Actual economic effects...

[Spinflight]

FTSE closed on Wednesday at 6138. Closed on Friday at 6138.

Long term borrowing rates have come down as brexit appeared more likely, 10yr ones from 2% down to 1.09% post brexit. Similarly all the European long term borrowing rates rose sharply. Lesson? We are a less risky and more credit worthy outside the EU than in.

One ratings agency did drop our credit worthiness, though oddly the last time they did was out of fear of Eurozone contagion. Seems completely at odds with the long term borrowing rates, which matter quite a great deal given our debts.

The pound dropped, quite significantly. It appears however that there was some 'unusual' activity in the market which forced it down whenever the Leave campaign polled well. To the extent of trying to sell it when there were no buyers.

Some people lost a great deal of money, probably dwarfing the millions contributed to the remain campaign, lets hope it was Goldman Sachs and JP Morgan. :)

larry it will be political suicide for the Italian PM to bow to the EU here. I think Merckel will have to fudge something.

It is yet again where I just don't get why people champion the EU. Financial policy and rules spread across several diverse countries?!?! Complete madness!!!

I am sorry to be so ignorant, but does anyone know, does trading under WTO mean that all the banking services will still be possible just with WTO tarifs? Because I am under the impression, that once we are out of the EU, we won't be able to offer certain banking services at all. And with network effects, we may then lose even more banking services as the cluster professional services begins to move away from us.

marg my understanding is that the answer is no. Which is why it's vital that the next PM has a good grasp of financial services!

Tbf though she could influence with her knowledge from the cabinet.

I don't pretend to be an expert on financial services. However stage 1 of my strategy would be to retain free trade with the EU. Otherwise I will be posting about the weak bargaining position of the UK.

I don't thinks it's all or nothing though. I think it will be extremely difficult and complex but we have more bargaining power than is asserted.

Someone pointed out in the media our disproportionate contribution to European military spending. This is a big bargaining chip for the uk.

Yes I agree in one way Rooner because the EU don't want a massive recession. Also I think with migration surely it is bad for the EU anyway if loads of young ambitious people go and live in a non EU country .

But what is the strategy if we don't retain free trade?

"our disproportionate contribution to European military spending. This is a big bargaining chip for the uk"

What "contribution to European military spending"? Is there a joint EU military that I'm not aware of?

It is the bit about the UK being the weaker party in any negotiation.

Whether the UK is the weaker party or not depends on (a) the size of its market versus the country with which it is negotiating and (b) how much it needs a deal compared with the other party. We were discussing deals with major trading parties such the U.S. and China. I think it's fair to say that the UK will be a deal taker in these negotiations.

Haven't checked through he thread so apologise if this has been posted before

inews.co.uk/essentials/news/politics/lush-cosmetics-change-move-much-production-overseas-wake-brexit/

woohoo, we can dominate negotiations with ... with... Caribbean single island nations. Deffo we can get what we want there.

We were discussing deals with major trading parties such the U.S. and China. I think it's fair to say that the UK will be a deal taker in these negotiations.

No it isn't. If we retain free trade with the EU we will be in a very strong position. If we play this situation right there are considerable opportunities for the UK to be stronger not weaker.

Don't forget the EU has found it incredibly difficult to broker free trade agreements with the rest of the world due to the need for all to agree. This makes the EU weak internationally.

Even if we don't have free trade with the EU (which is what I think the goal should be) China needs to export its crap and the Us needs a lot of the expertise in the UK. There are things the UK has to offer. Our biotech industry is very attractive to the U.S. Certain specialist engineering processes are too. Then there is a lot the US wants to export to the UK. If they want to be able to export they need to give us some concessions.

We are really not in a weak position. We are in the top 10 economies in the world. Who doesn't want to do a deal with a significant market?!?

The question about financial services is interesting. It depends on the sector. In the retail banking side we have an opportunity to get rid of some of the onerous regulation which is EU based. Credit swaps on the other hand are regulated by global standards and agreements.

The UK biotech industry was seriously worried about Brexit earlier this year. Read this letter in the Financial Times. www.ft.com/cms/s/0/e1ba8974-d981-11e5-a72f-1e7744c66818.html#axzz4DuoI3LQA

"onerous regulation" sounds like the sort of thing that prevents the houses of cards that are debt consolidation loans and credit default swaps (which caused the 2007-08 financial crash). And all the other products I can't even understand but sort of described in the movie The Big Short. Silly me to think regulation of financial services might be a good thing.

I'd like to read it but have to subscribe to FT to do so.

Damn! Searching for the letter with Google I could see it but the URL doesn't work. There's a rundown and further comments from the CEO here www.fiercebiotech.com/financials/brexit-risks-serious-side-effects-for-u-k-life-sciences and I hope this is accessible.

Are there any examples of trade deals that were worked out between 2 countries in the top... ? 30 for nominal GDP, that took less than 2 yrs of negotiations?

Cote,

news.sky.com/story/would-brexit-harm-eus-most-powerful-military-10318536

A few clues why our army/nuclear capability is and will continue to be of importance to Europe.

So what, you Googled EU UK military and posted the first link that came up?

You said: "our disproportionate contribution to European military spending. This is a big bargaining chip for the uk"

What does UK contribute to European military spending? Is there a European military anyway for UK to contribute into?

Yes, UK has a military. And yes, it's sizeable, compared to other European countries'. How is that going to be bargaining chip when UK is out of the EU?

UK out of the EU means that UK's military is no longer part of EU's military force. How do you think you can spin that for bargaining power?

Cote,

Well luckily you are not a negotiator as you assume the outcome ahead of the negotiation.

The EU from time fo time wants to respond to situations with force. If we agree to help then they have a lot more options. If they decide to 'punish' us in trade, as per Juncker or Hollande's ideas, we could equally refuse any military co-operation looking forward, unless it was directly in our national interest.

A negotiation can include anything a negotiator decides to put on the table.

I

I'm not assuming anything. Just asking you what you are talking about when you say UK "contributes" to EU military and that is a bargaining chip.

There is no such thing as EU military, so UK can't possibly contribute to it.

And anyway when UK is out of the EU so is its military spending. How is that a bargaining chip?

Do explain. I'm interested to hear your reasoning.

What does UK contribute to European military spending? Is there a European military anyway for UK to contribute into?

You didn't actually answer that, did you Larry.