Actual economic effects cont...

[ManonLescaut]

Telegraph: Britain could be up to 70 billion worse off if it leaves the single market IFS warns

The respected economic think tank said that Britain could enjoy an extra 4 per cent in national income if it remains in the single market, equivalent to two years worth of growth.

The report claims that while leaving the EU will free the UK from an estimated £8 billion a year of budget contributions, the loss of trade from Brexit could hit tax receipts by a larger amount.

It found new trade deals would be unlikely to make up for lost EU trade, which accounts for 44 per cent of British exports and 39 per cent of service exports.

Telegraph: Treasury looks at quitting the single market

Officials say the talks have revealed a willingness among some top figures to scrap passporting despite early calls to stay in the single market from some quarters...

Mr Boleat cast doubt over the UK’s ability to secure a Norway-style deal to remain in the single market. He said accepting free movement of people and paying large sums to Brussels while accepting its rules would not be politically acceptable.

The BBA wants the UK to leave the single market but retain unimpeded access to EU markets.

smallfox2002

"Oh BTW, lovely to see that you brexiteers will use expert opinion when it suits you. "
Not at all. I ignore them almost completely when making decision as stated before. It was solely quoted for your benefit. Unless of course their opinion only counts if their views happen to agree with you.

It doesn't matter whether you win or lost your argument and whether those mass office moves were true. I am happy enough that recession is cancelled.

I agree with them, I don't think there will now be a recession this year. Both the delay to article 50 being declared, BOE stimulus and the impact of higher orders from abroad due to the low pound mean that this will be averted.

Like I said, by end of this year/early next year when inflation increases we will see a different impact. The low pound still indicates that this is going to be difficult and may not end well.

Further, the noises made by Japan, mean that future investment may be sent elsewhere which is worrying. As are the uncertain statements coming out of government.

So you don't like experts, but you'll use them to try to make a point but still discount them? The lady doth protest too much.

I would also be delighted Topsy, if there is no recession. Although less promisingly, from that FT article:

Many economists have been revising their forecasts up in response to the latest data, but almost all still expect the UK economy to perform worse after Brexit.

In the latest Treasury survey, the average independent economic forecasts for total growth over the 2016 to 2020 period were 3.3 percentage points lower than those in May.

I'd echo Smallfox in that there has been nothing happening so far, beyond a drop in the £ and a huge market stimulus by the BoE. We are in a precarious position, the BoE haven't really got any levers left to pull if things do get worse.

Me too. I guess none of you Brexity Pollyannas were worried by the comments from Japan this week.

Nope

You weren't worried by the comments from Japan?

You think we can do without the investment?

Actually, perhaps a fuller picture from the Credit Suisse economic update referred to in that report. Summary: "We dunno, worse, but but not as worse as maybe we thought, but we really dunno yet"

In the UK, resumed political stability, a weaker currency and the Bank of England’s policy response look to have stabilized activity after confidence fell sharply in the wake of the vote. That may be sufficient for GDP to avoid a modest contraction. But indicators are consistent with relatively weak growth, of around 0.5% annualized. And we would expect this weakness to persist into 2017. Brexit will probably sustain firm headwinds against the economy. We believe uncertainty over the UK’s status in the single market will constrain corporate spending and hiring, and weak labour incomes and higher inflation will constrain household consumption. As such, we do not expect the economy to speed up materially next year

The uncertainty around our UK forecasts remains high, and there are material downside risks. Business behaviour may prove sensitive to the UK government’s activation of Article 50, especially if the negotiations that follow point to a loss of membership of the single market. On the basis of our revised forecasts, we now do not expect a further rate cut from the Bank of England until H1 2017, when it may become apparent that the recovery that the Bank is forecasting in 2017 has failed to materialize.

Anyway, I think perhaps the biggest impact which we have yet to see, is the impact of decisions being made in other countries' favour as Britain is a riskier place to do business than before. This will be the opportunity cost of Brexit, and it may not show up in any figures at all.

Please tell me everyone was a little worried by the comments from Japan?

I was worried, it puts one of our major export industries in jeopardy.

Even Arron Banks seemed a little worried by the Japanese letter. In response, he tweeted that "Sky [News] need to fuck off" before lurching into a delightful stream of tweets on Muslims, forming a trading bloc with Australia and NZ, and WWII. I think the whole thing put him rather out of sorts.

Nightofthetentacle

I think you can summarised it even more succinctly to "we really dunno, we just type some numbers in the XLS spreadsheet and then pretend that we know a lot".

smallfox
I don't discount them. I just pay no attention to them whatsoever but I thought you might be interested and so I highlighted the news for your benefit.

Japan - oh no. Not worry by a bit. Just the other day they were asking to buy amphibious assault from BAE system to protect their turf in South China Sea. Before Brexit, there was a senior Hitachi manager threatening to review their investment in the UK when their single largest rail customer is the British Government.

I am slightly worry about the financial service passporting stuffs, but nothing to lose sleep over.

But Hitachi can still build trains and then we can import them, otherwise the only choice is Canadian owned Bombardier.

The Japanese may still buy from us, but the car industry is likely to locate future investment in other parts of the world if EU access isn't guaranteed.

BTW futher up thread I pretty much predicted that growth would remain low.

So you highlighted for my benefit, to give your argument weight, which is the reason we use expert information in arguments? Then you say you ignore them.

Yeah right.

The point is it's not just Japan. Most foreign investors are here for access to the single market. If that goes, they are not going to hang around for long.

If you are not worried about this you are a bit delusional.

smallfox2002

No. I ignore them. You are however free to take them into account when making your plans. We live in a freeish market.

I think if I were Mark Carney, at this point I would be extremely tempted to tell the uk to go fuck itself, before getting on the next plane back to Canada.

Nope, you used expert information to back your statement "recession cancelled".

If you ignore them you wouldn't have even bothered to read it, but relied on your own convictions.

Can anyone remind me what percentage of world trade the European single market actually is? Is must be massive for all the worry about access? I mean obviously we will access it if even by WTO agreement but still.

I remember it was 30% of world trade back in the early 80's, I assume such a successful, well ran super power of a trading block that we simply must remain part of or face extinction has grown from that!?

It has grown in real terms, but the amount of world trade has also increased, so the percentage has fallen.

Doesn't mean to say that the EU is failing though, maybe you should listen to some experts rather than Daniel Hannan who repeatedly uses this piece of data, and does so incorrectly as you just have.

I'll put it simply, the percentage of the pie has got smaller, but because the size of the pie has grown the slice is bigger than it was before.

I mean since the 80's the EU has actually added a load of full countries to its ranks, it must have seen epic growth as share of world trade!

Of course share of world trade matters, especially in the context of brexit! We are discussing how valuable free access to the single market is and what we should ultimately pay for said free access, the answer is around 10% ...... the question is, is it worth giving up political independence, £9bil and open borders to 435million people to access this small proportion of world trade at slightly better rates than would be afforded under WTO conditions.

The EU is shrinking in importance in global trade, it has many problems from perennial economic stagnation, migration crisis, youth unemployment and many unstable countries and looming banking collapses, even tomorrow the ECB will yet again announce how many billion they will again pump into the European economy to try and keep it afloat for another while, watch the euro slide to the pound tomorrow as investors understand this won't be a long term solution.

Now there are also positives for leaving the EU, we can now trade with the other 90% of the world, actual growing economies without having to worry about the demands of 27 other countries and their own self intrest. Imagine that, the uk is being global and outward looking here, not happy to stay a member of an isolated wee club that frankly needs to threaten and bully members to stay part off, like an abusive husband saying "you'll be nothing without me, I'll do my best to financially cripple you if you leave me"

To be clear, the EU has seen it's share of world trade shrink from 30% in the 80's to around 10% after the UK leaves while adding a load of countries, there is a massive world out there, we don't need to give up so much to access such a small and ever shrinking market, without the UK the EU, if you add all 27 countries economies together, is not even the largest economy in the world anymore, America and China are both alone larger economies, and we already export more to America than we do to the EU.....

No we don't export more to the US than the EU. Less than 15% of the UK's exports go to the US; the percentage to the EU is 44%.

I would love to know what it is that we do manufacture still, and that we could increase the production of to export.