Another new Brexit thread

[Chippy_boy]

perhaps you could ask your mates at Bloomberg economics why since we left the eu has the pound strengthened against both the euro and the dollar, whereas the euro has weakened against both the pound and the dollar.

We're not talking big swings either way mate but it was 1.32 GBP/USD on close of business on Jan 31 and today we're at 1.30. So down slightly.

GBP/EU has gone from 1.19 to 1.20

These are trivial movements really.

EDIT: Posted above already I see.

 

[BobKowalski]

so it’s just another wrong opinion by an expert. It’s not a fact as you painted it.

the euro is important as it’s the currency of the eu.

perhaps you could ask your mates at Bloomberg economics why since we left the eu has the pound strengthened against both the euro and the dollar, whereas the euro has weakened against both the pound and the dollar.

I would have thought , given the predictions of many, the opposite would have been the case ?

The pound has strengthened against the dollar as it was marked down previously because of political uncertainty regarding the passage of the Withdrawal Agreement. It has little to do with the relative performances of the two economies given the growth in the US economy vs UK economy.

The growth in the US economy has been built on Govt stimulus and ballooning the deficit and the debt which theoretically should also happen this year to the UK economy (last quarter UK growth was zero and only achieved this via Govt spending in the economy). Now that we have accepted there will be trade barriers there will be a need for Govt spending on infrastructure, extra personnel, IT systems etc along with private sector spending on increased warehousing and extra personnel and systems for the additional administration costs to do business. The new NI protocols alone should see a significant boost in spending to overcome increased friction in internal trade.

Countries like Germany will not be pumping this sort of money into their economies but instead faces a more difficult world environment for its exports which will have a greater drag effect on the economy as they are more export driven then the UK which is relatively weak in exports by comparison.

Assuming the UK does what it should be doing then the UK should have greater growth than Germany in 2020 because it will have to re-engineer its economy.

 

[blueinsa]

 

[west didsblue]

Stop doing it then.

 

[blueinsa]

Stop doing it then.

In, out, in, out we shake it all about.............

 

[SebastianBlue]

I went Spain last year and waited for an hour and a half at immigration, with hundreds of others.

Ever since the referendum none of the predictions have materialised, in fact the complete opposite has happened.
Now we're out, another one has crashed and burned, pound up, euro down, yet another doom scenario down the pan.
Still, I suppose we still need to keep fretting about non tariff barriers, that's bubbling away on the back burner.

To be fair, most of the negative economic forecasts/predictions are based upon when we *functionally* leave the EU, which we haven’t done (with the forecasts varying considerably depending on the outcomes of negotiations before and after the transition period ends). We are functionally still in the EU during the transition period — the official exit was largely symbolic.

So it’s fundamentally incorrect to deem most positive (pro-Brexit) or negative (anti-Brexit) predictions/forecasts accurate or inaccurate at this point.

It would be like predicting that City will smash Madrid in the Champions League when the tie is announced, buying your away ticket, finally traveling to Madrid a few weeks later, and then immediately upon entering the Bernabéu declaring your prediction correct. The match still has to be played.

If we negotiate well and fairly comprehensively before we functionally leave, then many of the negative predictions may never become a reality. And that should be the target for us all, regardless of which side you consider yourself on, now that the process is in flow.

But we won’t know if the vast majority of the Brexit impact forecasts/predictions are accurate for some time.

 

[Ancient Citizen]

Nope, we are in a transition period of alignment. When we fully leave, likely with no deal because the idiots in charge of this don't know what they're doing, then we can discuss the shit show. If you don't appreciate this is the case then I'm afraid you don't understand what is going on right now.

You and other remainers have been calling everything since the referendum an ongoing shit show, for nigh on 4 years now.
Because it's transpired that said shit show was, well, bollox,, it's now only a probable shit show destined for the future.

 

[Ancient Citizen]

If we negotiate well and fairly comprehensively before we functionally leave, then many of the negative predictions may never become a reality. And that should be the target for us all, regardless of which side you consider yourself on, now that the process is in flow.

A fair point.

 

[bluejon]

You and other remainers have been calling everything since the referendum an ongoing shit show, for nigh on 4 years now.
Because it's transpired that said shit show was, well, bollox,, it's now only a probable shit show destined for the future.

Ancient Citizen, I have been 100% consistent since I started posting on here. The shit show doesn't start until we fully leave, which we haven't yet. This crap about 'we're out and everything's fine' is just that, crap. When we're fully out then you can start telling me my predictions were bollocks if everything is wonderful. I have said many times, I hope I'm wrong. I don't want the country to fall to shit, but I don't think i'm in for any surprises. You on the other hand......

 

[Gareth Barry Conlon]

In, out, in, out we shake it all about.............

Are you talking about Northern Ireland?

 

[Ancient Citizen]

When we're fully out then you can start telling me my predictions were bollocks if everything is wonderful. I have said many times, I hope I'm wrong.

Fine, my suggestion would be to ditch the predictions and discuss the actual events. I'm not being sarky here, but we
have been subjected to nothing but forecasts, (not just from you), and none, as yet, have borne fruit, and I'm of the opinion
that they won't.

 

[west didsblue]

Ancient Citizen, I have been 100% consistent since I started posting on here. The shit show doesn't start until we fully leave, which we haven't yet. This crap about 'we're out and everything's fine' is just that, crap. When we're fully out then you can start telling me my predictions were bollocks if everything is wonderful. I have said many times, I hope I'm wrong. I don't want the country to fall to shit, but I don't think i'm in for any surprises. You on the other hand......

Making a prediction about what will happen in 2021 is pointless until we know if the government is serious about unaligning us from the EU and erecting non-tariff trade barriers. If they are serious, I predict a shit show. If the final agreement largely maintains the status quo nothing dramatic will happen.

 

[bluejon]

Fine, my suggestion would be to ditch the predictions and discuss the actual events. I'm not being sarky here, but we
have been subjected to nothing but forecasts, (not just from you), and none, as yet, have borne fruit, and I'm of the opinion
that they won't.

I hope you're right. I'm well aware of the dangers of making predictions regarding something that has never been attempted before (a major EU power leaving the EU) but I'm also aware of the complete lack of interest the government is showing relating to the technical process that is required to allow us to exit without a shit show. It's all good and well Johnson waving his flag about, but it would be nice if people from his government would actually engage with the civil service and start building the capacity for us to deal with brexit. This is simply not happening, I suspect because the government wants to point fingers at the 'remainer' civil service when it all goes tits up.

 

[BobKowalski]

You and other remainers have been calling everything since the referendum an ongoing shit show, for nigh on 4 years now.
Because it's transpired that said shit show was, well, bollox,, it's now only a probable shit show destined for the future.

No. There were some immediate effects from the referendum which have been modelled. For example the following from the FT.

 

[bluejon]

Making a prediction about what will happen in 2021 is pointless until we know if the government is serious about unaligning us from the EU and erecting non-tariff trade barriers. If they are serious, I predict a shit show. If the final agreement largely maintains the status quo nothing dramatic will happen.

Agreed, but the signs are not looking good at the moment.

 

[Gareth Barry Conlon]

Ancient Citizen, I have been 100% consistent since I started posting on here. The shit show doesn't start until we fully leave, which we haven't yet. This crap about 'we're out and everything's fine' is just that, crap. When we're fully out then you can start telling me my predictions were bollocks if everything is wonderful. I have said many times, I hope I'm wrong. I don't want the country to fall to shit, but I don't think i'm in for any surprises. You on the other hand......

This is true but there are two factors here:

1 We have not changed anything yet so we should wait and see the full extent of the impact. But....

2 The negative impacts started in the run up to the referendum as the prospect of a leave vote became a thing. The pound was heading down in the run up to the vote and dropped furtehr after the vote. There is no upside to running your currency down on this basis, I dont want to get in to complex economics but in the simplest terms devaluing a currency by increasing the liquidity supply is a viable move it has pros and cons, running a currency down without incresing the money supply is just basic bad economic policy. The impact is that everything we buy as a nation and our debt servicing costs, as we buy on credit, costs us more. In addition there is the perception issue - brexit is a big unknown and that is a turn of for business, in a difficult global economic environment we become the target for cuts. The Honda pull out is unquestionably driven by brexit and many more will be in the planning stage. The impact of the lower value of the pound and the perception of brexit being a turn off for business investment is behind the cost etimate of circa £170bn to date. You can stick you fingers in your ears all you want but there is a very real negative effect that is ongoing even before we actually do anything as per point 1.

 

[bluejon]

This is true but there are two factors here:

1 We have not changed anything yet so we should wait and see the full extent of the impact. But....

2 The negative impacts started in the run up to the referendum as the prospect of a leave vote became a thing. The pound was heading down in the run up to the vote and dropped furtehr after the vote. There is no upside to running your currency down on this basis, I dont want to get in to complex economics but in the simplest terms devaluing a currency by increasing the liquidity supply is a viable move it has pros and cons, running a currency down without incresing the money supply is just basic bad economic policy. The impact is that everything we buy as a nation and our debt servicing costs, as we buy on credit, costs us more. In addition there is the perception issue - brexit is a big unknown and that is a turn of for business, in a difficult global economic environment we become the target for cuts. The Honda pull out is unquestionably driven by brexit and many more will be in the planning stage. The impact of the lower value of the pound and the perception of brexit being a turn off for business investment is behind the cost etimate of circa £170bn to date. You can stick you fingers in your ears all you want but there is a very real negative effect that is ongoing even before we actually do anything as per point 1.

Agree with all your assessment there and will add a further point. In the time since the referendum, the behaviour of our government has managed to significantly reduce our 'soft power' abroad. Britain has always been seen as something of a well of sanity, we've lost that now. The respect we've lost we will never get back, and that has definitely hurt us. But all of this is fuck all compared to what is going to happen unless Johnson's gov start getting their finger out and actually start planning for what comes next.

 

[Vic]

Just when you thought everything was going well... (specially for Valentine's Day)

 

[Vic]

The pound has strengthened against the dollar as it was marked down previously because of political uncertainty regarding the passage of the Withdrawal Agreement. It has little to do with the relative performances of the two economies given the growth in the US economy vs UK economy.

The growth in the US economy has been built on Govt stimulus and ballooning the deficit and the debt which theoretically should also happen this year to the UK economy (last quarter UK growth was zero and only achieved this via Govt spending in the economy). Now that we have accepted there will be trade barriers there will be a need for Govt spending on infrastructure, extra personnel, IT systems etc along with private sector spending on increased warehousing and extra personnel and systems for the additional administration costs to do business. The new NI protocols alone should see a significant boost in spending to overcome increased friction in internal trade.

Countries like Germany will not be pumping this sort of money into their economies but instead faces a more difficult world environment for its exports which will have a greater drag effect on the economy as they are more export driven then the UK which is relatively weak in exports by comparison.

Assuming the UK does what it should be doing then the UK should have greater growth than Germany in 2020 because it will have to re-engineer its economy.

Is "re-engineer its economy" a euphemism for spend spend spend / debt debt debt?

 

[Vic]

Let me explain more clearly:

I fully admit that in my ardent Remainer days, I got swept up in it all and my thinking was very binary and not at all balanced. I didn't start out like that: Before the referendum I was quite undecided as to which way to vote. But having backed a certain camp, my position became more and more and more entrenched and eventually I could not see the wood for the trees and would claim black was white if it supported by Remain argument. It's very tribal and that sort of lack of objectivity, lack of empathy for the opposing point of view can been seen all across these pages.

Having switched sides, I am not now saying I am perfect and beyond such faults. But I can say I can see both sides' positions rather more clearly than my emotions enabled me to see them previously. Things are more "nuanced".

I am still a Remainer at heart - I wish we had never left. But now that we have, I am not going to spend the rest of my life banging on (as some on here are doing) about how terrible it is and every intricate detail of every little problem that we will inevitably encounter. What on earth is the point of that? It is what it is. We are where we are. We have to get on with it and make the best of it. I am naturally VERY much a glass half full kind of person and will look for positives wherever I can find them. And yes, there are positives to Brexit. I didn't like us being told what to do by a bunch of bureaucrats running a system of "questionable" democratic processes. I didn't like some of the rules we had to live under - like not being able to protect or support our own industries, for example. And I didn't like the fact the EU as a whole is way left of my own political leanings.

There is opportunity for the UK to do well outside of the EU and I hope we can grasp the opportunity.

Thank you for the reasoned approach. So much nicer than calling me a sad git.