Actual economic effects...

[Spinflight]

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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. :)

The problem is what happens in those intervening years. A decade is a long time.

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.

LOL

Just like they don't rely on the US's help, you mean?

*I don't know how long an EEA/EFTA agreement would take, no-one's ever done this before.

By which I meant negotiated out of the EU and over to EEA/EFTA, not joining EFTA.

Delaying certainly isn't neutral.

But I think right now it is a mercy we are having a summer break from it all for a month or two.

So much of our negotiating position relies on timing. People who want to race to invoking article 50 are foolish IMO.

As Manon and smallfox said, the problem time. Already, planned investments are paused or being diverted to mainland Europe.

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

That would be ideal but I think it's unlikely. At a guess it would take around 4 years to sort out EEA/EFTA deal - so we may have some overlap. But the EU don't owe us anything.

I reckon it would take so long to negotiate WTO model plus that we can't expect to keep our current EU trade agreements for that length of time. Presumably only for the 2 years it takes it withdraw from the EU (whenever that process is started).

The head of the WTO said we'd have to start from a no deal point.

Manon,

It is not a case of the Europeans owing us. It is a case of suddenly losing one of their biggest export markets and Driving them into a painful recession.

As I said up thread, if you look st the euro/gbp move since the referendum, we could probably absorb duty and sell at current euro prices. On the other hands mercy and bmws would go up 15-20% in gbp terms.

... and Farage shouting at them to say they were all useless prats.
...And other folk saying they eagerly look forward to the collapse of the entire EU project ASAP.
Or is it just me who thinks those attitudes might also have created some bad feeling?

A lot of people are saying a lot of things.

This is the public pre-negotiation phase.

There will be private conversations happening too that we will never be party to.

The EU initially tried to bluff us into invoking article 50 immediately.

They also said we would have to negotiate to leave for 2 years and onky then negotiate a new relationship.

Nobody's talking about that any more.

The head of the WTO said we'd have to start from a no deal point

Yep, I mentioned that in my longer post.

He also pointed out that on EU exit, before negotiating its own free trade areas, the UK will lose the preferential access deals with 58 countries through 36 trade deals negotiated by the EU. By WTO rules UK would have to impose higher MFN tariffs on imports from those 58 countries, while they'd have to impose their own tariffs on our exports.

WTO analysis indicates a cost to British consumers during this interim at £9bn on goods imports & £5.5bn in tariffs added to British exports at the destination country.

Ah ... but people will still buy beamers and mercs at 15% more.

People will still buy most products we import from the EU with a price hike.

People will still buy our manufactured goods but the issue will be around UK financial passporting and the importance of the financial and service exports.

Most countries have their own Eurosceptics in the EP.

Nobody is going to give much of a shit about Farage.

Johnson's nazi comparison made the idea of him as PM negotiating brexit ridiculous.

But he's not.

Most of the bad feeling has been caused over 40 years of the UK being a general pain in the arse.

And yet still they dealt with us on favourable terms to us.

smallfox Of course the head of the WTO would say that. They don't want us to leave the EU. Doing so creates less stability in the EU and the cost of debt is going to increase for the EU making it harder for Southern Europe to manage what is left of their economy.

No I think in this case it is just sound advice.

You can't just piggy back on deals that have been already done,

Going to the WTO means negotiating a deal you are happy to give all 160 countries, you cannot give preferential deals.

It will take time

It wasn't advice.

It was a threat.

How credible a threat remains to be seen.

But everyone is negotiating already.

larry

As British exports to the EU were 13% of GDP in 2014 and EU exports to Britain were 3% of GDP in 2014, they're in by far the stronger position.

The news on passporting is depressing. Theresa May announced that Brexit will mean 'control of free movement'. I've no doubt passporting is dependent on that. Perhaps she believes she can pull off the impossible, but it implies she's ok with limiting single market access.

Hollande has been clear enough that France is ready to nab our trade. And I notice Jamie Dimon thinks the EU may not accept passporting as it is: "it will put more conditions on the U.K. and might force banks to become smaller in London.”

Here in Paris they're certainly looking at tax breaks for foreigners, tax breaks for financial services and fast process of applications.

I'd say it was more of a warning than a threat.

^That was to DoinItFine

Oh whatever, the chair of the WTO did not threaten the UK. Actually he said that it was more complex than people were making out. Its funny how anything other than positive information is perceived as a threat.

People aren't negotiating anything yet, informal chats may have been had but there is no period of negotiation started.

We certainly haven't opened WTO negotiations because we haven't sorted the EU trade ones yet and they would influence the WTO deal offered.

I agree with you smallfox, I think it was good advice. I think the UK needs to be warned of the reality facing it.

Certainly negotiations have nowhere near started.

Look at the history of WTO directors. If they have come from Europe they have been heavily involved with the EU and or socialist political parties.

Whatever the WTO says if take with a grain of salt and that comment is a threat IMO. They are speaking on behalf of WTO members and I am quite sure they are protecting the interests of the EU more than the interests of the UK because the EU is potentially their next place of employment after their 4 year term is up.

www.theguardian.com/business/2016/jul/09/gloom-gathers-over-the-uk-economy

Also we have the 5th largest economy in the world. Other countries will want to access it, especially the US, China, India and Japan. From when I worked on the trading floor, a lot of trades executed in London were for non EU clients. European pension funds predominantly went through Frankfurt and their own exchanges due to the currency. That isn't going to change.

If banks want to save on headcount cost they are going to outsource further to India. Far cheaper and better educated than what is offered in Europe. The French moving banking jobs to France doesn't surprise me. Their banking operations in London are tiny anyway. I will be shocked if CSFB will exist in it's current form two years from now. Per newspaper reports from Q1 this year they are losing money hand over first. Soc gen has never been a powerhouse and I can't think of any other French banking operation of note that might cause any issues.