Brexit reflections 10 weeks on

[JoeLeg]

The wobbles experienced by the UK in the immediate aftermath were dealt with by Mark Carney, and have thankfully passed. The question of course is what comes next.

It really is early days, and I don't think Brexit itself will cause any more economic shocks on its own - there's too much at stake for the government to allow that - but I do think that we're in for a fairly tumultuous ride as those in power work out what they actually want to do, and the Leave voters start to understand what their vote is going to ultimately end up translating into.

There are so many complex issues at stake that I think some of them are going to end up disappointed that Brexit doesn't mean what they thought it would mean. I think it's almost inevitable in an issue so complicated - which was reduced down to such oversimplicity during the campaign (which I hold both sides responsible for) - that there will be voters who feel they didn't get what they want.

Now that we're commited to it, I'm honestly most concerned over the issues of immigration and the single market. If the EU decides to dig in over that this will get messy. This is a really complex issue which was turned into sound bites and emotions in order to swing votes either way; now we have to figure out what it will actually mean.

[????]

yup - all good points Joe

[JohnL]

I see the legal challenge being successful and a commons vote being ordered to be honest.

[Otta]

RE House prices, I can't see them falling dramatically whatever happens (not that I am in any way an expert). There simply aren't enough houses on the market, and there will always be more people wanting to but them, than houses available.

[Otta]

A flat on our estate has just gone up for sale. It's the same as ours (well mirror image), and on the third floor (ours is first). It's on for ?115k more than we paid for ours 2 and a half years ago (and indeed ?155k than the same flat was bought for 3 years ago).

I can't see them getting what they're asking for, but even if they got ?25k less, I'd still be amazed.

[????]

JohnL Wrote:

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> I see the legal challenge being successful and a

> commons vote being ordered to be honest.

...and you think a commons vote would overturn Brexit IF that happened anyway? Wishfull thinking.

[JoeLeg]

May is running the "Brexit means Brexit" line heavily, and a large number of MP's have already said they won't vote against it. They know they'd get decimated at the GE.

They won't even waste time putting it to a vote, I reckon.

(Edit - Although it would give Corbyn the chance to vote for Brexit, like he always wanted to!)

[red devil]

Joe, can you quantify 'large number', and how many of them were Remainers?...

[JoeLeg]

red devil Wrote:

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> Joe, can you quantify 'large number', and how many

> of them were Remainers?...

Well now there's an excellent counterpoint.

No, I can't. What I will say is that I noticed, in the immediate period after the referendum, at least ten MP's openly stating on blogs and in interviews that they would not be willing to vote against a referendum.

While I agree that my language was anecdotal at best, I would also argue that very few MP's are likely to take the chance in voting against it. In order to do so you would have to be very, very sure that you're constituency was solid Remain, and that you wouldn't be challenged by any candidate riding a populist message of "respect the will of the people!".

So, in answer, no, I can't back a lot of that up because I can't remember where I read most of them. But I think the point still stands.

[JohnL]

JoeLeg Wrote:

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> May is running the "Brexit means Brexit" line

> heavily, and a large number of MP's have already

> said they won't vote against it. They know they'd

> get decimated at the GE.

>

> They won't even waste time putting it to a vote, I

> reckon.

>

>

> (Edit - Although it would give Corbyn the chance

> to vote for Brexit, like he always wanted to!)

On Mays shoulders may it be then :)

I wonder what people will think of her in 10 years (people tend to lie about how they vote).

[Blah Blah]

May has no choice but to spin the brexit means brexit line. Two thirds of conservative voters voted for it. She also has a party full of eurosceptics.

[????]

..and this morning, Manufacturing PMI up from 48 to 53 the 2nd biggest jump in 25 years (and ahead of a forecast of 49). Now, just where are our resident forum economists with their post-Brexit models and predictions? :)

[JohnL]

???? Wrote:

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> ..and this morning, Manufacturing PMI up from 48

> to 53 the 2nd biggest jump in 25 years (and ahead

> of a forecast of 49). Now, just where are our

> resident forum economists with their post-Brexit

> models and predictions? :)

Allegedly it's when higher import prices (for components etc.) kick in that bad stuff starts.

Maybe the movers and shakers can get round that by producing stuff here :)

[JohnL]

What's this about Boris not having any notes at the meeting. Did he really not do his homework as he was told.

Bad Boris

[nxjen]

Blah Blah Wrote:

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> May has no choice but to spin the brexit means

> brexit line. Two thirds of conservative voters

> voted for it. She also has a party full of

> eurosceptics.

I think it's also aimed at Europe. If the UK leave the EU, the EU will be weakened and it could be the beginning of the end, there are other members where the electorate would also vote to leave given the chance. So May's message to the EU is to reform to survive because Brexit means Brexit. Strategy and brinkmanship.

[Jenny1]

I think the central point for me is that we can't possibly know how any of this is going to pan out. We'll be in a situation of uncertainty over a lot of things for some time to come.

Our government has no plan, neither do the other EU member states. Everyone's making it up as they go along. If you could separate out the costs of civil service time in managing this over the next few decades, I wonder what the bill would be?

I take some comfort in the fact that TM is no fool. I just wish we had a functioning opposition who could contribute something to the process. And I still can't help shaking my head in disbelief that it's the Tories (guardians of stability, anyone?!) who've led us down this path. Just reading the very good biography of the Italian writer and demagogue who presaged fascism, Gabriele d'Annunzio, and trying not to look for current global parallels!

[jaywalker]

???? Wrote:

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> ..and this morning, Manufacturing PMI up from 48

> to 53 the 2nd biggest jump in 25 years (and ahead

> of a forecast of 49). Now, just where are our

> resident forum economists with their post-Brexit

> models and predictions? :)

I think its worth distinguishing income and relative-price effects. The pound tanked after the referendum, so manufacturers got a much needed boost to export price competitiveness (at least those who don't rely too much on imported components and materials). But if they have no market and no access to European labour in two to three years time it doesn't really matter if their goods are relatively cheaper. That is, the income effects don't kick in until 2 years after article 50 has been triggered (apart from in London where the financial system will implode far faster - see the visit of the Polish prime minister today to encourage firms to go to Warsaw.) By the way, its standard Keynesian economics that the full effect of the income shift will only be one to two years after that.

[????]

yup - but my point is we haven't fallen off a cliff yet and there is no signs of it, in fact things are going in the opposite direction right now - in contrast to much of the coverage in the media and among our 'experts' on here the week post-Brexit. The line of the pessimist now taken is yours - on well it will be worse later, from many who said it would be terrible by now. Of course we don't know the future but the initial pessimism was wrong - expect GDP forecast etc to shift back up again now.

We'll have markets and labour in 2 years time too for reasons that have been much discussed already.

[johnki]

Let's remember of course, many of the direst predictions were based on the assumption article 50 was invoked the day after as Cameron promised to do.

[????]

Which he said wasn't going to happen that morning - the dire predictions continued.

[Jenny1]

Perhaps partly because there were still many leading politicians pushing for a rapid triggering of Article 50 - and no-one knew how sane (or otherwise) the next Prime Minister was going to be. I would still argue that if we don't have a sensible, substantive plan in place before 'pushing the button' it will lead to further instability. And I see no such plan in sight.

[Jules-and-Boo]

well the EU is p***ing of the USA (think they're picking on their baby Apple) and I can't see that they're any nearer to the golden trade agreement that they were so positive about (remember Obama saying Britain would be pushed to the end of the queue?). Funny, US says they are, EU says it unlikely to be soon....

The threats are just not materialising.

[JohnL]

Jules-and-Boo Wrote:

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> well the EU is p***ing of the USA (think they're

> picking on their baby Apple) and I can't see that

> they're any nearer to the golden trade agreement

> that they were so positive about (remember Obama

> saying Britain would be pushed to the end of the

> queue?). Funny, US says they are, EU says it

> unlikely to be soon....

>

> The threats are just not materialising.

It was never about the short term for me - the argument somehow

ended up being about the short term, maybe because that's how people

think these days.

We are out for ever (or 41 years if you count between referendums)

Nobody came up with an idea of what we'll be like in 30 years. Farage

seems to see the 1950s as some sort of ideal. Will relations with the

rest of the EU sour to an extent we join another block (NA or Russia).

[Lordship 516]

???? Wrote:

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> Anyway, back to the economics

>

> Consumer Confidence up this morning (gfK),

> houseprices slightly ahead (Nationwide), when we

> add recent highs for FTSE 100 and 250, record

> levels of employment, and growth currently above

> pre-brexit forecasts - the wheels certainly aren't

> falling off yet as many foretold...including some

> 'experienced modellers' on here. Appreciate it's

> still early days.

Yep, quids - its early days; employment figures were for April to June when the market sentiment was in favour of Remain. Already input costs are rising - we are poorer, there are some short term 'gains' but lets see what the July to Sept & Oct to Dec data will bring - I don't think they will paint a pretty picture.

Just as the July PMI/Markit fall was a pessimistic reaction, so is the apparent optimistic rebound at 5-points. The pound's rally of 1c is being reported as a 'surge' but it is still down by 10.8% & is expected to reach near parity with the Euro before the end of the year. China's Caixin/Markit index, which had showed signs of recovery in July [50.6] has now shown signs of stagnation in August [50] with output, new orders and stocks of purchase all declined from the previous month - so the outlook worldwide for the next three to six months doesn't look so rosy.

The rates of input increases has kept pace with the fall in currency value [food materials - +10.6%, commodities +12% to 15%] and output charges are steadily rising also - manufacturers/suppliers can only hold prices for so long in an already challenging market.

It's early days to pass judgement on whether the recent growth will be sustainable - the best one can say is that the recent the weak pound & BoE policy actions have averted a disastrous downturn - for now at least.

[Lordship 516]

???? Wrote:

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> yup - but my point is we haven't fallen off a

> cliff yet and there is no signs of it, in fact

> things are going in the opposite direction right

> now - in contrast to much of the coverage in the

> media and among our 'experts' on here the week

> post-Brexit. The line of the pessimist now taken

> is yours - on well it will be worse later, from

> many who said it would be terrible by now. Of

> course we don't know the future but the initial

> pessimism was wrong - expect GDP forecast etc to

> shift back up again now.

>

> We'll have markets and labour in 2 years time too

> for reasons that have been much discussed already.

Quids, GDP is a relative measure and has to be valued on the basis of PPP [Purchasing Power Parity] - right now actual GDP per person PPP in the UK has fallen by more than 10% simply because of the fall in the value of the ? - so where is the gain in a growth rate of 2.2% ? Our assets [both national & personal] have been devalued - is this optimistic ?