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. :)

I think people wilfully (I hope) misunderstanding larry need to remember that Europe and the EU are different things and that he seems quite clear on the difference.

Well cote like everything else it will depend upon what is agreed during the negotiations. As I understand it the UK has relatively large armed forces in comparison to other UK countries that is seen as an asset for EU security. That can continue or not depending on what suits the EU best.

Wilful misunderstIng from certain posters is a MN trope.

As is passive aggressively.

Aggressiveness I should say...

Before the Referendum the UK armed forces working in cooperation with European ones was dubbed an EU army and Leavers were howling at the mere concept and demanding that the UK had to leave the EU. Now something similar would be fine because it could be used as leverage in negotiations with the EU.

This kind of thing confirms to me that we'll be negotiating for 5 to 10 years to get back a bundle of deals that in reality will be broadly the same as what we will soon be giving up. After huge cost and years of disruption.

Could we get back to some sort of real world discussion about economic impacts?

It would be interesting to know how quickly the brexiters here think that trade agreements can be negotiated, and if arguing for very quick negotiations, perhaps suggest an example of countries that have achieved quick trade deals so we can assess whether there are any parallels with the UK's situation.

Trade deals typically take upwards of 4 years, often much longer, and the UK may be attempting to negotiate many deals simultaneously, which could mean that resources are spread thin.

This thread hasn't been about real world economic impacts for ages.

It's descending into taunting and misrepresentation of anyone who mentions anything other than how fucked we are.

As someone already convinced of that, I would enjoy it if people who thought otherwise could make their case.

There's been a lot of discussion about real economic impacts, and even some polite disagreement between those of on the remain side, probably because of different perspectives: City people will have a different view compared to those of us working in industry.

How about giving a straight answer to a straight question? (About trade deals).

Why take that hectoring tone?

What straight question wpuld you like me to answer about trade deals?

I don't believe they can be done in less than two years.

But nobody's opinion on the matter is an economic effect.

Whether we have a trade deal, and with whom, has pretty significant economic consequences, no? Particularly for large exporters, like the manufacturing company for which I work. And for the city, which may lose chunks of its business to other European cities.

I would genuinely like the consequences of this to be less serious than they appear to be at first sight. I've spent quarter of a century of my career working for a company whose UK-based manufacturing business could be seriously affected. And a big chunk of my pension is invested in UK funds. I would like nothing better than to get into work on Monday to see sterling gaining, property funds unfrozen, consumer confidence back to pre-referendum levels and inward investment carrying on merrily as before. Unfortunately, wishing for this to be so does not make it so.

Wilful misrepresentation? Passive aggressive? This is the exact quote I replied to:

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

My questions:

(1) What does "contribution to European military spending" means when there is no joint EU force to contribute to?

and

(2) How is UK's military spending going to be a bargaining chip during EU negotiations?

My apologies if all this is extremely clear to some of you but they are not at all clear to me. This is my third post asking these two questions in different words, so it would be great if someone could answer.

Cote,

I answered. If you did not like my answer, I am not rephrasing and rephrasing it until it meets your standards.

It is clear that some posters understood what I said. That is enough for me.

Misti,

'It would be interesting to know how quickly the brexiters here think that trade agreements can be negotiated, and if arguing for very quick negotiations, perhaps suggest an example of countries that have achieved quick trade deals so we can assess whether there are any parallels with the UK's situation.

Trade deals typically take upwards of 4 years, often much longer, and the UK may be attempting to negotiate many deals simultaneously, which could mean that resources are spread thin.'

Yes, but that is assuming you start from no deal. How about we keep the current deals until we have fully negotiated something new. I suspect that all would agree to that.

I know you want to believe the worst but no one wants to fuck the economy for fun.

What does "contribution to European military spending" means when there is no joint EU force to contribute to?

If you realise that there is such a thing as European military spending, irrespective of the existence of a joint EU force, both questions kind of answer themselves.

"I know you want to believe the worst but no one wants to fuck the economy for fun."

I think a lot of the leading lights of Leave Campaign didn't care about anything except getting the UK out of the EU. Michael Dougan was in the parliamentary Committee and said that Ideologues were among the Leave Campaign. I think the important thing to them was to exit, irrespective of the consequences for anyone else. Oh sure. A few 'we'll have the best future because we're the best country in the world on our own' side rhetorics. Nobody will do anything we don't want them to do because we hold all the cards. And conversely, everyone will do exactly the deal we want.

Those with riches off shore or on welfare are not too affected, day to day. Similarly, the flow of money into poorer areas in Northern Ireland won't be missed outside those areas. And people weren't concerned about f**king with that either.

www.legalcheek.com/2016/07/the-day-of-the-constitutional-lawyer-has-come-says-prof-dougan/

Can't seem to get the parliamentary committee meeting itself.

How about we keep the current deals until we have fully negotiated something new. I suspect that all would agree to that.

I think remainers would be happy with that, on the basis that it kicks brexit potentially many years down the road. But politically, how do you sell that, and how do you mitigate uncertainty for the financial sector and manufacturers in the mean time?

Misti,

Ultimately, calm negotiations will mitigate uncertainty. People have very short memories. How has the European sovereign debt crisis been mitigated for companies? It hasn't. It has been kicked to the long grass.

Brexit will take years. There is no other way, regardless of Juncker and Hollande's ideas. Any other way risks fracturing all of Europe. Of course, there is a remote chance of that, as there is of many domesday scenarios, but very remote...,,,

I can't see what would be remotely hard about selling leavers on such a goof outcome as we kerp existing terms until a time of our choosing when we leave.

What's not to like?

Harder would be to sell it to people we are negotiating with, since it so clearly strengthens our position in negotiations.

I'm not sure "calm negotiations" will decrease incertainty - look at what's happened to the EU-Canada deal ...

On the other hand, your observation that

It has been kicked to the long grass.

is probably quite prescient if applied to brexit. If I were a betting person, I'd have some money on this outcome... There was some talk on Twitter about the new cabinet office which is due to look at brexit and come up with (I may be paraphrasing here) some "fine grained and multi-dimensional" proposals. As some wag commented, "fine grained" means three years, and "multi-dimensional" is a multiplier.

doinitfine I happen to agree with you - I think you can probably sell this to most leave voters by simple procrastination: people have short memories. But there are people who think that a delay in delivering immigration controls would lead to civil unrest. I'm not sure where the truth lies: probably somewhere in between.

It still begs the question of what companies do in the meantime. I don't think my employer would invest in new capacity in the UK until our future relationship with the EU is clear; if new capacity is required it'll go to our EU plants instead. Delaying is not neutral.

"If you realise that there is such a thing as European military spending, irrespective of the existence of a joint EU force, both questions kind of answer themselves."

No they don't. There is also such a thing as global military spending. And so?

The point is that when UK exits EU, it will no longer be party to the various cooperative structures that concern the military forces of EU countries. Its military spending will not be to any benefit of EU countries'.

Larry's "we could equally refuse any military co-operation looking forward" is neither here nor there. AFAIK, EU isn't in the business of starting wars (unlike some other countries we know and love), so is very unlikely to need UK's help in this field going forward.

Dream on if that feels better, though.

"no one wants to fuck the economy for fun."

That is exactly what they did, though. Not for fun per se, but for political ambition. Cameron as well as BoJo and Farage. Idiots.

Not just that Cote, but people have fucked their own futures for fun.

All over mumsnet there are people saying things can't get worse. Oh yes they can.

I'm not a Brexiteer but I'm interested in our trade options.

I don't know how long an EEA/EFTA agreement would take, no-one's ever done this before. Does anyone have any idea? It needs the unanimous agreement of the EU states, European Parliament and the 4 EFTA states - that's going to take a while. The Norwegian PM doesn't sound overly enthusiastic about us joining.

As I understand it if we leave the EU completely we would be trading by default WTO rules until we negotiate trade deals.

Our current membership of the WTO is represented by the EU, therefore if we leave the EU we have to renegotiate with the WTO our entire trade portfolio to agree membership terms. That will take a few years. (According to the D-G of the WTO).

The exceptions to the WTO rules are free trade areas such as the EU and NAFTA. We can, in the long run, negotiate our own free trade and lower tariff trade deals, but that will surely take time. As someone said upthread, Canada's trade deal has taken 7 years and counting. And CETA is not dissimilar to the dreaded TTIP in some of its terms.

Alternatively we could negotiate unilateral free trade deals with the world like Singapore & Hong Kong. Singapore started negotiating comprehensive free trade with the EU in 2010, finalised in 2014; with the US in 2000, completed in 2004. This is the lala option as it would decimate UK's agriculture and manufacturing as importing things like food and steel would likely be cheaper than producing them in the UK.

I think we would have to negotiate our UK WTO membership at the same time as working on world trade deals. Without an existing unit of trade negotiators (paying very expensive consultants instead).

So in summary, an EFTA deal - no idea. For WTO + world trade deals, I think we're probably looking at somewhere between 4-10 years.

calm negotiations will mitigate uncertainty

The manner of the negotiations is hardly relevant, as long as it doesn't turn into a row. The length of time is the key.