the vote to Leave, the government and the bank have been forced to use monetary and fiscal policy just to try to keep growth in positive territory. And Brexit itself, of course, is still to come.