The economic consequences of Brexit

[Tallow]

don4l said:

I disagree.

Imports are going to be more expensive, which will make UK products more competitive. Exports will be cheaper, which is great news for UK manufacturers.

The last time when the Pound had a similar fall was when we were ejected from the ERM. Our GDP went from minus 0.2% to +2.7%.


You can see the figures here:-
http://webarchive.nationalarchives.gov.uk/20160105...

Aside from the export aspects of this (which I've previously commented on anyway), I meant more that on an individual level it effects people in different ways. Just to say it's good only assumes it's only relevant addressing the trade deficit.

Some examples of the ways it negatively impacts as well are:

People who are paid in GBP but predominantly spend their money in another currency (my brother, for example, works in the UK and is paid in GBP but lives in Ireland). He's understandably less happy about the FX rate
Expatriates that hold assets back in the UK (e.g. retirees in Spain) suddenly have a big devaluation to this
Property prices/availability could be negatively impacted because of more overseas investment in residential property whilst the lower exchange rate makes purchases more compelling (I've just sold my house - the highest offer I received was from a Chinese buyer)
There's a clear short term impact on the costs of some stuff that is largely based upon commodities generally valued in USD (air fares and fuel, for example) - and this inflationary effect is likely the biggest impact to most people, of course

Whilst there are some instances (particularly the service sector) where GBP devaluation makes export more competitive in the short term, it's far from the be all and end all of the impact of exchange rate in general.

[Mrr T]

don4l said:

Ghibli said:

don4l said:

Invisibles? What on Earth are you talking about? Are our prostitutes spending their weekends in Paris?


Here are a few links.

First up, The Guardian:-

https://www.theguardian.com/business/2016/may/10/u...

For balance, The Telegraph:-

http://www.telegraph.co.uk/business/2016/06/09/uks...

Perhaps you would like to hear what "Tradeinfo" have to say:-

https://www.uktradeinfo.com/Statistics/OverseasTra...


Maybe you trust "Fullfact.org":-

https://fullfact.org/europe/uk-eu-trade/

If you don't trust any of the above, how about The Office of National Statistics?

https://www.ons.gov.uk/economy/nationalaccounts/ba...

They all agree. They all report remarkably similar figures. We have a £75Bn a year trade deficit with the EU, and it is increasing year by year. It is likely to exceed £80Bn this year.

I can't speak for MrT but I'm guessing he is talking about trade in services.

If you go to section 12 in the ons.gov link it says trade in services is compiled quarterly......

I think that you are guessing wrong.

In fact, I think that you are just making stuff up.

All of the figures that I have referenced include financial services.

Read them again.

Sorry for the delay in replying but other things to do.

The published trade figures rely on survey data for invisibles. If you look at UK trade data historically you will find the UK almost always seems to run a trade deficit. (You maybe interested to know if you add up all trade data it seems the world is running a trade deficit).

Now since the UK does not face repeated foreign reserve crisis which you would expect if you where always running a trade deficit. There is a lot of evidence that the official figures under estimate invisible by as much as 100%. This would also go some way to explain why UK productivity per head is so low.

So while the we may be running a trade deficit with the EU it likely much smaller than official figures and we may even be running a surplus.

[avinalarf]

Whilst it is true that the devaluation of the pound is a cause of concern,most will recognIse that this was to be expected.
The markets ,as usual,reacting to uncertainty.
No one can be certain how this will pan out.
If the government does a good job,in negotiating new trade agreements,and facilitating industrial growth,and we all play our part in advancing our economy,we can look forward to a rosy future.
I take heart from the magnificent achievements of all our sports men and women in the Olympics.

[///ajd]

Interesting response to Matt Elliott of Vote Leave in the Financial Times.

https://www.facebook.com/BritishVoices/photos/a.17...

Regarding currency devaluation, it is not the full story to suggest it is only a "good thing".

If you look at other currencies that have lost their value - it can end in tears. Venezeula springs to mind from recent history. I'm not suggesting that scale of devaluation will ever happen to the UK - but its fair to say it shows some downsides!

[Dr Jekyll]

///ajd said:

Interesting response to Matt Elliott of Vote Leave in the Financial Times.

https://www.facebook.com/BritishVoices/photos/a.17...

Regarding currency devaluation, it is not the full story to suggest it is only a "good thing".

If you look at other currencies that have lost their value - it can end in tears. Venezeula springs to mind from recent history. I'm not suggesting that scale of devaluation will ever happen to the UK - but its fair to say it shows some downsides!

Devalued currency is the least of Venezuela's problems. And look at Greece for an example of a country with too strong a currency.

[Derek Smith]

Digga said:

o an extend, I have to agree with what you say.

My hope, with regard to the Olympics, is that it makes some (those who need convincing) realise the UK is still a global player and that it provides some positive motivation to all of us.

Are you suggesting that the Olympics is in some way indicative of the financial potential of a country? Like East Germany sort of thing?

The Olympics is great entertainment, but that's all. Our 'trick' is to throw money at specific sports, most notably those where we stood a chance of medals. It has been used as a method for dominating since at least 1936. It appears to have worked for us. Will we continue to do so until the next lot? If so then will we be a global player for, for instance, basketball?

Anyway, the results of the Olympics show us as world players when we were in the EU 'cause we still are. Will we still be able to attract top coaches, be able to invest as much money should the £ drop further?

Please note that I'm not criticising our Olympians, or the fact that we have put a lot of money towards sports. I'm all for it in fact. I'm not sure I believe that the only criterion for money should be whether we could win an Olympic medal.

[don4l]

Ghibli said:

don4l said:

PurpleMoonlight said:

don4l said:

Imports are going to be more expensive, which will make UK products more competitive. Exports will be cheaper, which is great news for UK manufacturers.

A one sided view.

What about businesses that are importing to retail in the UK?

They will face stiffer competition from UK based companies. This is good news for British jobs.

PurpleMoonlight said:

What about manufacturers that are not exporting?

They will face less competition from importers.

This is also good news for British jobs.

This isn't complicated. In fact, it is very basic stuff.

How will this help our trade deals ?

Will it be a case of you can buy from us but we don't want your products.

I don't know how it will affect any trade deals that we negotiate. My point is that it will make British Jobs more competitive in a global economy. Trade deals are not the be all and end all of the British economy. After all, we do most of our trade with countries that we have no deal with.

More cars will be manufactured here, because German cars are going up by about 10%.

I've already seen a noticable increase in exports. A few days after the Brexit vote we had an order from a customer in Italy that hadn't ordered anything for at least three years. Since then we have seen lots of orders from abroad. Today we shipped stuff to both Saudi Arabia and to Dubai. We are only a small company, so my observations are anecdotal at this stage.

[don4l]

///ajd said:

Interesting response to Matt Elliott of Vote Leave in the Financial Times.

https://www.facebook.com/BritishVoices/photos/a.17...

Regarding currency devaluation, it is not the full story to suggest it is only a "good thing".

If you look at other currencies that have lost their value - it can end in tears. Venezeula springs to mind from recent history. I'm not suggesting that scale of devaluation will ever happen to the UK - but its fair to say it shows some downsides!

I usually ignore your posts because they are full of ill informed nonsense.

However, on this occasion I have responded to tell you that you have excelled yourself.

Well done!

Comparing the British economy to the Venezualian economy represents a new high for Pistonheads.

As JAYB would say -
"Jesus Christ".

[anonymous-user]

don4l said:

I usually ignore your posts because they are full of ill informed nonsense.

However, on this occasion I have responded to tell you that you have excelled yourself.

Well done!

Comparing the British economy to the Venezualian economy represents a new high for Pistonheads.

As JAYB would say -
"Jesus Christ".

[///ajd]

don4l said:

///ajd said:

Interesting response to Matt Elliott of Vote Leave in the Financial Times.

https://www.facebook.com/BritishVoices/photos/a.17...

Regarding currency devaluation, it is not the full story to suggest it is only a "good thing".

If you look at other currencies that have lost their value - it can end in tears. Venezeula springs to mind from recent history. I'm not suggesting that scale of devaluation will ever happen to the UK - but its fair to say it shows some downsides!

I usually ignore your posts because they are full of ill informed nonsense.

However, on this occasion I have responded to tell you that you have excelled yourself.

Well done!

Comparing the British economy to the Venezualian economy represents a new high for Pistonheads.

As JAYB would say -
"Jesus Christ".

Charming as ever Don.

I wasn't comparing us to Venezeula, just pointing out some of the downsides of a depreciating currency. But I think you could work that out. Reading some of your posts, it seems you'd like the pound to plummet further.....how much more would you like it to go down? Another 10%, 20%? Halved? Where do we draw the line?

I noticed you didn't post here for a while - was that related to your motives for brexit?

[loafer123]

Tallow said:

Aside from the export aspects of this (which I've previously commented on anyway), I meant more that on an individual level it effects people in different ways. Just to say it's good only assumes it's only relevant addressing the trade deficit.

Some examples of the ways it negatively impacts as well are:

People who are paid in GBP but predominantly spend their money in another currency (my brother, for example, works in the UK and is paid in GBP but lives in Ireland). He's understandably less happy about the FX rate
Expatriates that hold assets back in the UK (e.g. retirees in Spain) suddenly have a big devaluation to this.

If those people choose to run unhedged currency risk, that is their problem.

[loafer123]

Mrr T said:

Sorry for the delay in replying but other things to do.

The published trade figures rely on survey data for invisibles. If you look at UK trade data historically you will find the UK almost always seems to run a trade deficit. (You maybe interested to know if you add up all trade data it seems the world is running a trade deficit).

Now since the UK does not face repeated foreign reserve crisis which you would expect if you where always running a trade deficit. There is a lot of evidence that the official figures under estimate invisible by as much as 100%. This would also go some way to explain why UK productivity per head is so low.

So while the we may be running a trade deficit with the EU it likely much smaller than official figures and we may even be running a surplus.

Very interesting.

Thanks.

[don4l]

///ajd said:

I noticed you didn't post here for a while - was that related to your motives for brexit?

I've had a couple of weeks in Altea(Spain).


The food was fantastic. Watching the nudies on the beach was interesting. Watching their behaviour in the water was much more interesting.

[alfie2244]

don4l said:

I've had a couple of weeks in Altea(Spain).


The food was fantastic. Watching the nudies on the beach was interesting. Watching their behaviour in the water was much more interesting.

https://www.youtube.com/watch?v=X1VgcxE9Lpw

[Mr GrimNasty]

///ajd said:

Reading some of your posts, it seems you'd like the pound to plummet further.....how much more would you like it to go down? Another 10%, 20%? Halved? Where do we draw the line?

Well we'd better hope Carney sticks to wearing purple glitter face adornments at festivals instead of making disloyal petulant proclamations of doom and making completely unnecessary adjustments to rates and more unnecessary QE - all to keep up the pretense that he was right about Brexit.

He should be sacked along with Osborne for the good of the country and for his ego driven stupidity.

And BTW, it really is time you stopped sulking about the result!

[don4l]

alfie2244 said:

don4l said:

I've had a couple of weeks in Altea(Spain).


The food was fantastic. Watching the nudies on the beach was interesting. Watching their behaviour in the water was much more interesting.

https://www.youtube.com/watch?v=X1VgcxE9Lpw

That sums it up nicely!

Thank you for starting my day off with a smile.

[b2hbm]

It's amazing how the tagline "because of brexit" is being wheeled out for any poor economic news but I seem to recall well before the referendum there was talk on Reuters business pages of a forthcoming slowdown. So how about taking a look at the EU instead, and Germany in particular ?

The latest from the hand wringers is GM putting German factories on short time and blaming it, as is fashionable, on the £ and brexit...

https://www.thestreet.com/story/13680014/1/general...

and yet at the beginning of June, reporting figures for earlier in 2016....

http://www.dw.com/en/german-factory-orders-drop-sh...

and on 5th August, reporting figures for June

http://www.ft.com/fastft/2016/08/05/eurozone-slowd...

and in case the FT link doesn't work...

http://www.dailymail.co.uk/wires/ap/article-372502...

I still think the BoE was too quick to drop rates, but perhaps the real reason was to better position the UK in the global export market and blame it all on Brexit.

Edited by b2hbm on Saturday 20th August 07:39

[///ajd]

don4l said:

///ajd said:

I noticed you didn't post here for a while - was that related to your motives for brexit?

I've had a couple of weeks in Altea(Spain).


The food was fantastic. Watching the nudies on the beach was interesting. Watching their behaviour in the water was much more interesting.

Sounds good, free beaches where nudism isn't banned.

[avinalarf]

don4l said:

///ajd said:

I noticed you didn't post here for a while - was that related to your motives for brexit?

I've had a couple of weeks in Altea(Spain).


The food was fantastic. Watching the nudies on the beach was interesting. Watching their behaviour in the water was much more interesting.

I presume that the nudies in the water were discussing the pros and cons of currency hedging,as suggested by loafer123
In a previous post.

[London424]

I thought this was an interesting article/pov piece.

https://www.theguardian.com/commentisfree/2016/aug...