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. :)

10/15

I don't think it would be impossible to negotiate a reasonable exit deal from the EU. But the idiots Davis and Fox seem to be out-of-touch with reality. Davis seems to be assuming the EU will just give everything it wants regardless of their own interests. Why would they do that?

Excellent article here from the Observer explaining what other EU countries want from Brexit deal:
wwww.theguardian.com/politics/2016/jul/23/eu-brexit-theresa-may-free-movement

1. An EEA type deal would mean we would have to implement EU leglislation as national law. Norway has some 600 articles of EU law. But we would have no input into those laws, unlike now.

A TTIP deal with the US and Canada gives their authorities and companies input into our consumer and environmental legislation.

That does not equal 'governed within the U.K'.

1. Timescales are precisely nothing to do with the EU. Simply the length of time it takes to conclude world trade deals.

1. The US subprime mortgage disaster and its consequences had a devastating impact on the UK and the global economy. Conditions in Europe affects us whether we're in the EU or not.

Cameron agreed non-involvement in 'ever closer union' back in February.

A TTIP deal with the US and Canada gives their authorities and companies input into our consumer and environmental legislation.
That does not equal 'governed within the U.K'.

Ah no, but they speak English, so are the same as us really, so we can pretend that they do. Not like being governed by those Johnny Foreigners the krauts and the frogs!

Australia has just signed a trade deal with China that took 10 years to negotiate. Nothing to do with the EU.

If we go along to China wanting to get a trade deal in the bag in a hurry and in a fixed time frame, say before the end of Article 50 negotiations or before the next election, the Chinese will rub their hands with glee and then absolutely flay us alive.

Before anyone links to this:

www.bbc.co.uk/news/business-36877573

just bear in mind it's simply PR. This evening I've been exploring what I'll do with my Euromillions winnings. I've never bought a ticket but I can explore to my heart's content.

From that China free trade article "It will be the first time the UK has embarked on such a major project with the second largest economy in the world."

Indeed it is. I wonder how well we will do?

I don't know a great deal about the China Australia deal - but given Australia has a huge mining industry, wouldn't that give them a slightly different balance of power in negotiations?

Anyway, the FT has helpfully put together a list of economic effects, although acknowledge that the data isn't yet available to form a full picture. next.ft.com/content/908a0d30-500b-11e6-8172-e39ecd3b86fc

I don't know a great deal about the China Australia deal - but given Australia has a huge mining industry, wouldn't that give them a slightly different balance of power in negotiations?

Indeed.

Australia is also a major hub for financial services in the Asia-Pacific region.

What else has the UK got to offer China?

Higher level education. They love that. Oh, hang on, "tens of thousands" of immigrants only. Bugger.

I've got one! Scenic backdrops for wedding photos! source (I think a number of couples have outtakes with me puffing along in the background on my morning jog.)

Timescales are precisely nothing to do with the EU.

I read a blogpost recently (posted in another thread) written by a Canadian trade adviser that explained the reason the EU/Canada deal took so long was not the EU, but mostly Canada and its weird constitutional structure

news.cbi.org.uk/news/manufacturing-prospects-muted-after-brexit-cbi/

Wow, always thought the indie was a respectable paper! Such a hysterical headline based on one piece of data, which may be radically revised anyway.

Sadly larry its backed up today's CBI surveys taken after the vote.

The independent is a respectful newspaper. That's the point.

Respectable!

Sad but true, the article paints a picture no worse than predicted by experts, so this can't be a shock, I'm sure.

www.tradingeconomics.com/united-kingdom/manufacturing-pmi

It dipped to nearly 45 in 2012/2013 and there was no recession. It dipped to near 35 in 2008! We need to see a series to put too much weight to it. The link above allows you to see a 5 or 10 year chart.

The Torygraph had an article last week "how to Brexit proof your pension". Even with the pro Brexit papers the cat appears to be out the bag.

In 2012/2013 the economy did contract though, in two quarters, the thing that rescued 2012 from a technical recession was the Olympics.

In fact there was a recession reported in 2012, in Q3 and Q4 which was only changed when later data was added, so very low growth and negative quarters in Q1 and Q3 with very nearly a technical recession.

2012 was also the year of the omnishambles budget, it wasn't a great year economically

Agreed, but there were 5 sub 50 pm numbers in a row, not one before revision. A few numbers taken straight after a shock ( and it was a shock regardless of one's long term view) are not a good forecast of the future. Things like a high employment level will allow people to continue to spend. I think the Indie's headline was quite irresponsible.

Yes the Indie's headline was irresponsible and sensationalist. I suppose it's what a lot of people want to hear. People love drama and financial armageddon livens up the dry and dusty financial pages.

I am cautiously optimistic and think May and Hammond are sensible enough and experienced enough to deal with the economic shock of Brexit by providing the necessary stimulus to the economy - in order to prevent a recession.

If people want to believe sensationalist financial disaster pieces that's their choice. It won't help them make money or run their businesses though. I prefer to read people like Larry Elliot the Economics Editor of the Guardian who (unlike most of his colleagues) has been balanced about Brexit from the start:

www.theguardian.com/business/2016/jul/24/brexit-offers-key-opportunity-to-reboot-uk-economy

Larry Elliot is over optimistic and has a pro brexit book to sell I'd hardly say he was balanced but mostly I just disagree with him, Paul Mason and many others at the Graun do to ! His article there basically suggests below 0 interest rates, and big programme of government spending in order to boost the economy, which may work, but haven't worked in Japan using the "abenomics" model he discusses. Sorry to burst that bubble.

The data the Independent used was widely reported and matches the data from the CBI and Deloitte's independent studies that have been published. It isn't irresponsible, firms are genuinely worried.

A big push for public spending and bringing jobs to the regions would quell a lot of people's fears, and might make them realise that their beef wasn't with the EU, but I just can't see it happening with the current Government.