Brexit consequences

[Spinflight]

Can't find the old one, despite a search. Hence a year on...

I started it to compare the doom and gloom predictions from people who should know better, especially the treasury, to actual observable facts.

Thus far the treasury predicted our borrowing costs would soar by over 130 points. In fact they're down about 100.

No trade deals possible before (I forget the date they said, was far in the future though) compared to actual negotiations beginning with the USA later this month with the president firmly behind them. Canada, New Zealand, Australia, India, South Korea and several others I've forgotten have shown a great desire for a deal quickly.

Ftse 100 and 250 are well up, just shy of 7500.

Best of all from a macro economic perspective is inflation touching 3%. When you are £1800 billion in debt rating that away with inflation is far preferable to actually paying it off.

Growth has dropped a bit, though nowhere near the instant recession that was predicted. Bit early to say though this is likely due to the referendum.

External investment is actually nicely up, with several major companies announcing various large commitments.

Things could be rosier, though it would be a struggle to describe them generally as bad, quite contrary to 'informed' opinions. Even the oecd recently ate their pre referendum words.

Well as a minority of economists predicted no change in 2016, less than 36% of them, it doesn't strike me as being a strong case you've made. Though clearly I'd have to read the entire article.

As you've highlighted this one part..
Fulcrum Asset Management, was typical in saying, “the referendum will not make any major difference to 2016 views. However, a No vote would lead to a sharp drop in growth in 2017, due to political uncertainty, worries about Scotland’s status inside the UK, an upheaval in the financial services industry, and a major drop in inward capital flows into the UK."

There has been a drop in growth, though it isn't sharp and appears from the ons to be mainly due to a marked decrease in productivity across the whole economy. Inward investment has actually been good and both financial services and business services are still growing strongly. Even Nicolas Sturgeon has stopped banging on about a second referendum.

If I recall correctly this would be the survey of 217 'leading' economists who claimed an overall drop of 2.6% of gdp a year on?

Fulcrum weren't exactly nostrodamus either...

Nigel Farage is a lucky guy!! Laughing all the way to the bank..

Whether one approves of these pensions or not, the possesive adjective 'their' include many Brits.
'Us and them' type of argument is very confrontational and aggressive; not good for dialogue ...

www.newstatesman.com/politics/staggers/2016/07/nigel-farage-plans-pocket-his-84000-mep-salary-until-we-officially-quit-eu

If the EU has failed to provide for the pensions of the small number of Brits they directly employ then how is that our problem?

My local sports club employs a full time groundsman, should I join I'd be rather surprised to receive a bill for his pension in twenty years time...

spin you asked people to come up with a prediction that's been borne out. I did. Now you are suggesting it doesn't count because it was a "minority" of economists.
Part of the issue here is "leave" is like religion. You have faith it's going to be fine. All the evidence so far suggests it isn't. I'm not spending my time trying to argue someone away from a faith based position with evidence. It's totally pointless because no evidence will ever be good enough.

Sadly we are damaging real people in this country in pursuit of this faith based position (rising prices, jobs leaving etc). But hey. Religions in general have a bad track record of causing huge damage by insisting their belief is right.

Already posted elsewhere but better placed on this thread...from today's Financial Times:

No Quentin it was a long way out.

They explicitly explained their reasons for lower growth, they didn't mention productivity.

They did mention an upheaval in the financial services industry and a drop in inward investment. Neither are true, quite the opposite.

It could be that a very small number of those who responded got it about right however they would have been right at the most optimistic end of the spectrum.

Frankly I suspect if even one of those asked to contribute had got it right they would themselves be trumpeting their brilliance on the front pages, rather than you trying to do it obliquely.

It's too soon to know about financial services as we haven't left yet.
fortune.com/2017/07/06/britain-finance-industry-brexit-tipping-point/

If Brexit is such a good thing, the government would be crowing about it on the front pages rather than stumbling from disaster to disaster looking slightly shell shocked.

Much of the media under Murdoch back Brexit, they have no desire to publish news suggesting it's a total disaster.

Find me some good news about Brexit. We are leaving, so my opinions are neither here or there. Rather than trying to get retainers to prove why it's wrong, why don't you prove why it's right?

It isn't too late to judge the financial advice given by an investment house, which was your own quote.

Loss of internal investment? Not industry specific enough to invest on and wrong.

Upheaval in financial services is the only part of their predictions that is anywhere near to being specific enough. If you'd taken their advice and shorted firms heavily involved in financial services you'd have lost your shirt.

It's.... Not exactly compelling is it?

I don't expect anyone to be interested in my posting puff pieces or glad rag news Quentin. Given the deluded whingeing about the £350m per week though I think it's pretty clear that leave would have won by a much greater margin had a crystal ball been available.

Project fear was bollocks on stilts, and frankly I'm quite happy with the course of the thread as it is. :)

One thing no party got from last election was a mandate for a Hard Brexit. I hoping for the Norway model as our transition phase (to last indefniitely). May I lighten up the mood: Linky.

I'll bite.
I don't know for certain why productivity overall has fallen, maybe it is directly linked to Brexit, maybe some of it isn't (Why do you think it has fallen , by the way?)
What I do know is that, on a small scale, a number of different things could affect the productivity of an individual company, including a decline in business.
If a company sees a downturn in business, but does not instantly respond by making workers redundant, the productivity of those workers will fall. Not because the employees want to be lazy, but because increasingly they find themselves doing "busy work". Maybe 7 people are assigned to a given project rather than the usual 5, for instance. Maybe more employees become involved in the business development development part of the company, but see little improvement for their efforts. If they were sensible, they would also spend some of this time updating linkedin and their CVs, of course.

Notice how those goalposts keep moving? I think it must be those unicorns playing games...

It's a long term trend squishy, weakly from the millennium then very strongly since the financial crisis in 2007.

The latest figures are by far the most disappointing as they show an actual decrease in productivity, rather than an anemic but small increase as has been the trend.

German companies for example are on average over thirty percent more productive than ours.

I've seen a multitude of reasons given over the years without finding any of them even slightly convincing.

Just because one bad thing cannot be pinned on Brexit, does not mean that Brexit is having/will have no bad effects.

Its like being told by a Dr that smoking will be bad for your health, and then asking them what the link is between your broken leg and smoking.

Quite squishy.

I don't ever recall productivity being strongly negative before though. Or not without a reasonably obvious rationale.

I'd like to tell you that some top boffins from the ons or elsewhere are on it and have some ideas. Truth is rich that they just write articles about the productivity puzzle without ever nailing what is causing it.

Also it isn't exclusive to the UK, though certainly is far more pronounced in the UK than elsewhere.

I blame global warming myself. :)

I could think of several things that could be excacerbating the problem, although would not say that any of them are solely responsible, iyswim.
One is the example I gave a few posts ago - this would apply to certain companies, but not all, and would be a bad omen of upcoming job losses if the economy does not improve.

Another reason could be the increase in "self-employed" and the gig economy. Many people will be putting in a lot of hours, and not charging much for their work. Particularly rife in more creative industries, I think, where often highly skilled people massively undercharge for the amount of time and skill their work takes. This will skew the figures, as will changes to tax credit rules: A parent to young kids/carer topping up their income by doing small amounts of work when they can is incentivised to declare that they work over 16/30 (dependant on age) hours per week. I'm not trying to demonise these people, and its not even like they are lying, or deliberately trying to fiddle the system; If you took in ironing for extra money, or ran an etsy business, you might not track exactly how many hours you spend on this small business, it is often just an estimate.
A natural consequence to the tax credit rules might be that the productivity of this group of people will be skewed, even if in reality they have not become less productive.

I could well imagine that a future downturn in the economy will have a further negative effect on productivity, as people are pushed into self employment, where they find themselves competing with others for a limited amount of business, and undercutting each other.

It seems Mr Barnier is now saying that a trade deal is impossible.

Makes further negotiations rather pointless. Might as well end the uncertainty and declare udi once the great repeal bill passes.

Save ourselves billions in membership fees and start charging them tariffs.

Yeah, that'll show our face! Bye bye, nose!

Unless you mean we should start training diving instructors? Which would be a more sensible Brexit strategy than storming off in a patriotic huff because Barnier said we should not expect a 100% FRICTIONLESS trade deal.

What else could May do?

She's said she'll walk away. That no real is better than a bad deal. That she'll deny access to our fishing waters if the EU doesn't play nice.

They're refusing to negotiate. Leaves her no option.

They are not refusing to negotiate, you are being disingenuous.
“I have heard some people in the UK argue that one can leave the single market and keep all of its benefits. That is not possible,” he told the EU’s economic and social committee.

www.theguardian.com/politics/2017/jul/06/frictionless-trade-impossible-if-uk-leaves-eu-single-market-says-barnier

Kind of confirms what some of us remoaners have pointed out, doesn't it?

A few tens of billions in paid and lost tariff revenue would soon change their tune. :)

He's offering nothing but a bad deal, at a cost of up to £100 billion, though the actual figure hasn't been disclosed.

That's not a negotiating position, it's a protection racket.

"Nice lamb you have there. Be a shame if it spoiled in the truck awaiting customs clearance wouldn't it?"

Time to walk away.

God, I feel so sorry for Barnier...I cannot believe the honorable politicians representing the UK have not worked out the basic rules of the single market yet.

Let's face it, they've had over a year to Google it ...but wait...what's this? UPROAR that these basic rules also apply to this most very superior of countries, even though the EU has seen all the poll results indicating that Leave voters are now in the minority and Hard Brexit is most definitely NOT the will of the people as highlighted by our GE fiasco.

I don't know how he keeps a straight face, I really don't. He has months of David Davis's ignorance-fuelled temper tantrums ahead of him too, poor guy. I wouldn't wish that on anyone....and he's so polite with it too...absolute hero.

Time to walk away.

So what's your plan for the million + brits that will be left in legal limbo by walking away?

Time to walk away.

So what's your plan for the million + brits that will be left in legal limbo by walking away?

And the Irish border/GFA?