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. :)

PMI services data just out - last 52.3 now 47.4

Dh works in inward investment and he says his job is already much more difficult as a result of Brexit.

Interesting spin on the NIESR' latest forecasts from Larry. This from the Telegraph live feed

"The think-tank said swift action by policymakers could help to prevent a prolonged slowdown as it downgraded its UK growth forecast for 2016 to 1.7pc, from a projection of 2pc in May.

Economists said there was still an “evens” chance of recession over the next 18 months.

Simon Kirby, head of macroeconomic forecasting at Niesr, said the UK economy had expanded by less than 1pc in just nine years out of the past 50.

“Seven of those were outright contractions, so this is a notable slowdown in the economy,” he said."

Other papers are majoring on the 50/50 prediction of recession.

Whatwould,

Saw it in the Times very early. Their spin. I take your point, although their central forecast is no recession.

I always enjoy clicking through the papers' (apart from Murdoch press) coverage of a story to see the different spins, though on this one even the Telegraph and Daily Mail (I try to minimise the clicking on that one as it always leaves me feeling a bit dirty) were glass half full. The Times now the lone economic effects denier......

nothing to do with Murdoch helping us get into this mess

Economists said there was still an “evens” chance of recession over the next 18 months.

And this is despite the fact that it's becoming increasingly unlikely that any formal progress towards brexit (ie A50) will occur during this time period.
I wonder to what extent forecasts now factor in the glacial pace of brexit? I know that the city and academia are feeling the chill wind, but tbh my management colleagues (in manufacturing) seem to think nothing much will change for the foreseeable future. The referendum probably put paid to any major new investments in the UK for the time being, but no active steps will be taken to off-shore production until we know when, how and indeed if brexit will happen.

Telegraph: Farmers and rural businesses in limbo amid Brexit cash freeze

"Farmers, rural businesses and charities have been left high and dry by the Rural Payments Agency abruptly freezing payments following the Brexit vote.

Business & community groups that were poised to start work on long planned building projects have been left powerless to proceed after officials were banned from even telling them if their applications had been approved".

Independent: Farmers who voted Leave now regret vote over subsidy fears

"Speaking in a house of Lords debate, John Montagu said many farmers had voted 'without understanding the consequences' and were now in dismay over news that they may not receive the same level of payouts made under the EU's common agricultural policy."

If that is true, that many farmers "had voted 'without understanding the consequences", I don't know whether to laugh or cry.

They're either extremely naive or candidates for the Darwin Awards

Does anyone else detect a trace of Civil Service /Sir Humphrey irony in the continued repetition of the TM speak by a government spokesmen "Brexit is Brexit and we will make a success of it" in response to every damaging delay to EU funding, not just farming / rural but also tech industry to my knowledge......

How I wonder will Success be defined?

Just because some Lord said 'many farmers had voted without realising the consequences' doesn't make it true.
It's unfortunate but the funds that have been held in limbo are for new stewardship and community projects. Any decision made now would mean funding would have to continue after Brexit so the government want to take some time to check that this is the right way to go ahead as they will be liable to continue the funding after 2020.

In Science and tech industries as well as the rural sector where admittedly time might wait a bit longer, this is happening. In the rural sector maybe it closes opportunity down and affects the ability to compete, in tech and svience they can, and, believe me, are moving out.

If that is true, that many farmers "had voted 'without understanding the consequences", I don't know whether to laugh or cry.^

Perfect example of why it's important to be careful what you wish (and vote) for. I have very little sympathy. While a lot of voters might have had very little idea of the benefits of being in the EU, farmers cannot use that excuse.

How I wonder will Success be defined?

From the civil service's point of view, by nudging it gradually into the long grass with as few people noticing as possible.

I too have little sympathy with the farmers, and the fruit picking firms that were in yesterday's news.

Scientific research is already suffering, we knew what we needed to vote for, did so, and when the result didn't go the way we hoped we weren't met with magnanimity but with a crowing 'You lost, get over it.'

Any decision made now would mean funding would have to continue after Brexit so the government want to take some time to check that this is the right way to go ahead as they will be liable to continue the funding after 2020.

This is nonsense. The government can always make a commitment to continue the funding until Brexit actually happens, then review the situation.

Some of the grants were small one-off grants anyway.

So, I see bank rate cut and pound going down again.

I think Carney said he was going to put interest rate up to 3% if Brexit occurred. So yet another incorrect 'forecast'.

Mortgage payment should go down and House prices should go up. Some building society may struggle with 0.25% though.

Brexit hasn't occurred topsy, that's the whole problem.

Interest rates have been cut to stop the economy tanking during this period of limbo until someone works out what the feck to do next- it's not a positive move.

No one believed Brexit would occur instantly. That argument is a straw man.

OK larry, please explain why the BOE cutting interest rates and pumping £170bn into the system to try and prevent a recession is a good thing?

surely you're not suggesting this has nothing to do with Brexit and the lack of certainty around our future?

Bear,

I don't believe I said any of the things you are asking me to argue?!

Rate cut will help asset prices though and aid confidence.

Bear

Yup as Larry said, good for home and asset owners.

Not sure about the 'aid confidence bit' although extra money from mortgage payment reductions could be useful.