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messageRe: the economy - update
Posted by jaywalker 28 October, 2016 13:03

According to The Times this morning the guarantees (secret but made in writing) are likely to have promised UK government subsidies for any tariff costs Nissan has to pay on their car exports from the UK post Brexit (an event that is still two years three months away). If we have to leave the customs union (after hardball by EU leaders and Belgian citizens) then that is quite a promise.

Or is this a case of 'hard exit' talk and 'realistic exit' action? With the swivel-eyed section of the Tory party haven taken over the asylum I suspect its just desperation.

In any case, it won't be the fiscal state of this government that is blown apart by what will have to be more and more of such promises now the precedent has been set, but of the next.

messageRe: the economy - update
Posted by 28 October, 2016 13:16

I'm more worried about the fiscals state of future governemnts because 'austerity' or, as realists call it, 'attempting to live within your means' has been put on the backburner by the new PM leaving us with the 2nd highest defeceit in the G8 and the tax take for last month was well below expectations - we better hope people want to still keep lending us money but our bond rates are edging up. Need that money tree soon or we are going to have to go back to 'austerity' some point soon.

I'd be reasonably optimistic on car tarrifs - the FS and other services are the ones that worry me more but 'orrible bankers' etc etc etc

The negative view about our ability to negotiate/the strength of our position and some positives that can be taken from Brexit in terms of business is just a bit grindingly depressing and thoroughly predictable from the usual suspects.

messageRe: the economy - update
Posted by 28 October, 2016 13:29

Plus the 'fact' that the EU are a universal aligned negotiating titan set on punishing us - for somewhere like Ireland we are vitally important to their economy and they won't want our economy sabotaged by Hollande's (Fr president not country) domestically focused anti-english 'hard ball'. Southern Italy won't want 100,000 young people returning and added to their horrific youth unemployment because the UK is put through the wringer by some unelected alcoholic in Luxemburg who thinks we are traitors. Compromises will be made......other events will intervene...etc

messageRe: the economy - update
Posted by DovertheRoad 28 October, 2016 14:05

"Southern Italy won't want 100,000 young people returning and added to their horrific youth unemployment because the UK is put through the wringer by some unelected alcoholic in Luxemburg who thinks we are traitors."

This is great.

messageRe: the economy - update
Posted by jaywalker 28 October, 2016 15:35

I think that could work both ways. If the EU is as disunited as you say then them reaching what has to be a unanimous agreement on the article 50 terms looks like a pipedream. The legal side is clear: no unanimity no agreement and the UK just ceases to enjoy EU membership (free trade, customs union, everything) like it or not. For sure, some countries will want to be tender-minded, others tough: but it only takes one country to scupper the entire deal.

As for the fiscal side, as you say it is out of control already. So an avalanche of promises to keep foreign companies here looks time inconsistent. With rising public borrowing it won't take much to provoke a sterling crisis, then rates shoot up and the government panics before a general election - prints money to avoid spending cuts. The soft side of the tory party always go for this. Add the not improbable rise in the oil price by then and ...

Meanwhile BBC just running news update on marmite: the price has shot up by 12.5% at certain outlets (those of us who are wise virgins got stocks in a while ago, it has a shelf life of a couple of years). As Blair (wow, can I really be becoming a Blair supporter) says - perhaps there should be some mechanism for people to express regrexit.



Edited 5 time(s). Last edit was 2016:10:28:15:40:03 by jaywalker.

messageRe: the economy - update
Posted by Lordship 516 28 October, 2016 16:25

Quids

"..... 'austerity'...has been put on the backburner by the new PM leaving us with the 2nd highest defeceit in the G8"

The current status is a result of Osbornes policies - Not May & Hammond. Public finances were coming in below expectation even before the referendum & are likely to further deteriorate over the next 4 years as evidenced in the recent reported poor tax-take last month. Hammond inherited the current public finance deterioration from Osborne who conveniently slipped out the back door physically & metaphorically before the chickens came home to roost.

Hammond will deliver his views & budget on 23rd November & he is expected to say that there will be a 'gap' in public finances in the order of about 20billion per year for the remainder of this parliament He is likely to suspend Osborne's austerity gig but only to either 1] extend the timeframe for 'balancing' the budget or 2] to separate the current budget balance requirements from investment requirements. If he does that he can have a significant surplus in the current account but can let the borrowing requirement for investment to overrun, particularly for productive purposes & stimulate much needed economic activity - a prime objective of the current administration.

The headroom created in scenario 2 will enable him to fund reversing the social security cuts that are set harming low-income families - another objective of the government. Scenario 1 is not a reasonable option as it will result in tax rises and/or spending cuts in the years after 2021 - not something he will want to embark on.

Any plan that he might propose will have to factor in the various negative effects from Brexit that will occur over the next four years & that is by no means easy for the Treasury or anyone to predict. Budgets will be very variable for the next few years. It is unlikely the Tory toffs will get their tax cuts this parliament - if he does cut taxes [except for lower paid] then this will be an act of vandalism.



Edited 1 time(s). Last edit was 2016:10:28:16:27:50 by Lordship 516.

messageRe: the economy - update
Posted by DovertheRoad 28 October, 2016 17:25

I'm scared.

messageRe: the economy - update
Posted by malumbu 28 October, 2016 18:46

Fascinaing reading, and has got my head out of the sand, briefly.

So perhaps most agree we have gone from a relatively stable and reasonably strong position to short, medium and probably long term instability. And it may take a generation to sort out and realise benefits?? When if I am still alive I can sit back in my bath chair and observe.

I'm probably stating the obvious. Right, head going back in the sand "nah nah nan I'm not listening, not listening.

Please don't respond to this post, leave it for the more informed discussion.

messageRe: the economy - update
Posted by rendelharris 28 October, 2016 19:10

Wrote:
-------------------------------------------------------
> Plus the 'fact' that the EU are a universal
> aligned negotiating titan set on punishing us -
> for somewhere like Ireland we are vitally
> important to their economy and they won't want our
> economy sabotaged by Hollande's (Fr president not
> country) domestically focused anti-english 'hard
> ball'. Southern Italy won't want 100,000 young
> people returning and added to their horrific youth
> unemployment because the UK is put through the
> wringer by some unelected alcoholic in Luxemburg
> who thinks we are traitors. Compromises will be
> made......other events will intervene...etc

Quids, you seem to strangely neglect the fact that any exit deal agreed with the UK will have to be agreed upon by every member state. it's fine to say this nation and that nation will have this and that reason to be lenient, but all of them? I think you're also underestimating the desire of the big beasts to punish the UK exit: from what I've read Germany, to take just one nation, will be prepared to take an economic hit if it means showing that member states can't just waltz out and keep the advantages of being an EU member.

messageRe: the economy - update
Posted by 28 October, 2016 20:18

So which way is it Rendel? - it has to be agreed by everyone (so includes say Ireland - who won't want us punished) or actually just Germany & France willing (maybe) and capable (probably ) of taking that hit, in contrast?

You are arguing both sides of a coin - the fact that everyone has to agree potentially plays to 'our' advantage too. There will be compromises is my hunch.

Lordship - couldn't agree more RE Osbourne responsible missing his targets but shows how difficult it is..the main reason targets have been missed is that tax take since the recovery have been below expectation...but in my opinion that's the norm in modern economies and us (and other countries) need to adjust our public spending accordingly - which means redesigning the welfare state (and i mainly mean pensions) and the NHS. But the belligerent small 'c' conservatism of their 'guardians' make this nigh on impossible - i fear we'll go bust somewhere down the line with most other european nations. No-one wants to take their medicine.

messageRe: the economy - update
Posted by jaywalker 28 October, 2016 20:27

Wrote:
-------------------------------------------------------
> So which way is it Rendel? - it has to be agreed
> by everyone (so includes say Ireland - who won't
> want us punished) or actually just Germany &
> France willing (maybe) and capable (probably ) of
> taking that hit, in contrast?
>
> You are arguing both sides of a coin - the fact
> that everyone has to agree potentially plays to
> 'our' advantage too. There will be compromises is
> my hunch.


I know I am dense and often misread your posts, but I really do not understand this at all. Of course there will be negotiations and attempted compromises after article 50. But Rendell makes the key point: try compromising when the many countries are themselves not one. So we will be going into a one way street when article 50 is triggered (there is no clause for reversal) where the outcome will be decided on whether the many EU countries agree to what May thinks she can satisfy Parliament (or perhaps just the electorate given that she seems no longer to believe in representative government) with. That does not look like a betting proposition to me, does it really to you?



Edited 1 time(s). Last edit was 2016:10:28:20:28:02 by jaywalker.

messageRe: the economy - update
Posted by rendelharris 28 October, 2016 20:33

Wrote:
-------------------------------------------------------
> So which way is it Rendel? - it has to be agreed
> by everyone (so includes say Ireland - who won't
> want us punished) or actually just Germany &
> France willing (maybe) and capable (probably ) of
> taking that hit, in contrast?

Well I'm sure you're spot on about Ireland, but the point I was trying to make is that it only takes one member state to veto any deal and the deal cannot be approved; from my admittedly limited knowledge I'd say it's more than likely that France, Germany and others will be prepared to veto and take any hit on their economy pour encourager les autres.

messageRe: the economy - update
Posted by 29 October, 2016 09:48

Germany will use an EU veto 'pour encourager les autres'! You are the ghost of Nicholas Ridley and I claim my 5 - of course they wouldn't, the eurosceptics of the EU would go ballistic and this would fuel their anger and put the whole 'project' in jeopardy - the Germans are far too pragmatic and involved in Realpolitik for such destructive 'gallic' type gesturing. There's lots of positioning going on pre-negotiations; there's lots of rhetoric aimed at domestic electorates - they are just politicians after all - the outcome will be a compromise in the end.

messageRe: the economy - update
Posted by Henry_17 29 October, 2016 19:04

,
Not to mention that one reason the posturing is particularly animated is the upcoming election schedule; France and Germany, then Italy, which creates a reasonable chance that negotiations will be being made with increasingly eurosceptic / sympathetic counterparties.

--------------------
Henry

messageRe: the economy - update
Posted by 17 November, 2016 17:42

This week:
UBS - keeping head office in London 'no plans on moving'
Google - confirm new European HQ in Kings Cross

Yesterday - inflation below expectation

Today - retail sales at their highest growth in 14 years, way above expectation

messageRe: the economy - update
Posted by jaywalker 17 November, 2016 19:34

er, right. quids, is this just cognitive dissonance on your part?

the Times today reports decisions already-taken to move financial HQs to Dublin (of course!)

Google announced that their decision was conditional on free-movement of appropriately qualified labour (oh the irony of the recent May failed trade talks given that their CEO is Indian)

The inflation figure was unchanged (unless you think the CPI a good measure of the cost of living - if you do then you are in cloud-cuckoo land) with all commentators agreeing there is significant pressure in the pipeline (what do you expect with the sterling depreciation, no cost effects ??).

And, strangely not mentioned by you, the headline in the FT today. Er, a hole in the public finances so big it will scupper all May's plans completely unless there is a huge rise in interest rates to ensure a market for the gilts they will have to sell (and that in an economy with record indebtedness).

Dr Pangloss had nothing on you quids.



Edited 1 time(s). Last edit was 2016:11:17:19:36:07 by jaywalker.

messageRe: the economy - update
Posted by Lordship 516 17 November, 2016 23:53

Wrote:
-------------------------------------------------------
> This week:
> UBS - keeping head office in London 'no plans on
> moving'
> Google - confirm new European HQ in Kings Cross
>
> Yesterday - inflation below expectation
>
> Today - retail sales at their highest growth in 14
> years, way above expectation

Google confirmed that their EMEA head office is in Dublin with over 500.000 Ft Sq committed, London office currently confirmed as UK headquarters mainly tasked to support US operations & is about 160,000 Ft Sq with a further 300,000 Sq Ft on hold subject to government being able to guarantee free movement throughout Europe....

A 25billion deficit for 2017 & 80+billion deficit up to 2020 with record public debt.....

12+% price rises on imports......

Future is looking really positive..?



Edited 1 time(s). Last edit was 2016:11:18:00:12:09 by Lordship 516.

messageRe: the economy - update
Posted by 18 November, 2016 09:09

Wrote:
-------------------------------------------------------
> This week:
> UBS - keeping head office in London 'no plans on
> moving'
> Google - confirm new European HQ in Kings Cross
>
> Yesterday - inflation below expectation
>
> Today - retail sales at their highest growth in 14
> years, way above expectation

I'm just reporting fact on that UK performance post the referendum which is currently way, way above what the pessimists were predicting widely (and on here)i didn't even add an opinion! The deficit isn't on my list (and that hole from the FT is based on forecast incidentally, which may well turn out to be true, but is still nevertheless forecast so wouldn't go om my list ) - if you followed my stuff on here on the deficit you will see that I've long believed we are fooked on that anyway (and would have been without Brexit). My point - as someone who once again I stress voted remain - is that things aren't nearly as bad as most predicted YET.

The inflation figure WAS below expectation and consensus Jaywalker - so predictions once again were wrong (see also employment/growth/retail sales...I could go on)

Your and Lordship's posts feel like they reflect your personal and political views and opinions,and on Brexit and your pessimism has thus far have been proved over pessimistic! I'm not Nigel Farage for pointing this out! I have an opinion that things won't be as bad as the most pessimistic say and so far the figures support that - that's not a Dr Pangloss - although you are winning my vote for title of Eeyore of the EDF if we are going to take on great characters of literature smiling smiley

messageRe: the economy - update
Posted by Jeremy 18 November, 2016 10:27

We need to remember that nothing's really happened yet! There's no point trying to draw any conclusions until we find out what sort of trade deal we're going to get with the EU.

messageRe: the economy - update
Posted by rahrahrah 18 November, 2016 11:33

You're right of course Jeremy, although it seems less and less likely that we'll be able to remain in the single market (not sure this was ever really very likely). With the ongoing uncertainty (which is likely to last years) and our probable departure from the single market eventually - it's hard to see how in the medium term our economy isn't going to suffer. Of course the problem is, one will never be able to demonstrate the effect either way. Whether the economy does well, or it does not, who can prove that staying in would have been better or worse? People will seek out the evidence which appears to support their view and everyone will think they've been proved right.

messageRe: the economy - update
Posted by 18 November, 2016 13:26

No all true. But what you can say - with fact - is that, even since the referendum, the economic data in many areas is significantly above the forecasta from the dismal science - and that includes the adjustments they made post referendum, being well aware that 'article 50' hadn't been triggered. We are, so far, doing significantly better than the experts consensus on how we would....

messageRe: the economy - update
Posted by Lordship 516 18 November, 2016 16:12

Quids

What you say is true - for now.

Employment indicators are lagging indicators & we are also in a time of decision lag & uncertainty. The worst has yet to come and it will not be pretty. If it won't affect you & you are well sheltered then great but most of the population will suffer.

All that the economists are saying is that in the near future to expect a worsening of unemployment, significant increases in price inflation, a downward trend in the value of the , raw materials prices up over 12% already with more rises to come. All of this is on the horizon plus a lot of instability induced because of all the uncertainty due to the many months & years of wrangling within the government and with outside governments. These factors will cause everyone in the UK a plethora of problems - economic, social & personal.

No point in being an ostrich or a lemming..... need to be realistic and plan accordingly. There is little to be optimistic about.



Edited 1 time(s). Last edit was 2016:11:18:16:18:47 by Lordship 516.

messageRe: the economy - update
Posted by jaywalker 18 November, 2016 19:35

The one I really loved this week was the news that, with record and rising employment, 19 out of 20 new jobs are going to FOREIGNERS (the word used in the headlines). So of course, all we have to do is implement immigration controls and those jobs will grow at the same rate (with the UK outside the EU ... ) with OUR PEOPLE (who in the popular press, which includes of course the unspeakable Telegraph and Times, have rather particular characteristics).

I am not sure what these press views are based upon, but my guess is that it is an adolescent mercantilist phantasy. Gather close to ourselves (those who know we are of the same essence) to stop incursion. Build fences (Calais) and walls (Mexico). Treasure our island state. Dream of perfect order. Ensure a Platonic hierarchy of everyone in their proper place (grammar schools will achieve this). Stop prisons being so 'soft' (dear god). Forget the pragmatic alliance with Europe. Stand on principle. Believe in autochthonous powers.



Edited 3 time(s). Last edit was 2016:11:18:19:51:55 by jaywalker.

messageRe: the economy - update
Posted by 18 November, 2016 21:42

all very emotive and somewhat amusing etc etc but you are aware that The Times supported Remain I presume jayw?

messageRe: the economy - update
Posted by TheArtfulDogger 19 November, 2016 09:16

Just count our blessings that we are in England and not India where demonatarisation has made obsolete around 80% of the rupees in circulation, causing issues for small businesses that rely on cash for daily transactions (fruit and veg sellers on the side of the road for example) and super long slow queues to change the old notes for new ones.

Now that has given the Indian economy a bit of a blip that makes anything we are going through (positive or negative) seem tame ... Just imagine if it happened here with 20 and 50 notes!

--------------------
Artful

messageRe: the economy - update
Posted by DaveR 19 November, 2016 10:55

"Ensure a Platonic hierarchy of everyone in their proper place"

That's not what Platonic hierarchy means

"Believe in autochthonous powers."

And this doesn't really make sense, or at least it doesn't mean what you evidently think it does.

I've said before that your posts make 'literally no sense', and to be clear I mean that they often do not have any coherent meaning if the words are understood in the conventional way, as opposed to just saying that I disagree (though I generally disagree with what you appear to be saying).

Anyway, there was quite a lot of discussion in the press/media about the reasons for the employment/jobs figures, none of which resembled even vaguely your ridiculous caricature. Regarding the actual subject of the thread, mainstream economists have largely now accepted that they were wrong about the immediate effects of Brexit, but equally warning sensibly that positive figures now just represent relief that the world didn't end, recognition that the UK economy has some fundamental strengths, and a cautious sense that there may be a minimal damage Brexit process that is achievable. Huge uncertainty remains.

messageRe: the economy - update
Posted by Jenny1 19 November, 2016 11:33

I wouldn't have expressed it exactly as jaywalker did, and of course I had to look up 'autochtonous', but I do agree with the spirit of what he's saying (in my interpretation). This would be that isolationism is very economically damaging. I'd add my own two pennyworth, which is that globalisation is not new. The Celts traded, and indeed migrated, over great distances. Turning one's back on the rest of the world has never been a route to prosperity.

messageRe: the economy - update
Posted by Lordship 516 19 November, 2016 12:03

@DaveR

"mainstream economists have largely now accepted that they were wrong about the immediate effects of Brexit,"

Not so - acceptance that there are lagging factors, including some business decisions on the part of suppliers not to pass on increasing costs for various reasons. Also, the bouyant spending has been accompanied with a significant reduction in trading margins [Next, John Lewis] - traders sacrificing profit for survival in the short term.

"...but equally warning sensibly that positive figures now just represent relief that the world didn't end,"

The positive figures are lagging figures that will progressively change over the coming months/quarters and not likely for the better.

"... recognition that the UK economy has some fundamental strengths,"

Of course the UK has some fundamental strengths but these strengths need to be conserved & supported by sensible economic & political decisions - currently uncertain & unknown with May offering no reasonable advice or direction. The economy is treading water. The only small advantage [short term] advantage is the /$ rate that is sustaining exports - for now. This advantage will erode soon as new raw materials purchases will cost up to 20% more. As demand for raw materials will increase, this will impact even more so it a huge challenge for many businesses to keep going let alone make profit. Disadvantaging business by making access to the EU markets difficult/uncertain doesn't make sense by any measure.

"... and a cautious sense that there may be a minimal damage Brexit process that is achievable."

Minimal is wishful thinking. More likely that the impacts aill be significant & long term with the UK having to slog our way back to relative economic health over a long period. Every day that passes without decision/definition is further disadvantaging the UK's position and enables competitors to take advantage & consolidate their respective positions.

"Huge uncertainty remains."

This is for sure and the most/only important part of your post.



Edited 1 time(s). Last edit was 2016:11:19:12:05:41 by Lordship 516.

messageRe: the economy - update
Posted by uncleglen 19 November, 2016 12:15

No-one is turning their backs on the rest of the world- hopefully we are turning our backs on 750 pretty useless and expensive politicians....all they have done is undermine the UK since we joined in 1973-farming, fishing, manufacturing, self-determination - destroyed by the collusion of the quasi socialists in France, Germany, Italy and Belgium in the main....
'People' were bemoaning the fact that Brexiteers had been conned by false information (and it was even said that on the strength of the 'truth' coming out about the implications that many of them wanted to change their vote)- when in fact it is now obvious that the remainers had been lied to by the doom-mongers (obviously with self-serving interests in staying in). How many remaniacs/remoaners would like to change their vote now?

messageRe: the economy - update
Posted by malumbu 19 November, 2016 13:27

Thanks for your postings uncleglen. As someone without a business/economics background always useful to hear the other side of the argument. I've been around more than half a century (from relatively humble stock) but don't recognise the Britain that you are talking about from my childhood. It was all pretty grim and black and white from memory. Well you've clearly got some strong views and I am sure that you will be reminding us of it.

But perhaps going back to my childhood there were lots of positives. We wore short trousers irrespective of the weather. We were slapped with a ruler by the teacher for being the slightest bit naughty. We were intolerent of other nationalities, sexual preferences and other beliefs. We were encouraged to throw stones at the 'queer' (odd) kids at school just because nobody knew about (or appreciated) childhood mental health issues and behavioural issues. It was your civil duty to shout 'mong' at anyone who looked slightly weird. Men knew their place in society, and women even more so. Most of us smoked (even as children) and all benefited from the more sociable office, pub and eateries environments. And we had iced buns for treats, and were allowed to spend our bus money on sweets if we walked home. None of this nonsense about health, diet and nutrition. And I still have a few teeth left, some of the front ones don't even have fillings. We had that excellent currency where you had to divide things by 12 or times by 20. Not all this silliness about multiples of ten. Thank God Napolian didn't win.

And we all bought Austin (ie British Leyland) cars as they were made very well locally. It is clearly a clearly a quasi socialist dirty foreigner plot to pretend otherwise. Those bally useless VW golfs. What rubbish.

Ah takes me back.

But there was an unsavoury side to all of this. As kids of 9 or 10, we walked home from school past a chap of around 40, building his own house. He invited us, to ...... show us his bulding work. We'd pop in most days to see how he was getting on. My parents came past one day and thanked him for being so friendly. He didn't even get his John Thomas out once. So not everything about pre-1973 Britain was great.

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