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'm with Yeeooo, openly optimistic ! We will have free trade deals with other countries in the world we don't at the moment. That will happen. Why wouldn't it?

Of course it will, but you have to remember that it will have to be extremely large amounts of free trade if it is to compensate for a fall in trade from the EU.

Also you have to remember what our current levels of trade are, Australia takes 1.2% of our exports, 60% of our exports go to EU countries or to those with trade deals with the EU.

The Americans said today that they won't negotiate till Brexit is done, other countries won't either cause of the way that the trade deal with the EU will effect them.

Out of Europe in 2019, then we start negotiating world trade deals - which will take I reckon 5 -10 years all in - so we're looking at 2024-29 before we have an idea of the impact of the new trading models on our economy.

Will the Tories still be in power?

I'm not sure why the people who voted to take back sovereignty are so keen to give it to global business interests instead.

I am not sure that Davis et al. are really in charge of Brexit

In truth I don't think anyone is in charge. May is nominally the skipper but her course depends a lot on the strength of Tory factions and uncertain seas. She's certainly not doing the dogwork of Brexit option blueprints. At the moment she's on a PR tour...

I see that Barnier heads Brexit negotiations, that should make things fun.

We already trade with the rest of the world - 40% of our trade IS with the rest of the world. Trade agreements facilitate trade but you still have to compete with the rest of the world and provide the goods and services their markets need at the price they are prepared to pay for it.

We do that very well in certain market sectors, financial services, high tech industries and machinery such as gas turbines, our scientific pre eminence gives us a competitive edge too as does our fashion, especially luxury goods (even if they are actually manufactured overseas, and far more of efforts of those advising British industry on trading activities in countries with different cultural environments are focused on partnerships where the goods are being made there and the branding and marketing done here ), and creative industries, this is where UK PLC makes its money and if that focus has induced an unhealthy concentration of wealth in the South East that has nothing to do with the EU but is the legacy of past UK governments.

However all these niche industries have been put under threat by Brexit because part of our competitive advantage arose from the collaboration with and access we provide to EU markets. What can go wrong is we lose the EU passport for financial services, the highly skilled scientists and techies, the benefits of EU collaboration. I realise that bankers, scientists, London industries generally are the focus for resentment but at the moment it is where we make our money. Most manufacturing can simply be done more cheaply elsewhere in the world, we were already feeling that in the 70s but now we will be competing with the emerging economies, not just BRICS but all the others coming up behind

So tell me without reference to the twentieth century what is going to go right?

Interestingly of that 40%, 15 % is with the USA.

So this means that the "rest of the world" outside of the USA, EU and 52 countries it has trade deals with make up 25% of our trade.

The question you've got to ask yourself is will we be significantly able to increase trade with say Australia who currently take 1.2% of our export trade, enough to compensate for any trade lost from the EU. At best we may double trade with the Aussies to 2.4% but that would be a large and very difficult leap to make. We also have to consider that the "rest of the world" are also part of trading blocs and concessions would be put on them from these areas.

It isn't as easy as its made out, and the "quick fix" solutions are almost all null and void.

I think if New Zealand and Australia can do free trade deals then so can we.

Have you seen the free trade deal that the Aussies got with China ? It took ten years and is still massively more in favour of the Chinese than the Australians, same with the deal they got with the USA which is more like TTIP than we would want.

We can sign free trade deals, but you lot keep going on like its going to be all in our favour, which it won't be. You may start looking at the EU deal and thinking how good we had it.

corcory Australia and New Zealand have economies largely dominated by agriculture and commodities. They have what Asia needs and they looked to the EU to reduce their focus / dependency on Asian markets. They did not want the UK to leave the EU for exactly that reason.

*Most manufacturing can simply be done more cheaply elsewhere in the world, we were already feeling that in the 70s but now we will be competing with the emerging economies, not just BRICS but all the others coming up behind

So tell me without reference to the twentieth century what is going to go right?*

What is going to go right is exports of pharmaceuticals and high tech/ scientific stuff. Home grown boffins and top boffins from all over the world meet at our elitist unis and good things happen. It's just as valuable as mines.

This certainly looks like a pretty significant casualty of Brexit.

How do you connect the closure of bank branches to Brexit?

As Lloyds have cut 9000 jobs since 2014, you can hardly put their shedding of jobs purely down to Brexit . You are clutching at straws Bearbehind

Bear,

If I were a company needing to reduce staff, I would certainly find Brexit s very handy excuse. We have had very low interest rates for years and will continue to have them for a while. It is a hangover from the 2008 banking crisis, intending to boost the economy by pumping up asset prices (which has, at least in the short term, worked).

Banks cannot make money on bank accounts with these interest rates and are also struggling in other areas, hence the need to cut staff.

Don't assume that every time Brexit is cited in a redundancy announcement, that it is the true underlying cause.

Lloyds has been quite clear that this is down to a change in consumer behaviour since Brexit. They are preparing themselves for the cut in interest rates that is coming in August too.
I grow tired of the 'It would have happened anyway narrative'.
I suppose when the next quarterly growth numbers come in and they are down compared to the 0.6 we had last quarter then it won't be because of Brexit either. Get your head out of the sand.

I'm sure those 3,000 workers will be comforted by the fact you think I'm clutching at straws.

Whether it's the actual reason, or an excuse, it's still happening.

It is happening but little to do with Brexit. Look at the metrics of Lloyds. They are unable to survive without radical restructuring.

As it appears that absolutely bugger all has happened/ is happening because of Brexit and would all have happened anyway, one has to wonder what the bloody point of it is.

What is going to go right is exports of pharmaceuticals and high tech/ scientific stuff.

Why on earth does anyone think that a country like India will want our pharmaceuticals, when they have their own home grown industry, and increasingly well educated scientists?

Peregrina,
So are you saying that you want the EU to be a protected global backwater where we overpay for goods and services that can be better and cheaper produced elsewhere?

Otherwise, in the context of Brexit, your post makes little sense.

I would say your clutching at straws Bear, the closing of branches has been going on for a few years, Barclays have pretty much switched over now.

Love the way you put your own construction on things Larry. In my post I don't see a word about costs. Even if we produced pharmaceuticals as cheaply as India, why should they bother importing ours when they can make their own?

you can hardly put their shedding of jobs purely down to Brexit

Seems like the chief executive is happy to use it for some of the cuts:
and chief executive Antonio Horta-Osorio warned that he expects a "deceleration of growth" following the UK's decision to leave the EU." From the BBC website.

I wonder what will happen to him as an EU citizen (Portuguese?)

This is hilarious:
ichef-1.bbci.co.uk/news/660/cpsprodpb/4F64/production/_90542302_express.jpg

The first column of the article says "official figures revealed that the economy is racing forward" which they explain by "GDP figures for the second quarter to the end of June". So, in fact, Britain was "booming" before the referendum .

Therefore, the Express urges, "we MUST speed up EU exit".