BREXIT - Is This Really Still Rumbling On? 😴

surrey_commuter

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

Pross

rick_chasey said:

Stevo_666 said:

More data from the World Bank which shows what a load cr@p Carney's claim is.
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=DE-GB

(Just change the start year to 2016). From 2016 to 2019, GDP growth rates in the 2 countries were pretty much identical: in 2020 Germany did better but in 2021 the UK did better by roughly the same amount.

Can someone explain how this alleged 20% gap appeared?

Sterling to GBP from 1.41 to 1.15 accounts for 18 percentage points of the 20% of the drop.

Now I’m not sure if I’m missing some financial industry subtle terminology how can Sterling and GBP have an exchange rate, it’s the same thing isn’t it?

rick_chasey

Sorry Sterling to euro

rick_chasey

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

wallace_and_gromit

The problem with doing the analysis from an exchange rate at one point in time to another is that supposedly the U.K. economy got circa 5% larger relative to the German economy in the last couple of weeks due to the exchange rate movement following Kwasi getting the chop.

It’s hopefully not too controversial to say that in those couple of weeks, nothing much has changed in either economy to justify such a differential.

The exchange rate takes into account short term effects and longer term expectations, as well as the actual state of economies. The really interesting question is why the GBP/EUR exchange rate was as high as it was in 2015 and 2016 when it had been 1.15-1.25 for the period 2010-2014. Euro suppressed by fears due to Eurozone crisis, Greece etc?

ugo.santalucia

Heard a comment last week explaining in a nutshell why Brexit is not working… you can’t have European style services with American style taxation… that’s it… that’s why Kwarteng and Truss were demolished by the markets…

rjsterry

rick_chasey said:

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

Surely that would show up in those charts measured in dollars. If the £ drops against the €, it's likely to drop against the $ as well unless the $ is also falling against the €.

rick_chasey

rjsterry said:

rick_chasey said:

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

Surely that would show up in those charts measured in dollars. If the £ drops against the €, it's likely to drop against the $ as well unless the $ is also falling against the €.

Why is it necessary to look at a third currency?

Sterling to Euro is the obvious comparison is it not? UK Economy is in Sterling, Germany in Euros.

You can measure it in Libyan dinar if you want?

TheBigBean

rjsterry said:

rick_chasey said:

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

Surely that would show up in those charts measured in dollars. If the £ drops against the €, it's likely to drop against the $ as well unless the $ is also falling against the €.

My suspicion is that the charts use a single exchange rate. The description in the supporting information is not that clear.

rjsterry

rick_chasey said:

rjsterry said:

rick_chasey said:

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

Surely that would show up in those charts measured in dollars. If the £ drops against the €, it's likely to drop against the $ as well unless the $ is also falling against the €.

Why is it necessary to look at a third currency?

Sterling to Euro is the obvious comparison is it not? UK Economy is in Sterling, Germany in Euros.

You can measure it in Libyan dinar if you want?

Because that gives you a viewpoint external to both £ and €. The € doesn't have a fixed value over that period either. If you are comparing the relative performance of two currencies then reference to a third independent currency gives you a better understanding of what is going on. Looking at a £:€, most of the fall happened immediately after 2008, with an upward spike around 2015. So picking that point as a comparator gives a slightly skewed view of what 'typical' rates were.

rick_chasey

rjsterry said:

rick_chasey said:

rjsterry said:

rick_chasey said:

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

Surely that would show up in those charts measured in dollars. If the £ drops against the €, it's likely to drop against the $ as well unless the $ is also falling against the €.

Why is it necessary to look at a third currency?

Sterling to Euro is the obvious comparison is it not? UK Economy is in Sterling, Germany in Euros.

You can measure it in Libyan dinar if you want?

Because that gives you a viewpoint external to both £ and €. The € doesn't have a fixed value over that period either. If you are comparing the relative performance of two currencies then reference to a third independent currency gives you a better understanding of what is going on. Looking at a £:€, most of the fall happened immediately after 2008, with an upward spike around 2015. So picking that point as a comparator gives a slightly skewed view of what 'typical' rates were.

But they matter.

We ignore currency for things like growth because we want an accurate reflection of the domestic situation, but clearly in an international context, currencies matter just as much.

Flip it the other way, if the UK was not able to devalue, what do you think happens to growth?

kingstongraham

If you convert both to the same third currency on the same day, then that is exactly the same as converting one to the other.

rick_chasey

kingstongraham said:

If you convert both to the same third currency on the same day, then that is exactly the same as converting one to the other.

Sure, so why bother?

rjsterry

rick_chasey said:

rjsterry said:

rick_chasey said:

rjsterry said:

rick_chasey said:

surrey_commuter said:

rick_chasey said:

TheBigBean said:

kingstongraham said:

rjsterry said:

OK.

Here is where Carney is quoting from, I think.

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=GB-DE



Still not sure how he gets from there to the figures in his tweet.

This (2015, third figure in) is about as close as I can see to the 90%.

Here's a graph of UK GDP as a percent of German GDP.

You might have to explain to me how a massive Sterling devaluation doesn’t remotely impact that?

I’m not making the 18% vs euros up?

Because everybody measures these things in $ and the € has fallen by a comparable amount.

Logically the UK economy can not be 10% smaller than the German economy when they have over 20% more people.

But Sterling to the Euro has fallen 18%?
Forget the dollar here.

Surely that would show up in those charts measured in dollars. If the £ drops against the €, it's likely to drop against the $ as well unless the $ is also falling against the €.

Why is it necessary to look at a third currency?

Sterling to Euro is the obvious comparison is it not? UK Economy is in Sterling, Germany in Euros.

You can measure it in Libyan dinar if you want?

Because that gives you a viewpoint external to both £ and €. The € doesn't have a fixed value over that period either. If you are comparing the relative performance of two currencies then reference to a third independent currency gives you a better understanding of what is going on. Looking at a £:€, most of the fall happened immediately after 2008, with an upward spike around 2015. So picking that point as a comparator gives a slightly skewed view of what 'typical' rates were.

But they matter.

We ignore currency for things li because we want an accurate reflection of the domestic situation, but clearly in an international context, currencies matter just as much.

Flip it the other way, if the UK was not able to devalue, what do you think happens to growth?

I've not suggested otherwise. Change in exchange rate is not something that happens in isolation and should be reflected in, say, the World Bank data where the figures are quoted in dollars.

rjsterry

rick_chasey said:

kingstongraham said:

If you convert both to the same third currency on the same day, then that is exactly the same as converting one to the other.

Sure, so why bother?

Because it gives a view of both currencies. Take a hypothetical scenario. The exchange rate between A and B stays relatively stable. Everything looks fine, but against C, both have been falling. If you bring in a fourth currency you can see whether it was C strengthening rather than A and B weakening

rick_chasey

It's not a discussion on the exchange rate - I'm saying when you compare to economies directly, you factor in the rate between the two over time.

From the UK perspective, the German economy did go up by that much, according to the currency the UK uses.

Had the UK been in Euros, same as Germany, the economy would have tanked to compensate. Instead, the agency over its own currency helps mask and lessen the impact of the devaluation, but it'll be felt just as keenly over time.

The output of Germany is 18-20% higher in the UK's eyes than it used to be. Their cars, produced in the same way for the same marginal cost, are now 18-20% more expensive to Britian than in 2015. You can't change that, as much as you would want to.

kingstongraham

rick_chasey said:

kingstongraham said:

If you convert both to the same third currency on the same day, then that is exactly the same as converting one to the other.

Sure, so why bother?

Because those numbers are the ones that are readily available and generally accepted. If you can find the source for the GBP numbers (other than that tweet), great.

I'd be interested in the 2014 number in GBP for Germany GDP on the same basis. I would expect it to show that the Germany economy shrank massively in 2015, then expanded massively in 2016.

rjsterry

rick_chasey said:

It's not a discussion on the exchange rate - I'm saying when you compare to economies directly, you factor in the rate between the two over time.

From the UK perspective, the German economy did go up by that much, according to the currency the UK uses.

Had the UK been in Euros, same as Germany, the economy would have tanked to compensate. Instead, the agency over its own currency helps mask and lessen the impact of the devaluation, but it'll be felt just as keenly over time.

The output of Germany is 18-20% higher in the UK's eyes than it used to be. Their cars, produced in the same way for the same marginal cost, are now 18-20% more expensive to Britian than in 2015. You can't change that, as much as you would want to.

Again, present the data. Also, are you pretending you can't see the 2015 spike in £:€ and why that might accentuate the perceived changes?

wallace_and_gromit

rick_chasey said:

Their cars, produced in the same way for the same marginal cost, are now 18-20% more expensive to Britian than in 2015. You can't change that, as much as you would want to.

True, but inflation barely got past 4% as a result of the Brexit vote devaluation, before quickly dropping back to its post-GFC and pre-"global supply chain issues" normal level. So in terms of making life more expensive, a major currency devaluation is not all it appears to be.

HilaryAmin

How others see us:

"British news is covered amply (some might say too amply) in American media. Behind the lurid headlines, however, is a deeper story of decades-long economic dysfunction that holds lessons for the future.

In the American imagination, the U.K. is not only our political parent but also our cultural co-partner, a wealthy nation that gave us modern capitalism and the Industrial Revolution. But strictly by the numbers, Britain is pretty poor for a rich place. U.K. living standards and wages have fallen significantly behind those of Western Europe. By some measures, in fact, real wages in the U.K. are lower than they were 15 years ago, and will likely be even lower next year."

https://www.msn.com/en-us/money/markets/how-the-uk-became-one-of-the-poorest-countries-in-western-europe/ar-AA13luEL

orraloon

NYT The Daily podcast from last Friday: "...good lord, what a hot mess that country is..."
2 minutes in for that quote.

https://www.nytimes.com/2022/10/21/podcasts/the-daily/liz-truss-resigns-conservative-party.html

Stevo_666

It's clear that this sort of GDP data is normally presented in USD or USD 'constant currency' as has been said above more than once. Carney is therefore presenting his info in a non standard way which just happens to make the UK look worse than it really is and worse than when using the accepted methodology.

Unfortunately I've seen nothing else from Rick that dispels my scepticism of his claim and it looks like quite a few others (including some who are hardly brexiteers) are far from convinced.

So Rick, have one more go at convincing us or we'll just have to conclude case not substantiated and move on.

ddraver

rick_chasey

https://twitter.com/bbcrosatkins/status/1586240654426148865?s=46&t=FLjG3YYvy3-KpxmDE_ijqQ

briantrumpet

Still don't know how Jeremy Warner keeps his job at the Telegrsph writing this stuff:

The rejection of tried and tested analysis, or "experts", that lay at the heart of the economic case for Brexit reached its logical conclusion in last month's mini-budget, which was so offensive to established "orthodoxies" that it threatened to blow up the entire economy.

Yet there is no turning the clock back on Brexit now. Even if a majority could be established for such a nationally humiliating course, Britain could not rejoin on the half in, half out terms once enjoyed. Next time, it would have to be all in, including the euro, and there is little appetite for that even among unrepentant Remainers.

Even so, more harmonious economic relations with our near neighbours are no longer simply a desirable goal, but a matter of urgent necessity. Splendid isolation is proving a far from happy disposition.

https://www.telegraph.co.uk/business/2022/10/29/brexit-irreversible-must-forge-stronger-economic-ties-eu/

rick_chasey

No one’s defending Brexit anymore.

What a waste of time, effort and money. For f@ck all

surrey_commuter

rick_chasey said:

No one’s defending Brexit anymore.

What a waste of time, effort and money. For f@ck all

It was ever about economics.

Surely it is too soon to give up on the German carmakers

rick_chasey

It’s not about anything else either

What has it actually done?

Jezyboy

Given us years of box office political events?

It feels like it's either been a leader gripping on by the skin of their teeth, mired in scandal or gratuitous law breaking ever since the vote.

sungod

rick_chasey said:

It’s not about anything else either

What has it actually done?

stripped uk subjects of their rights, probably more of that to come
business has increased costs/delays
driven some out of business completely

for the foreigners and non-doms for backed it, and their paid lackeys in government - they can look forward to a weakened uk (and eu), reduced regulatory oversight, easier tax avoidance and reduced workers' rights