The economic consequences of Brexit
Poll: The economic consequences of Brexit
Total Members Polled: 732
Discussion
youngsyr said:
Great to hear positive news and the situation is certainly better than I thought it would be at this point, but what continues to worry me are the "macro" indicators, namely the GBP:USD exchange rate and the BoE interest rate drop/QE package that seem to point heavily towards the Brexit decision having a significant impact:
I struggle to see past the view that any economy with a 0.25% official rate and ongoing QE is anything but struggling.
Good job we're doing better than the EZ then isn't it..... 0.0%I struggle to see past the view that any economy with a 0.25% official rate and ongoing QE is anything but struggling.
ou sont les biscuits said:
don4l said:
More excellent news!
The ftse250 has just roared past the 18,000 mark.
That is almost 4% higher than it was just before the Brexit victory.
Is this good news, or just something that theory would predict following on from the loosening of monetary policy designed to stave off an economic slowdown post the Brexit vote?The ftse250 has just roared past the 18,000 mark.
That is almost 4% higher than it was just before the Brexit victory.
A few weeks ago, when the FTSE100 was doing well, the Remoaners said that the FTSE250 was a better indicator of the strength of the UK economy.
Now that the 250 is also doing well, most of them are busy looking for other evidence that the sky is about to fall in.
andymadmak said:
youngsyr said:
Great to hear positive news and the situation is certainly better than I thought it would be at this point, but what continues to worry me are the "macro" indicators, namely the GBP:USD exchange rate and the BoE interest rate drop/QE package that seem to point heavily towards the Brexit decision having a significant impact:
I struggle to see past the view that any economy with a 0.25% official rate and ongoing QE is anything but struggling.
Good job we're doing better than the EZ then isn't it..... 0.0%I struggle to see past the view that any economy with a 0.25% official rate and ongoing QE is anything but struggling.
Plus the Eurozone isn't a country or one economy, some countries are growing, others are shrinking - the Czech Republic outperformed the UK in Q2 2016 and Spain is predicted to as well, for example.
https://stats.oecd.org/index.aspx?queryid=350
jsf said:
youngsyr said:
Great to hear positive news and the situation is certainly better than I thought it would be at this point, but what continues to worry me are the "macro" indicators, namely the GBP:USD exchange rate and the BoE interest rate drop/QE package that seem to point heavily towards the Brexit decision having a significant impact:
I struggle to see past the view that any economy with a 0.25% official rate and ongoing QE is anything but struggling.
The Majority of world economies have been "struggling" since 2008, we have had very low interest rates and QE for the last 8 years.I struggle to see past the view that any economy with a 0.25% official rate and ongoing QE is anything but struggling.
Q2 2016 saw record growth since the crisis and the overwhelming feeling was that interest rates would have to be put up if anything.
To claim that the recent drop in interest rate and new QE is just a continuation of the impact of the 2009 financial crisis is obfuscation, to say the least.
The critical problem for the UK, for some time, has been a lack of commercial and industrial investment. With Labour, there was little appetite, but with the uncertainty of the coalition and more recently the referendum, the mid-term appetite of business to take risk, based on the likely future governmental situation has been weak at best. For some time, it has been difficult to know where long term planning was headed. There is little to no incentive with regard to first year capital allowances.
don4l said:
ou sont les biscuits said:
don4l said:
More excellent news!
The ftse250 has just roared past the 18,000 mark.
That is almost 4% higher than it was just before the Brexit victory.
Is this good news, or just something that theory would predict following on from the loosening of monetary policy designed to stave off an economic slowdown post the Brexit vote?The ftse250 has just roared past the 18,000 mark.
That is almost 4% higher than it was just before the Brexit victory.
A few weeks ago, when the FTSE100 was doing well, the Remoaners said that the FTSE250 was a better indicator of the strength of the UK economy.
Now that the 250 is also doing well, most of them are busy looking for other evidence that the sky is about to fall in.
Digga said:
The critical problem for the UK, for some time, has been a lack of commercial and industrial investment. With Labour, there was little appetite, but with the uncertainty of the coalition and more recently the referendum, the mid-term appetite of business to take risk, based on the likely future governmental situation has been weak at best. For some time, it has been difficult to know where long term planning was headed. There is little to no incentive with regard to first year capital allowances.
For once I don't think you can lay the blame at the government's door; no government can guarantee you what they'll be doing in 2, 3, 4 or even more years time. The pre-Brexit government was at least committed to balancing the budget and reducing corporation tax to very competitive levels as part of an overall "open for business" policy.I don't really see the relevance of first year capital allowances - there are allowances in place, they don't change your long term tax bill as they only accelerate your tax write off and many new companies don't fully utilise them anyway as you only pay tax on profits anyway.
IMO, the previous commitment to reducing corporation tax or the Enterprise Zone schemes for example are much more meaningful.
Dr Jekyll said:
youngsyr said:
That's a bit like the doctor saying "Don't worry about losing your arm, the guy in the next bed is losing his leg"!
No, it's like saying the lifeboat may be a bit wet, but the ship you abandoned is sinking rapidly.Firstly, the ship may well not have sunk if we hadn't jumped in the lifeboat and secondly we were never all in the same ship to start with - as above, the Czech Republic is doing better than us whilst remaining in the EU.
youngsyr said:
Dr Jekyll said:
youngsyr said:
That's a bit like the doctor saying "Don't worry about losing your arm, the guy in the next bed is losing his leg"!
No, it's like saying the lifeboat may be a bit wet, but the ship you abandoned is sinking rapidly.Firstly, the ship may well not have sunk if we hadn't jumped in the lifeboat and secondly we were never all in the same ship to start with - as above, the Czech Republic is doing better than us whilst remaining in the EU.
Hows that for mixing your metaphors?
youngsyr said:
Digga said:
The critical problem for the UK, for some time, has been a lack of commercial and industrial investment. With Labour, there was little appetite, but with the uncertainty of the coalition and more recently the referendum, the mid-term appetite of business to take risk, based on the likely future governmental situation has been weak at best. For some time, it has been difficult to know where long term planning was headed. There is little to no incentive with regard to first year capital allowances.
For once I don't think you can lay the blame at the government's door; no government can guarantee you what they'll be doing in 2, 3, 4 or even more years time. The pre-Brexit government was at least committed to balancing the budget and reducing corporation tax to very competitive levels as part of an overall "open for business" policy.I don't really see the relevance of first year capital allowances - there are allowances in place, they don't change your long term tax bill as they only accelerate your tax write off and many new companies don't fully utilise them anyway as you only pay tax on profits anyway.
IMO, the previous commitment to reducing corporation tax or the Enterprise Zone schemes for example are much more meaningful.
Many construction equipment firms, even fairly small ventures, are investing millions every year.
There is a problem with investment in the UK precisely because governments don't understand the need for stability and a long term plan.
Digga said:
youngsyr said:
Digga said:
The critical problem for the UK, for some time, has been a lack of commercial and industrial investment. With Labour, there was little appetite, but with the uncertainty of the coalition and more recently the referendum, the mid-term appetite of business to take risk, based on the likely future governmental situation has been weak at best. For some time, it has been difficult to know where long term planning was headed. There is little to no incentive with regard to first year capital allowances.
For once I don't think you can lay the blame at the government's door; no government can guarantee you what they'll be doing in 2, 3, 4 or even more years time. The pre-Brexit government was at least committed to balancing the budget and reducing corporation tax to very competitive levels as part of an overall "open for business" policy.I don't really see the relevance of first year capital allowances - there are allowances in place, they don't change your long term tax bill as they only accelerate your tax write off and many new companies don't fully utilise them anyway as you only pay tax on profits anyway.
IMO, the previous commitment to reducing corporation tax or the Enterprise Zone schemes for example are much more meaningful.
Many construction equipment firms, even fairly small ventures, are investing millions every year.
There is a problem with investment in the UK precisely because governments don't understand the need for stability and a long term plan.
I'd suggest it's not me who is slow on the uptake.
youngsyr said:
So, you believe that focusing on small, capital intensive businesses is the best way to increase investment in our country, rather than lowering corporation tax for every single company in the country?
I'd suggest it's not me who is slow on the uptake.
It's part of it; small businesses employ a large proportion of private employees, pay all their taxes in the UK and tend to look after staff well. Increasing productivity per head - a metric the UK arguably struggles with - requires investment.I'd suggest it's not me who is slow on the uptake.
youngsyr said:
Digga said:
youngsyr said:
Digga said:
The critical problem for the UK, for some time, has been a lack of commercial and industrial investment. With Labour, there was little appetite, but with the uncertainty of the coalition and more recently the referendum, the mid-term appetite of business to take risk, based on the likely future governmental situation has been weak at best. For some time, it has been difficult to know where long term planning was headed. There is little to no incentive with regard to first year capital allowances.
For once I don't think you can lay the blame at the government's door; no government can guarantee you what they'll be doing in 2, 3, 4 or even more years time. The pre-Brexit government was at least committed to balancing the budget and reducing corporation tax to very competitive levels as part of an overall "open for business" policy.I don't really see the relevance of first year capital allowances - there are allowances in place, they don't change your long term tax bill as they only accelerate your tax write off and many new companies don't fully utilise them anyway as you only pay tax on profits anyway.
IMO, the previous commitment to reducing corporation tax or the Enterprise Zone schemes for example are much more meaningful.
Many construction equipment firms, even fairly small ventures, are investing millions every year.
There is a problem with investment in the UK precisely because governments don't understand the need for stability and a long term plan.
I'd suggest it's not me who is slow on the uptake.
But making the capital allowances even more attractive for SMEs would be a massive boost to the economy. 98% + of all businesses in the UK are SMEs and whilst this includes the corner shops and window cleaning rounds, it also includes all those nice high tech and engineering firms with less than 250 employees that need a boost to help them invest in the next product etc.
Digga seems well up to speed IMHO
Digga said:
youngsyr said:
So, you believe that focusing on small, capital intensive businesses is the best way to increase investment in our country, rather than lowering corporation tax for every single company in the country?
I'd suggest it's not me who is slow on the uptake.
It's part of it; small businesses employ a large proportion of private employees, pay all their taxes in the UK and tend to look after staff well. Increasing productivity per head - a metric the UK arguably struggles with - requires investment.I'd suggest it's not me who is slow on the uptake.
Corporation tax cuts gives everyone an uplift, regardless of industry or size. ACAs are very targetted and whilst no doubt help some industries massively, will be meaningless to many others.
andymadmak said:
youngsyr said:
Digga said:
youngsyr said:
Digga said:
The critical problem for the UK, for some time, has been a lack of commercial and industrial investment. With Labour, there was little appetite, but with the uncertainty of the coalition and more recently the referendum, the mid-term appetite of business to take risk, based on the likely future governmental situation has been weak at best. For some time, it has been difficult to know where long term planning was headed. There is little to no incentive with regard to first year capital allowances.
For once I don't think you can lay the blame at the government's door; no government can guarantee you what they'll be doing in 2, 3, 4 or even more years time. The pre-Brexit government was at least committed to balancing the budget and reducing corporation tax to very competitive levels as part of an overall "open for business" policy.I don't really see the relevance of first year capital allowances - there are allowances in place, they don't change your long term tax bill as they only accelerate your tax write off and many new companies don't fully utilise them anyway as you only pay tax on profits anyway.
IMO, the previous commitment to reducing corporation tax or the Enterprise Zone schemes for example are much more meaningful.
Many construction equipment firms, even fairly small ventures, are investing millions every year.
There is a problem with investment in the UK precisely because governments don't understand the need for stability and a long term plan.
I'd suggest it's not me who is slow on the uptake.
But making the capital allowances even more attractive for SMEs would be a massive boost to the economy. 98% + of all businesses in the UK are SMEs and whilst this includes the corner shops and window cleaning rounds, it also includes all those nice high tech and engineering firms with less than 250 employees that need a boost to help them invest in the next product etc.
Digga seems well up to speed IMHO
As above, capital allowances only target very specific, capital intensive, businesses, whilst having no impact on many others.
youngsyr said:
Agreed, it doesn't necessarily require capital investment though.
Corporation tax cuts gives everyone an uplift, regardless of industry or size. ACAs are very targetted and whilst no doubt help some industries massively, will be meaningless to many others.
If a firm invests, say, in training, then the tax benefit is always in the current year, since this is deemed to be revenue spending, but with machinery and equipment, with very modest first year allowances, it is not so attractive. A firm would not be advised to buy machinery purely to get the tax credit, but equally, the existance of the credit is a very positive assistance.Corporation tax cuts gives everyone an uplift, regardless of industry or size. ACAs are very targetted and whilst no doubt help some industries massively, will be meaningless to many others.
If you go to any engineering firm in Italy, the level of investment over the last 30 years (including firms I know) has been staggering - they're factories are generally very well kitted out and definitely one of the things that help them to compete. Manufacturing exports are one of the few things keeping them going.
Digga said:
youngsyr said:
Agreed, it doesn't necessarily require capital investment though.
Corporation tax cuts gives everyone an uplift, regardless of industry or size. ACAs are very targetted and whilst no doubt help some industries massively, will be meaningless to many others.
If a firm invests, say, in training, then the tax benefit is always in the current year, since this is deemed to be revenue spending, but with machinery and equipment, with very modest first year allowances, it is not so attractive. A firm would not be advised to buy machinery purely to get the tax credit, but equally, the existance of the credit is a very positive assistance.Corporation tax cuts gives everyone an uplift, regardless of industry or size. ACAs are very targetted and whilst no doubt help some industries massively, will be meaningless to many others.
If you go to any engineering firm in Italy, the level of investment over the last 30 years (including firms I know) has been staggering - they're factories are generally very well kitted out and definitely one of the things that help them to compete. Manufacturing exports are one of the few things keeping them going.
The government doesn't have limited resources, so that shiney new kit in the Italian factories will be at the cost of supporting other businesses.
I'm not saying that ACAs aren't helpful to some businesses, I just believe that markets are generally better decision makers than governments as to where capital should flow and corporation tax cuts have significantly more impact on investment than the current ACA system.
youngsyr said:
At what cost though?
The government doesn't have limited resources, so that shiney new kit in the Italian factories will be at the cost of supporting other businesses.
I'm not saying that ACAs aren't helpful to some businesses, I just believe that markets are generally better decision makers than governments as to where capital should flow and corporation tax cuts have significantly more impact on investment than the current ACA system.
You get a depreciation allowance on machinery anyway so for both the business and HMG it is merely a cash flow exercise, but for small firms, cash is king and they are generally lot more careful at spending it than governments and a lot better at getting the benefits of it into local economies.The government doesn't have limited resources, so that shiney new kit in the Italian factories will be at the cost of supporting other businesses.
I'm not saying that ACAs aren't helpful to some businesses, I just believe that markets are generally better decision makers than governments as to where capital should flow and corporation tax cuts have significantly more impact on investment than the current ACA system.
As I already pointed out, corp tax cuts benefit all and some of the larger firms aren't paying that much tax here anyway...
Digga said:
f you don't see then you're a.) a bit slow on the uptake and b.) have never worked in a capital intensive small business. Current capital allowances are just £250k - it makes a significant cash flow difference to small firms. £250k is a piss in the ocean; we ordered a new CNC machine just before the referendum (we knew orders would be thin on the ground, so thought it a good time to be greedy, and sure enough it was) which in one go swallows up the whole of our allowance.
Many construction equipment firms, even fairly small ventures, are investing millions every year.
There is a problem with investment in the UK precisely because governments don't understand the need for stability and a long term plan.
Just took delivery of our new CNC last week from SCM.Many construction equipment firms, even fairly small ventures, are investing millions every year.
There is a problem with investment in the UK precisely because governments don't understand the need for stability and a long term plan.
Not quite enough to use up our capital allowances but last year's biomass plant was !!
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