Brexit - real world implications

[Jockman]

13m said:

I was in the Canaries over the weekend. The exchange rate has made some pretty basic food look damned expensive. A two course lunch with a bottle of local wine was about €40 per head. That was calamari starter, local fish, basic eatery, plastic chairs.

How much is menu del dia?

[andymadmak]

13m said:

I was in the Canaries over the weekend. The exchange rate has made some pretty basic food look damned expensive. A two course lunch with a bottle of local wine was about €40 per head. That was calamari starter, local fish, basic eatery, plastic chairs.

And before Brexit vote was it 40 Euros per head then too?
In which case your price change has gone from 40 euros at !.30 to the pound (approx) pre referendum to 40 euros are 1.20 to the pound today.
That's £31 Vs £33. A two pound shift suddenly makes something "pretty damned expensive" ? (its probably actually nearer £2.50, but still...)

[Disastrous]

Anecdotal of course, but a friend of mine has just had an investor pull out of a deal to fund a startup that was almost complete, citing 'Brexit uncertainty' as the reason.

The investor in question heads a fund and he was apparently being honest in the sense that he explained he still 'could' but that a lot of people in his fund are doing nothing right now whilst they wait and see, and that there is a lot of nervousness about the whole situation.

Whether real or imagined that must be quite a pest for the startup sector if his behaviour is common.

[13m]

andymadmak said:

And before Brexit vote was it 40 Euros per head then too?
In which case your price change has gone from 40 euros at !.30 to the pound (approx) pre referendum to 40 euros are 1.20 to the pound today.
That's £31 Vs £33. A two pound shift suddenly makes something "pretty damned expensive" ? (its probably actually nearer £2.50, but still...)

I think we got €1.17/£

[V8RX7]

13m said:

andymadmak said:

And before Brexit vote was it 40 Euros per head then too?
In which case your price change has gone from 40 euros at !.30 to the pound (approx) pre referendum to 40 euros are 1.20 to the pound today.
That's £31 Vs £33. A two pound shift suddenly makes something "pretty damned expensive" ? (its probably actually nearer £2.50, but still...)

I think we got €1.17/£

Equally before all these countries joined the Euro they were extremely cheap to visit.

[Jockman]

V8RX7 said:

Equally before all these countries joined the Euro they were extremely cheap to visit.

Yup. Europe has many attractions but I rarely holiday there any more.

[anonymous-user]

13m said:

I was in the Canaries over the weekend. The exchange rate has made some pretty basic food look damned expensive. A two course lunch with a bottle of local wine was about €40 per head. That was calamari starter, local fish, basic eatery, plastic chairs.

Thanks your lucky stars you weren't there when the £ and Euro were at parity, which is where it was a few years ago.

[andymadmak]

jsf said:

Thanks your lucky stars you weren't there when the £ and Euro were at parity, which is where it was a few years ago.

Aye, in December 2008 the exchange rate against the Euro was at 1.0395!
Even as recently as August 2013 it was as low as 1.15.... In fact its only really been above 1.25 since June 2014, but even then it dipped to 1.23 in April of this year, so the idea that we are in uncharted waters is laughable.

[jjlynn27]

Not sure with whom I was discussing impact on science. This is an article from Swiss perspective, pretty much mirrors my views, obviously from UK perspective.

http://www.thelocal.ch/20160701/science-switzerlan...

[RYH64E]

andymadmak said:

jsf said:

Thanks your lucky stars you weren't there when the £ and Euro were at parity, which is where it was a few years ago.

Aye, in December 2008 the exchange rate against the Euro was at 1.0395!
Even as recently as August 2013 it was as low as 1.15.... In fact its only really been above 1.25 since June 2014, but even then it dipped to 1.23 in April of this year, so the idea that we are in uncharted waters is laughable.

The dollar rate is more significant for most of us, anything bought from America, China, Taiwan, Korea etc is typically priced in USD.

[andymadmak]

RYH64E said:

The dollar rate is more significant for most of us, anything bought from America, China, Taiwan, Korea etc is typically priced in USD.

I agree. On the USD we are down at trading levels more akin to 2008 (in fact a bit lower) I was simply replying to a poster who suggested that Brexit had suddenly made his calamari massively expensive.

[RYH64E]

andymadmak said:

RYH64E said:

The dollar rate is more significant for most of us, anything bought from America, China, Taiwan, Korea etc is typically priced in USD.

I agree. On the USD we are down at trading levels more akin to 2008 (in fact a bit lower) I was simply replying to a poster who suggested that Brexit had suddenly made his calamari massively expensive.

Lower, the lowest it's been in my memory. What will be key is where the rate goes from here, last time it crashed we went from 1.36 in Jan 2009 back into the 1.60s by summer of the same year, we're now in the low 1.30s and it's anyone's guess as to whether it will go lower still or maybe recover. My guess is lower still, I rarely get currency predictions right but the advice I've been given is to buy forward at current rates so it's not just me.

[230TE]

jjlynn27 said:

Not sure with whom I was discussing impact on science. This is an article from Swiss perspective, pretty much mirrors my views, obviously from UK perspective.

http://www.thelocal.ch/20160701/science-switzerlan...

There is a very obvious answer there, which is that we pool resources with Switzerland. This would be post Brexit obviously, I'm sure there will be a clause in some EU treaty or other prohibiting cross-border scientific co-operation outside the EU structures.

[jjlynn27]

230TE said:

jjlynn27 said:

Not sure with whom I was discussing impact on science. This is an article from Swiss perspective, pretty much mirrors my views, obviously from UK perspective.

http://www.thelocal.ch/20160701/science-switzerlan...

There is a very obvious answer there, which is that we pool resources with Switzerland. This would be post Brexit obviously, I'm sure there will be a clause in some EU treaty or other prohibiting cross-border scientific co-operation outside the EU structures.

Not sure if trolling? If not, did you read the article?

[gizlaroc]

andymadmak said:

Aye, in December 2008 the exchange rate against the Euro was at 1.0395!
Even as recently as August 2013 it was as low as 1.15.... In fact its only really been above 1.25 since June 2014, but even then it dipped to 1.23 in April of this year, so the idea that we are in uncharted waters is laughable.

I import footwear from Portugal, Italy and Spain (as well as India) and all my factories work off €1.20 to the pound, always have done.

I have already spoke with them regarding price points and it is staying at €1.2, they said they have around 5 years of buffer at €1.10 before they would adjust the conversion their end. Even if it dropped to parity they would stay at the €1.2 point for 4-5 seasons and see what happens long term.

Regarding import duty, it is currently 8% from outside the EU, worse case is no deal and we would have 8% on top, they have said they would swallow 4% and we could swallow the other 4%, which would be fine by me. My footwear products retail between £130 and £180, so the recommend price would go up to £135 and £189 if we stayed at at the €1.10 mark and also had no trade deals with Italy, Spain or Portugal.

Would that make a difference? Some of my retailers have the £130 shoes at £120 and many more have them at £140 or £150, loads put the ones at £180 in at £199.

I totally get that if everything goes up by 10% it makes more of a difference, but I think we see just as big fluctuations from season to season for all sorts of other reasons than we have from Brexit so far.

[230TE]

jjlynn27 said:

Not sure if trolling? If not, did you read the article?

I did indeed, and I have now read it again to make sure there's nothing I missed. My understanding:

1. Swiss scientists are being frozen out of EU-funded projects because of a disagreement between the EU and Switzerland over immigration rules.

2. The Swiss are worried that the EU will now take a hard line on this one because they don't want to set a precedent for negotiations with the UK.

3. Switzerland can't afford to fund equivalent projects on its own. As a result, highly talented Swiss researchers are now sitting around playing Pokemon.

4. Switzerland, like the UK, is very strong in pharma and biotech research.

So what did I miss out? (Other than that if the EU chops Swiss and British scientists from its research projects for political reasons, that's probably not a good thing for the research projects).

Horizon 2020 - protecting the EU's science community from nasty foreign influences

[walm]

230TE said:

So what did I miss out? (Other than that if the EU chops Swiss and British scientists from its research projects for political reasons, that's probably not a good thing for the research projects).

Yes. That is what you missed.
And pooling two frozen out countries doesn't help at all.

[andymadmak]

walm said:

230TE said:

So what did I miss out? (Other than that if the EU chops Swiss and British scientists from its research projects for political reasons, that's probably not a good thing for the research projects).

Yes. That is what you missed.
And pooling two frozen out countries doesn't help at all.

You are right. It does not help. It's also not in line with what the EU is saying should happen. I posted an extract last week from an EU e mail that. (regarding UK)

We could of course ask the EU to stick to its own rules, but I think we all know which way that would go. SO what would be wrong with UK and Switzerland teaming up on R&D projects? After all, the money that UK received from H2020 and similar was small beer compared to our net contributions, so finding funding for suitable projects should not be a major issue.
It would have been nice if the EU had found a way to "be big" in their dealings with those with whom it has disagreements. Sadly, it looks like they go in for this kind of petty minded, spiteful nonsense which is, as you say, unhelpful.
Methinks if this is the way things are going to be, then we are better off out of it. Having valuable research funding being dependant on the whim of corrupt political pygmies does not represent a sensible way forward.

[230TE]

walm said:

Yes. That is what you missed.
And pooling two frozen out countries doesn't help at all.

So if two countries working together are no better than one, how many countries' scientists do you have to pool before the results are worthwhile? It's not as if H2020 is some kind of altruistic gift from the EU for the greater good of humanity. It's strategic, aimed at bolstering the EU's position in specific industries, and the biggest mystery to me is what the Swiss thought they would get out of it. Not a lot of IP, I suspect, but I confess I haven't looked at the detail of any of the H2020 projects.

[anonymous-user]

andymadmak said:

Aye, in December 2008 the exchange rate against the Euro was at 1.0395!
Even as recently as August 2013 it was as low as 1.15.... In fact its only really been above 1.25 since June 2014, but even then it dipped to 1.23 in April of this year, so the idea that we are in uncharted waters is laughable.

What is this bizarre financial witchcraft? It's pandemonium out there! Panic! PANIC!