BREXIT - Is This Really Still Rumbling On? 😴

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  • ugo.santalucia
    ugo.santalucia Posts: 28,312
    and the IMF slashes global growth by 0.1%... we must be a pretty doomed planet if 0.1% growth difference really matters
    left the forum March 2023
  • surrey_commuter
    surrey_commuter Posts: 18,867
    ugo.santalucia wrote:
    and the IMF slashes global growth by 0.1%... we must be a pretty doomed planet if 0.1% growth difference really matters

    No need to worry so long as you are not the guy at the margin
  • Stevo_666
    Stevo_666 Posts: 61,417
    Surrey Commuter wrote:
    ugo.santalucia wrote:
    Surrey Commuter wrote:

    There are lot of people who did not expect it and are still denying any downturn. If you have a spare moment then the comments on the EXpress/mail are priceless.

    However, 1.9% going to down to 1.5% is hardly newsworthy, is it?

    If growth was evenly spread then the back half has halved to 0.5%.

    Anyway this is the view of an optimist. A poll of forecasts I saw had it dropping from a range of 2-2.5% to 0.1-0.5%.

    So it depends on where you start from and whether you are on calendar or fiscal years but the summary is that we have dropped from healthy growth to bumping along the bottom.

    Still not really newsworthy but imagine if two months ago Osborne had pulled a policy trigger that resulted in that!!!
    Latest from the IMF:
    https://www.theguardian.com/business/2016/jul/19/imf-cuts-uk-growth-forecasts-following-brexit-vote

    So even with Brexit, the UK is the second fastest growing economy in the G7 behind the US in 2016, and will have the same growth rate as France and Germany in 2017.

    So all in all really not that bad. Cheer up folks.

    Remember that in the height of the GFC, annual GDP contracted in certain countries by 4%-5%.
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • rick_chasey
    rick_chasey Posts: 75,661
    This is all true, though there is the small matter of Brexit having not happened yet.
    _
  • Stevo_666
    Stevo_666 Posts: 61,417
    Rick Chasey wrote:
    This is all true, though there is the small matter of Brexit having not happened yet.
    I said above, businesses and markets don't like uncertainty. The likelihood is that uncertainty is worse than the eventual reality.

    Whichever way you look at it, the forecast is still for growth as good or better than our major competitors. Not the massive disaster that you and others are claiming.

    What do you think Germany and France are doing wrong to get such poor growth forecasts? Remember, this is before the likely Italy banking crisis has broken.
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • 4kicks
    4kicks Posts: 549
    Surrey Commuter wrote:
    4kicks wrote:
    Stevo 666 wrote:
    4kicks wrote:
    Conventional wisdom is the German treatment of tax write offs for research, coupled with a much cosier relationship between companies, banks and local government (the Lander) are what have driven the undoubted success of the Mittelstand. ( I also personally believe better infrastructure associated with the allies carpet bombing in 1944 followed by the Marshall plan and centrally planned economies by Adenaur, but I may be wrong!). Family ownership definitely helps. I do a bit of work with my old business school on startup mentoring and to my eyes a big in the UK is the focus on tech ventures with "success" being an exit strategy with your app/tech being bought by Google ventures, Facebook or Microsoft. Its of course a generalization but little seems to be on building stuff which as I mentioned before has a much more positive impact on the local community.
    I do agree that Germany 'starting with a clean sheet' post WW2 could have actually helped them post war - possibly the same for Japan?

    Not sure that German tax write offs for R&D etc are any better than the UK - we both have them, just different flavours. Possibly their write offs are more valuable but that is because they have a higher tax rate to start with.

    Not sure what you mean by closer relationship with banks and govt - there are pretty good links here from my point of view running a tax and treasury dept - if anything better in the UK than in Germany as we cover the whole of Europe Middle East and Africa.

    Stangely for all this success of the 'Mittelstand' I was on a call with our main bankers who pointed out that Germany has dropped down the global competitiveness rankings from 6th to 12th since 2014. Also (anecdotally) our most profitable country is the UK and our biggest loss maker is Germany. So not all rosy in the German garden by any stretch of the imagination.
    Germanys global competitiveness of course has a number of elements to it, including its higher social costs, as well as the lack of a service sector which can be highly profitable in the good days. My issue isnt really about overall competitiveness (its kind of like saying whats the best car?), but the social mix and income distribution which manufacturing enables. The "cosy relationship" is a long standing cross shareholding between banks and key manufacturers enabling long term investments in plant and property, and the Sparkasse are very closely linked with the Landers government , indeed so closely linked that its difficult to even define it as a separate entity.
    Back in the day I was managing a disastrous sale of a German film production unit which the company who hired me bought as an unwanted orphan from a bigger TV channel business, and it was very clear that the local savings bank, in part state owned, had so much "skin in the game" that it was impossible to do a deal without them, for example it wasnt even possible to factor the debt without them having the option to flip it to equity which wasnt even on the books as a warrant.

    Are their stats to support your the fact that manufacturing wages are higher per se? Surely it would depend on value added and supply and demands of labour. I understand that many Mittelstand are very specialised and rather than diversifying products looked to widen their markets through exporting
    Its a long time since I was actively involved in this kind of stuff, so whist I do have some economic data to back this up (somewhere) its pretty out of date, but I dont believe from anecdotal conversations with my German clients that much has changed. The entire issue of wages is also a curse and a blessing- German commentators criticize the high total wage bill in Germany as being detrimental to further growth, but its a nice problem to have.
    I also believe, as an aside, whilst there is no doubt Brexit (and possible further "$exits") will be detrimental to German and French growth rates, we are in a period of great uncertainly where I wouldn't trust ANY forecasts, frankly-
    Fitter....healthier....more productive.....
  • TheBigBean
    TheBigBean Posts: 21,917
    Stevo 666 wrote:
    Whichever way you look at it, the forecast is still for growth as good or better than our major competitors. Not the massive disaster that you and others are claiming.

    What do you think Germany and France are doing wrong to get such poor growth forecasts? Remember, this is before the likely Italy banking crisis has broken.

    They are likely to have a less expansionary monetary policy given that they are in the eurozone and the Bank of England has indicated that more QE may follow. The growth quotes are all denominated in local currency.

    It is important to remember that a car crash increases the GDP, but it would be better for the country if there were fewer car crashes.
  • Stevo_666
    Stevo_666 Posts: 61,417
    TheBigBean wrote:
    Stevo 666 wrote:
    Whichever way you look at it, the forecast is still for growth as good or better than our major competitors. Not the massive disaster that you and others are claiming.

    What do you think Germany and France are doing wrong to get such poor growth forecasts? Remember, this is before the likely Italy banking crisis has broken.

    They are likely to have a less expansionary monetary policy given that they are in the eurozone and the Bank of England has indicated that more QE may follow. The growth quotes are all denominated in local currency.

    It is important to remember that a car crash increases the GDP, but it would be better for the country if there were fewer car crashes.
    Don't give Rick clues...
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • rick_chasey
    rick_chasey Posts: 75,661
    TheBigBean wrote:
    Stevo 666 wrote:
    Whichever way you look at it, the forecast is still for growth as good or better than our major competitors. Not the massive disaster that you and others are claiming.

    What do you think Germany and France are doing wrong to get such poor growth forecasts? Remember, this is before the likely Italy banking crisis has broken.

    They are likely to have a less expansionary monetary policy given that they are in the eurozone and the Bank of England has indicated that more QE may follow. The growth quotes are all denominated in local currency.

    It is important to remember that a car crash increases the GDP, but it would be better for the country if there were fewer car crashes.

    BigBean has a point. The macro numbers are all good, employment is low (below 5%!) but the consensus doesn't seem to be so rosey when you speak with your average person.

    This column is worth a read: https://t.co/pWOiD5vmkt

    Cn0RP29WIAEX9MA.jpg
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  • Stevo_666
    Stevo_666 Posts: 61,417
    Rick Chasey wrote:
    TheBigBean wrote:
    Stevo 666 wrote:
    Whichever way you look at it, the forecast is still for growth as good or better than our major competitors. Not the massive disaster that you and others are claiming.

    What do you think Germany and France are doing wrong to get such poor growth forecasts? Remember, this is before the likely Italy banking crisis has broken.

    They are likely to have a less expansionary monetary policy given that they are in the eurozone and the Bank of England has indicated that more QE may follow. The growth quotes are all denominated in local currency.

    It is important to remember that a car crash increases the GDP, but it would be better for the country if there were fewer car crashes.

    BigBean has a point. The macro numbers are all good, employment is low (below 5%!) but the consensus doesn't seem to be so rosey when you speak with your average person.

    This column is worth a read: https://t.co/pWOiD5vmkt

    Cn0RP29WIAEX9MA.jpg
    Link wants me to pay to read it...

    Presumably a lot of these average people are ones who are so stupid (in your view) that they voted to leave, but now when they say something that suits your posution, their anecdotes are to be taken at face value?
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • Pross
    Pross Posts: 43,463
    Feel more positive having heard May and Merkel today. Things are still going to be tricky but it feels that they are prepared to compromise to minimise damage on both sides. Hollande may be less onside tomorrow though.
  • Stevo_666
    Stevo_666 Posts: 61,417
    More good news which must be true because its in the Guardian:
    https://www.theguardian.com/business/2016/jul/20/bank-of-england-agents-report-business-as-usual-after-brexit-eu-referendum
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • wallace_and_gromit
    wallace_and_gromit Posts: 3,618
    Pross wrote:
    Feel more positive having heard May and Merkel today. Things are still going to be tricky but it feels that they are prepared to compromise to minimise damage on both sides. Hollande may be less onside tomorrow though.

    Divide and conquer!
  • mrfpb
    mrfpb Posts: 4,569
    Pross wrote:
    Feel more positive having heard May and Merkel today. Things are still going to be tricky but it feels that they are prepared to compromise to minimise damage on both sides. Hollande may be less onside tomorrow though.

    So those of that said European leaders would act reasonably and in the interests of stability in the event of Brexit may have been right after all.
  • verylonglegs
    verylonglegs Posts: 4,023
    Lots of break-ups start reasonably well in the first 5 minutes with goodwill in abundance. It's when who gets what is discussed that it gets awkward. Got a long long way to go in this one.
  • florerider
    florerider Posts: 1,112
    Access to a single market for goods is highly likely given the integrated supply chains. Ford and BMW are prime examples of where UK manufactured engines are sent to other EU countries to be installed in finished vehicles that are then exported back to the UK, among other places

    The issue for the UK is services and capital. Few trade deals on services have been made, even the much vaunted Canadian one excludes services. Frankfurt and Paris are very clear on their desire to take away the pre-eminence of London. It starts with euro clearing leaving London. London being "more efficient" is not a reckoning - it is a political decision.

    Hence there will be a celebratory piece of paper on goods, but that means very little to the UK economy as a whole.
  • Stevo_666
    Stevo_666 Posts: 61,417
    florerider wrote:
    Access to a single market for goods is highly likely given the integrated supply chains. Ford and BMW are prime examples of where UK manufactured engines are sent to other EU countries to be installed in finished vehicles that are then exported back to the UK, among other places

    The issue for the UK is services and capital. Few trade deals on services have been made, even the much vaunted Canadian one excludes services. Frankfurt and Paris are very clear on their desire to take away the pre-eminence of London. It starts with euro clearing leaving London. London being "more efficient" is not a reckoning - it is a political decision.

    Hence there will be a celebratory piece of paper on goods, but that means very little to the UK economy as a whole.
    Simplifying a little, the EU countries want maximised access to UK markets for goods on-going - the EU runs a large surplus on goods trade with the UK and IIRC represents 13% of EU exports. We run a large surplus in financial services and want maximised access to those markets on-going. You can see how this could end up in a reasonable compromise after all the wrangling and shouting that will no doubt ensue.
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • wallace_and_gromit
    wallace_and_gromit Posts: 3,618
    florerider wrote:
    It starts with euro clearing leaving London. London being "more efficient" is not a reckoning - it is a political decision.

    It will be interesting to see how this pans out. The clear preference amongst market players is for clearing to take place in London, otherwise it would have moved by now.

    There are a lot of exceptionally devious folk in the "City" and devising ways round any legal framework imposed may not pose an insurmountable barrier to things carrying on in London.There may well be such an "unintended consequence" lurking in existing legislation, let alone anything that might be drafted in future.
  • Garry H
    Garry H Posts: 6,639
    Wallace and Gromit wrote:
    florerider wrote:
    It starts with euro clearing leaving London. London being "more efficient" is not a reckoning - it is a political decision.

    It will be interesting to see how this pans out. The clear preference amongst market players is for clearing to take place in London, otherwise it would have moved by now.

    There are a lot of exceptionally devious folk in the "City" and devising ways round any legal framework imposed may not pose an insurmountable barrier to things carrying on in London.There may well be such an "unintended consequence" lurking in existing legislation, let alone anything that might be drafted in future.

    Won't happen. Other countries outside of EU also clear EUR. Will they demand an end to that as well? (That was a rhetorical question)
  • TheBigBean
    TheBigBean Posts: 21,917
    Garry H wrote:
    Wallace and Gromit wrote:
    florerider wrote:
    It starts with euro clearing leaving London. London being "more efficient" is not a reckoning - it is a political decision.

    It will be interesting to see how this pans out. The clear preference amongst market players is for clearing to take place in London, otherwise it would have moved by now.

    There are a lot of exceptionally devious folk in the "City" and devising ways round any legal framework imposed may not pose an insurmountable barrier to things carrying on in London.There may well be such an "unintended consequence" lurking in existing legislation, let alone anything that might be drafted in future.

    Won't happen. Other countries outside of EU also clear EUR. Will they demand an end to that as well? (That was a rhetorical question)

    The argument I heard from some lawyers is that they could use discriminatory legislation to specifically target euro clearing in the UK. At present the UK is protected from discriminatory legislation by the EU. I think it is all a bit unlikely as that would basically lead to a tit for tat trade war. It's all bluster and part of the negotiation process.
  • Jez mon
    Jez mon Posts: 3,809
    Stevo 666 wrote:
    florerider wrote:
    Access to a single market for goods is highly likely given the integrated supply chains. Ford and BMW are prime examples of where UK manufactured engines are sent to other EU countries to be installed in finished vehicles that are then exported back to the UK, among other places

    The issue for the UK is services and capital. Few trade deals on services have been made, even the much vaunted Canadian one excludes services. Frankfurt and Paris are very clear on their desire to take away the pre-eminence of London. It starts with euro clearing leaving London. London being "more efficient" is not a reckoning - it is a political decision.

    Hence there will be a celebratory piece of paper on goods, but that means very little to the UK economy as a whole.
    Simplifying a little, the EU countries want maximised access to UK markets for goods on-going - the EU runs a large surplus on goods trade with the UK and IIRC represents 13% of EU exports. We run a large surplus in financial services and want maximised access to those markets on-going. You can see how this could end up in a reasonable compromise after all the wrangling and shouting that will no doubt ensue.


    Define reasonable compromise?
    You live and learn. At any rate, you live
  • Stevo_666
    Stevo_666 Posts: 61,417
    A compromise that is judged to be reasonable by both parties.

    Subjective isn't it...
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • surrey_commuter
    surrey_commuter Posts: 18,867
    Stevo 666 wrote:
    A compromise that is judged to be reasonable by both parties.

    Subjective isn't it...

    The devil will be in detail. As stated above free trade is about a lot more than tariffs. They are eyeing up the City as it is the jewel in our crown. They will want to put the foundations I pace to chip away at our dominance. Ironically of course we all hate the wankers and half the country would happily see them go so that is not going to strengthen our negotiating position... ie fuck the fishy men to preserve the city
  • Stevo_666
    Stevo_666 Posts: 61,417
    Surrey Commuter wrote:
    Stevo 666 wrote:
    A compromise that is judged to be reasonable by both parties.

    Subjective isn't it...

    The devil will be in detail. As stated above free trade is about a lot more than tariffs. They are eyeing up the City as it is the jewel in our crown. They will want to put the foundations I pace to chip away at our dominance. Ironically of course we all hate the wankers and half the country would happily see them go so that is not going to strengthen our negotiating position... ie fark the fishy men to preserve the city
    Of course it is more than just tariffs. My post above made reference to services as well.

    Devil.will be in the detail as you say: the higher level point In was making was that we have things they want and vice versa, So a decent settlement is feasible.
    "I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]
  • BelgianBeerGeek
    BelgianBeerGeek Posts: 5,226
    verylonglegs wrote:
    Lots of break-ups start reasonably well in the first 5 minutes with goodwill in abundance. It's when who gets what is discussed that it gets awkward. Got a long long way to go in this one.
    Yep. TM will have to go back to the party. For whom many the word "compromise" means "loser". She can't please all of them all the time, and who wants to be thought of as a loser?
    Ecrasez l’infame
  • surrey_commuter
    surrey_commuter Posts: 18,867
    Stevo 666 wrote:
    Surrey Commuter wrote:
    Stevo 666 wrote:
    A compromise that is judged to be reasonable by both parties.

    Subjective isn't it...

    The devil will be in detail. As stated above free trade is about a lot more than tariffs. They are eyeing up the City as it is the jewel in our crown. They will want to put the foundations I pace to chip away at our dominance. Ironically of course we all hate the wankers and half the country would happily see them go so that is not going to strengthen our negotiating position... ie fark the fishy men to preserve the city
    Of course it is more than just tariffs. My post above made reference to services as well.

    Devil.will be in the detail as you say: the higher level point In was making was that we have things they want and vice versa, So a decent settlement is feasible.

    Do you have faith in them knowing what to ask for? There are powerful pressure groups out there as well as industries that stir up powerful emotions whether positive or negative. These are politicians who need to payback the powerbrokers and win the next election.

    My fear is that we will end up fighting for the likes of the fishing industry for emotional reasons.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    BelgianBeerGeek wrote:
    verylonglegs wrote:
    Lots of break-ups start reasonably well in the first 5 minutes with goodwill in abundance. It's when who gets what is discussed that it gets awkward. Got a long long way to go in this one.
    Yep. TM will have to go back to the party. For whom many the word "compromise" means "loser". She can't please all of them all the time, and who wants to be thought of as a loser?

    Or Boris/Davis/Fox have to go back to the party. If you blame them who do you send instead? I think TM has carefully chosen bloody useless but known hard core Brexiteers. Why else would you overlook Gove who is actually bright and dynamic?
  • Jez mon
    Jez mon Posts: 3,809
    Because in his time at Education ministry, Gove managed to pee off all the teachers, and then when he got to the justice ministry, he managed to pee off all the judges?
    You live and learn. At any rate, you live
  • rick_chasey
    rick_chasey Posts: 75,661
    Cn9NGo6XEAAX4vB.jpg
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  • rick_chasey
    rick_chasey Posts: 75,661
    They're very ugly numbers.

    :(
    _

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