The economic consequences of Brexit

[Puggit]

Murph7355 said:

As I recall the %ages being bandied around were relative performance compared to if we stayed. They were not an absolute shrinkage figure.

Correct - the sums showed we would be less well off than now. Not worse off than now.

Short terms results too. Long term....?

[anonymous-user]

http://www.imf.org/external/pubs/ft/weo/2016/updat...

IMF reports are there to be read. Apparently there is uncertainty?

No suprise considering we don't know what will happen when we leave, Or I could say things are looking great for the Uk.

Take your pick.

[Dr Jekyll]

///ajd said:

Dr Jekyll said:

///ajd said:

But its clear we ARE heading for worse than pre brexit - which is much worse than predicted.

The tariffs you refer to might even apply to us if we leave SM, if we stay in SM they still apply.

The latest (post referendum) IMF predictions are that our economy will continue to grow, and at a faster rate than most EU countries.
If we leave the EU, how can the EU possibly compel us to charge import tariffs on non EU imports? Or EU imports come to that?

The IMF have revised our growth downwards from pre-brexit forecasts. Immediately worse off.

No, FORECAST (that is in the future not immediately) to be better off by a smaller amount. But still even on their forecasts increasing our wealth and at a faster rate than most EU countries.

///ajd said:

If we leave the EU, they may charge us import tariffs on non-EU importa from the UK. That hurts OUR businesses, in exactly the same way you said it was hurting trade outside the EU when you brought up tariffs in the first place.

Of course they can, average 3% under WTO rules so hardly apocalyptic. But we don't have to charge tariffs any more if we don't want to. The proportion of our trade coming from outside the EU is 55% and increasing, so that's where we need to concentrate.

[Crush]

jsf said:

vonuber said:

Looks like Erasmus is out as well:

https://www.theguardian.com/education/2016/jul/23/...

That article reads like the writings of a cult.

“We are talking about enriched and changed lives, lifelong friendships – since the programme was launched, so many Erasmus babies have been born to couples who met through Erasmus.”

"Dominic Trendall, president of Sheffield’s student union, said: “Over the last couple of weeks we’ve had to let people in Europe know they’re welcome, that we’re not part of this racist culture and a better university for the fact that people come here from abroad; it’s very depressing that we’ve had to do it.

"Universities UK calculates that fees paid by EU students totalled £600m in 2014-15, and that students from Europe spend £1.49bn a year in off-campus costs, such as rent and subsistence."

Is the £1.49 billion in the UK or across the EU?earlier in the article it suggests there were only 15 000 applications to UK universities.

[Digga]

Mario149 said:

Could you clarify what you personally mean by "for the ones for whom ZIRP" is already failing? I.e. Why it's failing them and who they are?

I don't want to derail the thread but there is a widely held view that QE benefits the very few at great cost to the many. The average person can't borrow at low rates and has few, if any, assets or investments to benefit from the rsultant inflation.

Ghibli said:

http://www.imf.org/external/pubs/ft/weo/2016/updat...

IMF reports are there to be read. Apparently there is uncertainty?

No suprise considering we don't know what will happen when we leave, Or I could say things are looking great for the Uk.

Take your pick.

Is this the IMF that's fronted by someone about to get hauled over the coals for their lack of professional competence? The same organisation that individuals from politics and big business come and go from, in a revolving door? The IMF say a lot of things, but they're hardly independent and not always correct.

Can anyone say they knew what would happen if we stayed? There are manifold problems in what we're stronger EU economies; the banks in Italy, the warnings about public spending and rioting due to long overdue labour reforms in France.

[sidicks]

Derek Smith said:

Just gainsaying a post is not an argument. You know this, I assume. It is especially pointless when a quick google will show sources.

I've just done that and I find that although the figure I quoted was from memory, the precise percentage being 6.2, 'over 6%' seems reasonably accurate.

Others might disagree with the amount, but that's not the point of course. I was stating where the £4300 came from.

Correct, but the report made a number of assumptions about the future - some of which were arguably extremely pessimistic. Different assumptions would lead to very different outcomes some worse, some better than the current 'expected' path.

[///ajd]

Dr Jekyll said:

///ajd said:

Dr Jekyll said:

///ajd said:

But its clear we ARE heading for worse than pre brexit - which is much worse than predicted.

The tariffs you refer to might even apply to us if we leave SM, if we stay in SM they still apply.

The latest (post referendum) IMF predictions are that our economy will continue to grow, and at a faster rate than most EU countries.
If we leave the EU, how can the EU possibly compel us to charge import tariffs on non EU imports? Or EU imports come to that?

The IMF have revised our growth downwards from pre-brexit forecasts. Immediately worse off.

No, FORECAST (that is in the future not immediately) to be better off by a smaller amount. But still even on their forecasts increasing our wealth and at a faster rate than most EU countries.

///ajd said:

If we leave the EU, they may charge us import tariffs on non-EU importa from the UK. That hurts OUR businesses, in exactly the same way you said it was hurting trade outside the EU when you brought up tariffs in the first place.

Of course they can, average 3% under WTO rules so hardly apocalyptic. But we don't have to charge tariffs any more if we don't want to. The proportion of our trade coming from outside the EU is 55% and increasing, so that's where we need to concentrate.

We are arguing semantics.

They revised our growth downwards as it will not be as high as forecast pre-brexit. Hence while we will still have growth, it will be slower than it would have been. Less growth = worse off. You can't spin this any other way than being worse off than if we'd stayed, and in this year.

WTO tariffs on our exports into the EU if we left the SM would have a huge impact on our business. You shouldn't trivialise it.

Edited by ///ajd on Sunday 24th July 11:07

[anonymous-user]

Derek Smith said:

jsf said:

The UK will not have the Norwegian arrangement with the EU post Brexit.

The UK will have the UK arrangement with the EU post Brexit.

At this stage of the game no one can say what that will look like.

A wee bit contradictory.

Not in the slightest contradictory Derek.

[anonymous-user]

Digga said:

Is this the IMF that's fronted by someone about to get hauled over the coals for their lack of professional competence? The same organisation that individuals from politics and big business come and go from, in a revolving door? The IMF say a lot of things, but they're hardly independent and not always correct.

Can anyone say they knew what would happen if we stayed? There are manifold problems in what we're stronger EU economies; the banks in Italy, the warnings about public spending and rioting due to long overdue labour reforms in France.

It's the IMF. Nothing to do with me other than posting the link.

If you have a better source for predictions then please post it up, I'm happy to have a look.

[Digga]

Ghibli said:

It's the IMF. Nothing to do with me other than posting the link.

If you have a better source for predictions then please post it up, I'm happy to have a look.

Point taken! Predictions are seldom accurate.

Also, as for the idea posited by someone earlier of a CEO being asked to get behind a plan they do not agree with; that does actually happen.

[sidicks]

///ajd said:

We are arguing semantics.

They revised our growth downwards as it will not be as high as forecast pre-brexit. Hence while we will still have growth, it will be slower than it would have been. Less growth = worse off. You can't spin this any other way than being worse off than if we'd stayed, and in this year.

Based on their assumptions - are these reasonable? How accurate have their predictions been in the past?

What have they assumed for our future relationship with the EU? How does this change if the assumptions change?

///adj said:

WTO tariffs on our exports into the EU if we left the SM would have a huge impact on our business. You shouldn't trivialise it.

Why would they want to impose tariffs?

[RYH64E]

sidicks said:

Why would they want to impose tariffs?

Why would they not? Imports from other non-EU contries are subject to tariffs, why would those from the UK be treated differently?

[anonymous-user]

Digga said:

Point taken! Predictions are seldom accurate.

Also, as for the idea posited by someone earlier of a CEO being asked to get behind a plan they do not agree with; that does actually happen.

About as much use as the long distance weather forecast.

If there is a hurricane on the east coast of the states which could head over the pond I'd still want to know. If it didn't turn up, I wouldn't blame the weather man.

[Digga]

RYH64E said:

sidicks said:

Why would they want to impose tariffs?

Why would they not? Imports from other non-EU contries are subject to tariffs, why would those from the UK be treated differently?

This is an area of great uncertainty.

Left to the pragmatists, like Merkel, who clearly knows German industry has a stake in the UK market, we might expect a good, fair deal. However, the idealists, the most influential of which, currently, is Hollande, seem to be more vindictive in their stance, even if it might hurt them economically. So it depends how rational they are; none of them can really do without the custom of a market the size of the UK, but then when have they run their own affairs with any economic or fiscal probity?

[sidicks]

RYH64E said:

Why would they not? Imports from other non-EU contries are subject to tariffs, why would those from the UK be treated differently?

What would we do in response?

[PurpleMoonlight]

sidicks said:

Why would they want to impose tariffs?

There seems little point in having a free trade area if you do not enforce the benefits of it against those that are not members.

[Robertj21a]

Perhaps, if it wasn't for the usual French attitude, enough people would have voted to Remain....

[RYH64E]

sidicks said:

RYH64E said:

Why would they not? Imports from other non-EU contries are subject to tariffs, why would those from the UK be treated differently?

What would we do in response?

Look surprised and a bit indignant when our financial services and automotive manufacturing companies relocate back into the single market? That and pay a bit more for the latest Mercedes, Porsche, BMW, etc, at least those of use who can still afford to pay a bit more...

[anonymous-user]

EddieSteadyGo said:

steveatesh said:

<snip>
At the end of the day nobody knows what will happen or what the outcomes will be for many years, and a lot depends upon our negotiations. All this argument around immigration numbers and money is merely opinion at the moment but many posters are saying it all as fact.

It's just opinion and attitude to risk, that all.

Would have to agree with you on this one.

I voted Remain because I felt it was the lower risk option and the upside of 'Out' hadn't been properly described (apart from the prospect of lower EU immigration).

Whilst it seems likely to me that a short term slow down is likely, the medium to long term is unknown, which is why I've mostly stopped posting on this topic until things become clearer.

That's the same way that I came down with the argument, risks to both-but the risks of leaving were far greater and potential benefits less than if we had stayed. Apparently that made me a 'coward' and a 'bed wetter'.

[Dr Jekyll]

PurpleMoonlight said:

There seems little point in having a free trade area if you do not enforce the benefits of it against those that are not members.

The benefit of free trade is that you don't have import tariffs. The more countries you don't have import tariffs against the more benefit you derive.