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  • Stevo_666Stevo_666 Posts: 36,212
    S&P will likely cut UK sovereign credit rating by one or two notches if Brexit occurs.

    Something about Brexit "undermining the predictability of UK policy" which will "likely negatively affect sustainable public finance, balanced economic growth and weakened response to economic or political shocks".


    Mark Carney, the rather dashing head of BoE is also very much in favour of staying in (and pressing for reform).
    The cut in sovereign rating is speculation, as are the reasons.
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  • mamba80mamba80 Posts: 5,086
    Cameron moves on, gets a seat in the Lords and makes a million a la Tony Blair.

    does that mean we will also get an 8 year wait for a report into the run up of C'morons decision and subsequent vote?
  • rick_chaseyrick_chasey Posts: 43,769 Lives Here
    S&P will likely cut UK sovereign credit rating by one or two notches if Brexit occurs.

    Something about Brexit "undermining the predictability of UK policy" which will "likely negatively affect sustainable public finance, balanced economic growth and weakened response to economic or political shocks".


    Mark Carney, the rather dashing head of BoE is also very much in favour of staying in (and pressing for reform).
    The cut in sovereign rating is speculation, as are the reasons.

    Sure but it's S&P saying that that's he direction their analysis points them. The referendum has already made them out the current rating on negative watch.
  • Stevo_666Stevo_666 Posts: 36,212
    S&P will likely cut UK sovereign credit rating by one or two notches if Brexit occurs.

    Something about Brexit "undermining the predictability of UK policy" which will "likely negatively affect sustainable public finance, balanced economic growth and weakened response to economic or political shocks".


    Mark Carney, the rather dashing head of BoE is also very much in favour of staying in (and pressing for reform).
    The cut in sovereign rating is speculation, as are the reasons.

    Sure but it's S&P saying that that's he direction their analysis points them. The referendum has already made them out the current rating on negative watch.
    It's still making forecasts about the future which are based on assumptions, projections etc.

    Strange though that you seem to be concerned about this causing a downgrade (of one notch if I read the paper right today), when you indicated in another thread that you were fine with the UK materially increasing the the national debt when that could potentially have a greater negative impact on our credit rating than leaving the EU. Not sure how you reconcile those two?
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  • ballysmateballysmate Posts: 13,026
    Yes who knows what deal the UK may/or not be able to achieve with other countries? but it will come at a massive cost.

    I think the UK will vote to leave and Cameron will go down as a failed PM - he was prepared to sacriface the UK's future, just so he could gain a few votes from UKiP.
    He should never have promised an in/out vote, the stakes are just too high.


    I find that a most extraordinary statement. Because you believe there is a risk of the result not going your way, there should be no vote. Would you have denied the Scots their referendum?
    Using your logic, can I put forward the idea that there should be no further Parliamentary elections lest we elect a dodgy lefty government? Of course not.

    No, your view is unrealistic, we dont have a death penalty referendum, nor do we give a vote to the communities blighted by HS2 etc - why? because governments have to look at the bigger picture or do you suggest a referendum for every controversial decision? and if no, why not? because thats the logic of your argument.
    Turn yours and stev0s views around and maybe you want a referendum because it suits your right wing agenda?

    Cameron didnt need to promise a vote, he didnt do so out of any nod to democracy or out of a great clamour to leave the EU, he did so, to skim a few votes from ukip,
    that the future well being of the uk should be decided by such short termism is what has dogged this country for decades.
    He doesnt want to leave the EU and judging by his recent actions and statements, he very much regrets giving this promise.

    Also, is Wiki a good sourse to base such an important decision on? should these wto be changed, do you ever think the EU would let us back in, not a cat in hells chance.

    My politics has no bearing on whether I think we should have a referendum. If you read my posts you will see that I am by no means certain which way I will vote. However, I do not accept without question the beliefs that we should suffer untold harm by withdrawal.
  • rick_chaseyrick_chasey Posts: 43,769 Lives Here
    S&P will likely cut UK sovereign credit rating by one or two notches if Brexit occurs.

    Something about Brexit "undermining the predictability of UK policy" which will "likely negatively affect sustainable public finance, balanced economic growth and weakened response to economic or political shocks".


    Mark Carney, the rather dashing head of BoE is also very much in favour of staying in (and pressing for reform).
    The cut in sovereign rating is speculation, as are the reasons.

    Sure but it's S&P saying that that's he direction their analysis points them. The referendum has already made them out the current rating on negative watch.
    It's still making forecasts about the future which are based on assumptions, projections etc.

    Strange though that you seem to be concerned about this causing a downgrade (of one notch if I read the paper right today), when you indicated in another thread that you were fine with the UK materially increasing the the national debt when that could potentially have a greater negative impact on our credit rating than leaving the EU. Not sure how you reconcile those two?

    I don't agree high gov't spending would have any negative impact on the credit rating, basically.
  • Stevo_666Stevo_666 Posts: 36,212
    Of course it does.

    Higher spending increases debt. Debt has an interest cost attached to it. As the debt rises, servicing the interest takes up progressively more of the state's income, and reducing its credit rating. If it gets high enough it cannot be repaid because the interest burden is too high.

    Before that point is reached, the markets price in the increased risk into the cost of borrowing, compunding the problem. Just look at the rates of interest Greece has to pay on its debt, its credit rating and the mess it is in due to excessive debt. That country had state spending that was too high compared to its income for too long.

    Pretty straightforward finance and economics, borne out by real live examples such as the one above.
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  • rick_chaseyrick_chasey Posts: 43,769 Lives Here
    As opposed to America in 1930s?
  • mamba80mamba80 Posts: 5,086
    Yes who knows what deal the UK may/or not be able to achieve with other countries? but it will come at a massive cost.

    I think the UK will vote to leave and Cameron will go down as a failed PM - he was prepared to sacriface the UK's future, just so he could gain a few votes from UKiP.
    He should never have promised an in/out vote, the stakes are just too high.


    I find that a most extraordinary statement. Because you believe there is a risk of the result not going your way, there should be no vote. Would you have denied the Scots their referendum?
    Using your logic, can I put forward the idea that there should be no further Parliamentary elections lest we elect a dodgy lefty government? Of course not.

    No, your view is unrealistic, we dont have a death penalty referendum, nor do we give a vote to the communities blighted by HS2 etc - why? because governments have to look at the bigger picture or do you suggest a referendum for every controversial decision? and if no, why not? because thats the logic of your argument.
    Turn yours and stev0s views around and maybe you want a referendum because it suits your right wing agenda?

    Also, is Wiki a good sourse to base such an important decision on? should these wto be changed, do you ever think the EU would let us back in, not a cat in hells chance.

    My politics has no bearing on whether I think we should have a referendum. If you read my posts you will see that I am by no means certain which way I will vote. However, I do not accept without question the beliefs that we should suffer untold harm by withdrawal.

    So, back to my extraordinary statement, Why should we have referendum on EU and not on every other controversial decision?

    As i said, the EU will have to reform, Merkel etc want to get voted back in, being part of a large trading block that, arguably has helped keep the peace in europe for decades, can only be a good thing, however, i am also more skeptical than i used to, primarily over the EU's inability (so far) to act over Syria/Libya but how different would it have been if the UK wasnt in the EU... worse or better?
  • ballysmateballysmate Posts: 13,026
    From your original post, it is clear that your objections to any referendum are based on the risk of the vote going contrary to your wishes, not on any constitutional grounds.
    I think the UK will vote to leave and Cameron will go down as a failed PM - he was prepared to sacriface the UK's future, just so he could gain a few votes from UKiP.
    He should never have promised an in/out vote, the stakes are just too high.

    EU membership has been a running sore, particularly for the Tories, but there isn't unanimous support from the left either. Some Labour voters are Eurosceptic, some Tories are Europhiles. Look at the votes that UKIP gained in Labour heartlands. The people decided to take us into the Common Market, let's see if they want us to remain in the EU.
    The issue transcends party politics and is has far reaching ramifications. Scotland had its referendum for the same reasons. I was and am a Unionist, but fully realise why the Scots wanted such a vote and I supported their right to do so.
  • Stevo_666Stevo_666 Posts: 36,212
    As opposed to America in 1930s?
    I'd need to take a look at the US depression to comment.

    But it is pure logic that if you have a certain level of income and your expenditure goes up, then your cash levels go down or your debt increases. What part of that is not clear?
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  • pblakeneypblakeney Posts: 9,810
    As opposed to America in 1930s?
    I'd need to take a look at the US depression to comment.

    But it is pure logic that if you have a certain level of income and your expenditure goes up, then your cash levels go down or your debt increases. What part of that is not clear?
    Me, me, me.
    I'll guess the response.
    "It is not a zero sum game."
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    veronese68 wrote:
    PB is the most sensible person on here.
  • Stevo_666Stevo_666 Posts: 36,212
    As opposed to America in 1930s?
    I'd need to take a look at the US depression to comment.

    But it is pure logic that if you have a certain level of income and your expenditure goes up, then your cash levels go down or your debt increases. What part of that is not clear?
    Me, me, me.
    I'll guess the response.
    "It is not a zero sum game."
    Well anticipated.

    I await with eagerness the explanation of how more state spending magically makes a profit :) In which case why don't we just borrow to the hilt, turn on the financial taps and make ourselves rich, rich, rich ? :wink:
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  • mamba80mamba80 Posts: 5,086
    From your original post, it is clear that your objections to any referendum are based on the risk of the vote going contrary to your wishes, not on any constitutional grounds.
    I think the UK will vote to leave and Cameron will go down as a failed PM - he was prepared to sacriface the UK's future, just so he could gain a few votes from UKiP.
    He should never have promised an in/out vote, the stakes are just too high.

    EU membership has been a running sore, particularly for the Tories, but there isn't unanimous support from the left either. Some Labour voters are Eurosceptic, some Tories are Europhiles. Look at the votes that UKIP gained in Labour heartlands. The people decided to take us into the Common Market, let's see if they want us to remain in the EU.
    The issue transcends party politics and is has far reaching ramifications. Scotland had its referendum for the same reasons. I was and am a Unionist, but fully realise why the Scots wanted such a vote and I supported their right to do so.

    i think its a running sore for all parties Bally.

    i just think that on balance we have to accept that Governments are there to govern and we have to accept their decisions or vote them out next time around, so would Churchill have gone to the electorate to decide to go to war or not against the Nazi's? he would have lost that vote.
    As you said, the EU in/out has far reaching ramifications, possibly beyond the general electorate to decide (who probably will look at it in the light of immigration only)
    My objection isnt that the in vote might lose, it is that Cameron didnt do it for the right reasons, as i said, there was no huge clamour for a vote, like say in Scotland, he did it to secure a tory victory.
  • Stevo_666Stevo_666 Posts: 36,212
    I think the motives have to be long term by the very mature of the decision - either we spend a long time in the EU or a long tome out (or something in between).

    That said, the Tory manifesto explicitly mentioned the referendum and they were elected on that basis. So they have the democratic mandate to do it. Not that the arguments on here make much difference, it's happening regardless and the people will have their say :)
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  • rick_chaseyrick_chasey Posts: 43,769 Lives Here
    As opposed to America in 1930s?
    I'd need to take a look at the US depression to comment.

    But it is pure logic that if you have a certain level of income and your expenditure goes up, then your cash levels go down or your debt increases. What part of that is not clear?

    Because you're confusing personal finance with macro economics.

    Biggest difference is this: http://www.economicsonline.co.uk/Managing_the_economy/The_multiplier_effect.html

    You should also remember, government expenditure is a component of GDP.


    Basically, the summary of 1930s US depression is taught in all economics 101 textbooks. Same goes for 1930s Germany.

    Wall Street crash happens. Everyone reins in expenditure. Lots of talk of austerity, everyone pulls their money in. Guess what, if no-one is spending anything, no-one is earning anything. So the US sits in a big big slump, for ages. Every time the gov't cuts spending because 'we can't take on more debt', the loss in overall national income only increases.

    Then suddenly there is war on the horizon, so the Americans start borrowing a lot to arm themselves for the forthcoming WW2.

    That really kicks in in the late 1930s and early 1940s (i.e. when war is on and they really start spending the cash), and guess what; the gov't expenditure ended up boosting the economy and kcik-starting it via the multiplier effect.

    Job done. They power through the 1940s and 1950s and never look back. Until 2008 anyway.

    The main reason the US bounced back so quickly from the 2008 crash was they managed to sign a monster stimulus package through.
  • mamba80mamba80 Posts: 5,086
    I think the motives have to be long term by the very mature of the decision - either we spend a long time in the EU or a long tome out (or something in between).

    That said, the Tory manifesto explicitly mentioned the referendum and they were elected on that basis. So they have the democratic mandate to do it. Not that the arguments on here make much difference, it's happening regardless and the people will have their say :)

    yep motives should be long term, i just think DC proposed one to apease current and potential ukip voters, so of course it was in the manifesto.

    i also think its not beyond the wit of the tories to postpone the vote until after 2020 and then kick it down the road, aside from ukip, no party really wants to leave the eu and non want to be the party that gets the blame for it.
  • Stevo_666Stevo_666 Posts: 36,212
    As opposed to America in 1930s?
    I'd need to take a look at the US depression to comment.

    But it is pure logic that if you have a certain level of income and your expenditure goes up, then your cash levels go down or your debt increases. What part of that is not clear?

    Because you're confusing personal finance with macro economics.

    Biggest difference is this: http://www.economicsonline.co.uk/Managing_the_economy/The_multiplier_effect.html

    You should also remember, government expenditure is a component of GDP.


    Basically, the summary of 1930s US depression is taught in all economics 101 textbooks. Same goes for 1930s Germany.

    Wall Street crash happens. Everyone reins in expenditure. Lots of talk of austerity, everyone pulls their money in. Guess what, if no-one is spending anything, no-one is earning anything. So the US sits in a big big slump, for ages. Every time the gov't cuts spending because 'we can't take on more debt', the loss in overall national income only increases.

    Then suddenly there is war on the horizon, so the Americans start borrowing a lot to arm themselves for the forthcoming WW2.

    That really kicks in in the late 1930s and early 1940s (i.e. when war is on and they really start spending the cash), and guess what; the gov't expenditure ended up boosting the economy and kcik-starting it via the multiplier effect.

    Job done. They power through the 1940s and 1950s and never look back. Until 2008 anyway.

    The main reason the US bounced back so quickly from the 2008 crash was they managed to sign a monster stimulus package through.
    Nope, I'm not confusing personal and macro.
    1. I recognized above there was some multiplier effect, but made the point that it was not enough that extra spendi g actually reduced debt. It is just that the debt impact in macro is reduced. But not eliminated.
    2. The law of financial gravity applies here in that whether you are an individual, a company otr a country, debt has an interest cost. Increasing the debt of any of people/companies/countries increases the interest charge. In the case of the UK, interest that could be spent on other things if we didnt owe the debt. Currently its about £43bn of interest on £1,500bn of debt.

    Logically there has to be a limit to the debt that can be sustained. How much do you think is too kuch for the UK?

    Re your US example, that was a limited duration in an extreme economic situation. Not sure how much debt thay had at the time. Ditto Germany. We are talking here about normal year in year out economic strategy, so not good examples that are relevant here. Especially when you look at the interest burden.
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  • rick_chaseyrick_chasey Posts: 43,769 Lives Here
    Interest has been at record lows for the past 5 years. Surely that's a great time to invest?

    US economy is doing well and they're hardly having to worry about the 'debt' - apart from a few nut job tea party republicans.

    http://www.usdebtclock.org
  • Stevo_666Stevo_666 Posts: 36,212
    Interest has been at record lows for the past 5 years. Surely that's a great time to invest?

    US economy is doing well and they're hardly having to worry about the 'debt' - apart from a few nut job tea party republicans.

    http://www.usdebtclock.org
    You may be confusing investment and spending, although all investment is spending but not vice versa.

    The multiplier effect is probably very hard to isolate and quantify, but as mentioned above, if it yielded a profit then logically a country would borrow to the hilt, spend money like water and get rich. Common sense and past experience tells me this is not the case.

    The US economy is doing well but that's mainly due to the economic performance being predominantly down to business performance while the underlying debt of a nation is a running total of how far it has lived beyond its means in the past. Inter-related but different.

    As for interest rates being low for 5 years, a link a posted recently showed the first concrete signs in a long time that the Fed may need to put rates up. The longer term danger for highly indebted nations is if their borrowing costs increase significantly come the time the need to take out fresh government debt.
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  • Stevo_666Stevo_666 Posts: 36,212
    S&P will likely cut UK sovereign credit rating by one or two notches if Brexit occurs.

    Something about Brexit "undermining the predictability of UK policy" which will "likely negatively affect sustainable public finance, balanced economic growth and weakened response to economic or political shocks".


    Mark Carney, the rather dashing head of BoE is also very much in favour of staying in (and pressing for reform).
    The cut in sovereign rating is speculation, as are the reasons.

    Sure but it's S&P saying that that's he direction their analysis points them. The referendum has already made them out the current rating on negative watch.
    Other ratings agencies feel that the UK credit rating could well be unchanged by a Brexit - or even be upgraded:
    http://www.telegraph.co.uk/finance/economics/12009256/UK-credit-rating-may-survive-Brexit-says-Moodys.html
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  • pblakeneypblakeney Posts: 9,810
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    veronese68 wrote:
    PB is the most sensible person on here.
  • joelsimjoelsim Posts: 7,552
    In. 100%.
    My men 2019: Superman Lopez, Gaviria, Henao, Teuns, Tejay, Gaudu, Cosnefroy, Evenepoel, Pidcock.
  • ballysmateballysmate Posts: 13,026
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    The way it's going some EU states may be holding a referendum to join the UK. :wink:
  • pblakeneypblakeney Posts: 9,810
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    The way it's going some EU states may be holding a referendum to join the UK. :wink:
    Germany must be getting a trifle pee'd off with the way things are going.
    The new EU?
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    veronese68 wrote:
    PB is the most sensible person on here.
  • Stevo_666Stevo_666 Posts: 36,212
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    The way it's going some EU states may be holding a referendum to join the UK. :wink:
    If you can't beat 'em, join 'em.
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  • mamba80mamba80 Posts: 5,086
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    That article points to the unemployed wherever they are, risk being left behind in globalisation due to lack of skills and training.
    Points to Germany as an example for skills training, calls for Osbourne not to cut education budgets (some chance:( ) and the uk's low productivity and low levels of in work training.

    i thought the headline was a bit mis leading
  • pblakeneypblakeney Posts: 9,810
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    That article points to the unemployed wherever they are, risk being left behind in globalisation due to lack of skills and training.
    Points to Germany as an example for skills training, calls for Osbourne not to cut education budgets (some chance:( ) and the uk's low productivity and low levels of in work training.

    i thought the headline was a bit mis leading
    Lack of training = lack of skills = lack of business = recession.
    Germany is the exception to the rule.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    veronese68 wrote:
    PB is the most sensible person on here.
  • mamba80mamba80 Posts: 5,086
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    That article points to the unemployed wherever they are, risk being left behind in globalisation due to lack of skills and training.
    Points to Germany as an example for skills training, calls for Osbourne not to cut education budgets (some chance:( ) and the uk's low productivity and low levels of in work training.

    i thought the headline was a bit mis leading

    Lack of training = lack of skills = lack of business = recession.
    Germany is the exception to the rule.

    yes true but as uk is one of the biggest culprits, if we left, how would that change?
  • pblakeneypblakeney Posts: 9,810
    Being part of the EU may not be as good a financial decision as portrayed in the past.
    The possibility of a permanent recession.
    http://www.bbc.co.uk/news/business-34894200

    That article points to the unemployed wherever they are, risk being left behind in globalisation due to lack of skills and training.
    Points to Germany as an example for skills training, calls for Osbourne not to cut education budgets (some chance:( ) and the uk's low productivity and low levels of in work training.

    i thought the headline was a bit mis leading

    Lack of training = lack of skills = lack of business = recession.
    Germany is the exception to the rule.

    yes true but as uk is one of the biggest culprits, if we left, how would that change?
    I've said it before, we are half way up the proverbial creek with no sign of a U-turn. In or out.
    Parliament is doing it's best to hide it but look at the underlying figures and World markets away from the headlines.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    veronese68 wrote:
    PB is the most sensible person on here.
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