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Brexit Referendum Superthread
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Slightly confused here. Wasn't the spectre of Turkish accession to the EU used by the Leave side as a reason for leaving?
Helping Turkey in its EU bid is then....what? Is it a U-turn, or something entirely non-Euclidean?
confused,
Scofflaw
I can only hope it is an attempt by the British to try and extract some sort of leverage in the upcoming negotiations with the EU. Otherwise, I don't know what they're on about. These clowns simply haven't a clue what they're doing.
I honestly can't understand why the hell BoJo is so popular, has anyone heard the amount of bull he's been spouting at the Turks with the washing machines and all this crap? Only a few months ago he was telling those of us in the UK that we might have Turkey in the EU if the UK stayed, now he's going around sucking up to them:mad:.0 -
captainspeed wrote: »I can only hope it is an attempt by the British to try and extract some sort of leverage in the upcoming negotiations with the EU. Otherwise, I don't know what they're on about. These clowns simply haven't a clue what they're doing.
I honestly can't understand why the hell BoJo is so popular, has anyone heard the amount of bull he's been spouting at the Turks with the washing machines and all this crap? Only a few months ago he was telling those of us in the UK that we might have Turkey in the EU if the UK stayed, now he's going around sucking up to them:mad:.
Well he is part Turk.0 -
A Tyrant Named Miltiades! wrote: »Interesting article on the front page of this morning's Financial Times, with an interview by the CEO of Axel Springer.
One of Germany's most prominent businessmen, he said that "Britain was bound to experience short-term pain as a consequence of its June 23 vote to quit the EU, “but in three to five years from now, my bet would be that England will be better off than continental Europe”".
A lot of things can happen in three to five years and I wouldn´t trust Mr Springer too much on his prediction.
https://www.ft.com/content/ec53be7c-819d-11e6-bc52-0c7211ef3198
I think there's no doubt about the short-term costs of Brexit, given the UK's disastrous combination of weak manufacturing capacity and its trade deficit in goods. Eventually though, that problem will solve itself. Capital loves an opportunity. I think this is one of the more honest, baggage-free predictions.
That´s more like it (re the part highlightened in bold).0 -
Simple I think: they didn't want Turkey to be part of the EU as long as the UK is also part of it; but as long as the UK is on the way out they would rather see Turkey in the EU.
A bit like the US : they would never sign any deal which allows free movement of Turkish citizens to the US, but they are happy to encourage European Countries to do that.
The Brits play a minor role in that in compare to Mr Erdogan himself and he´s with his present government the core reason that puts Turkey´s EU accession decades away. The Eastern EU member states have also no interest to get the Turks in and I do hope that Mrs Merkels days as Chancellor are counted and that she will lose the next GE in 2017.
Turkey is on the "fast track" into becoming a consolidated dictatorship disguised as "presidential democracy" with Erdogan getting the main power in the state concentrated in his hands and that´s what he always was after and that´s what he seeks to accomplish, even more so after the failed July plot which he took as the perfect opportunity to silence the opposition. The EU cannot allow herself to take Turkey in as a member in the current circumstances because it would mock their own values to do so.0 -
captainspeed wrote: »I can only hope it is an attempt by the British to try and extract some sort of leverage in the upcoming negotiations with the EU. Otherwise, I don't know what they're on about. These clowns simply haven't a clue what they're doing.
I honestly can't understand why the hell BoJo is so popular, has anyone heard the amount of bull he's been spouting at the Turks with the washing machines and all this crap? Only a few months ago he was telling those of us in the UK that we might have Turkey in the EU if the UK stayed, now he's going around sucking up to them:mad:.
That´s Johnson at his best, the utter polit-clown. A complete weirhead.0 -
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A Tyrant Named Miltiades! wrote: »I think there's no doubt about the short-term costs of Brexit, given the UK's disastrous combination of weak manufacturing capacity and its trade deficit in goods. Eventually though, that problem will solve itself. Capital loves an opportunity. I think this is one of the more honest, baggage-free predictions.
The problem with CEOs is they think in macro terms rather than micro terms. Big business will do well, but it is the average UK citizen that will pay the price in terms of living standards. At the moment 48% of their exports are to the EU, a relative wealth market in which they have preferential treatment. Take that away and the only way to compete is to cut costs and that means wages and jobs.0 -
captainspeed wrote: »I can only hope it is an attempt by the British to try and extract some sort of leverage in the upcoming negotiations with the EU. Otherwise, I don't know what they're on about. These clowns simply haven't a clue what they're doing.
I honestly can't understand why the hell BoJo is so popular, has anyone heard the amount of bull he's been spouting at the Turks with the washing machines and all this crap? Only a few months ago he was telling those of us in the UK that we might have Turkey in the EU if the UK stayed, now he's going around sucking up to them:mad:.
He's always been great fun on 'Have I Got News for You'.0 -
Deleted User wrote: »He's always been great fun on 'Have I Got News for You'.
I never liked that chap due to the fact that I have a deep dislike for the big mouth over-selfimportant characters.0 -
Deleted User wrote: »He's always been great fun on 'Have I Got News for You'.
If only Angus Deayton stayed away from the charlie, what a different world we would live in today:D0 -
Mr Döpfner might want to remind himself of Axel Springer's five corporate principles:A Tyrant Named Miltiades! wrote: »Interesting article on the front page of this morning's Financial Times, with an interview by the CEO of Axel Springer.
One of Germany's most prominent businessmen, he said that "Britain was bound to experience short-term pain as a consequence of its June 23 vote to quit the EU, “but in three to five years from now, my bet would be that England will be better off than continental Europe”".
https://www.ft.com/content/ec53be7c-819d-11e6-bc52-0c7211ef3198- To uphold liberty and law in Germany, a country belonging to the Western family of nations, and to further the unification of the peoples of Europe.
- To promote the reconciliation of Jews and Germans and support the vital rights of the State of Israel.
- To support the Transatlantic Alliance and maintain solidarity with the United States of America in the common values of free nations.
- To reject all forms of political extremism.
- To uphold the principles of a free social market economy.
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A Tyrant Named Miltiades! wrote: »Interesting article on the front page of this morning's Financial Times, with an interview by the CEO of Axel Springer.
One of Germany's most prominent businessmen, he said that "Britain was bound to experience short-term pain as a consequence of its June 23 vote to quit the EU, “but in three to five years from now, my bet would be that England will be better off than continental Europe”".
I assume he meant that the rest of Great Britain would be fecked but the South East of England will carry on and be better off out of the EU.
I think that might be correct about the SE of England, but I doubt that they will be better off than continental Europe, unless he means just the non-EU parts of Europe.0 -
Thomas_... wrote: »The Brits play a minor role in that in compare to Mr Erdogan himself and he´s with his present government the core reason that puts Turkey´s EU accession decades away. The Eastern EU member states have also no interest to get the Turks in and I do hope that Mrs Merkels days as Chancellor are counted and that she will lose the next GE in 2017.
Turkey is on the "fast track" into becoming a consolidated dictatorship disguised as "presidential democracy" with Erdogan getting the main power in the state concentrated in his hands and that´s what he always was after and that´s what he seeks to accomplish, even more so after the failed July plot which he took as the perfect opportunity to silence the opposition. The EU cannot allow herself to take Turkey in as a member in the current circumstances because it would mock their own values to do so.
For sure, it doesn't make any sense for the EU to entertain a Turkish application and the EU should tell the UK to get lost (especially since they are on the way out).
But having said that I don't understand why people find their new position that cryptic.
If you assume that the UK diplomatic service doesn't think Turkey inside the EU is good for EU members, but thinks Turkey inside the EU is good for the EU's partners*, their change of behaviour is very consistent and doesn't imply a change of opinion - just a reassessment what their national interest is based on their upcoming changing status (they are now a member and will soon be a partner) .
* Which clearly would also be the view of the US as they have been pushing the EU to accelerate membership discussions with Turkey0 -
That's not what he said, and I see no reason to impute it to him.Sam Russell wrote: »I assume he meant that the rest of Great Britain would be fecked but the South East of England will carry on and be better off out of the EU.
I have always believed that the biggest economic problem facing Britain is not necessarily the status of the City of London (about which such fabulously bonkers predictions were made on this thread, in the hysterical aftermath of the Referendum), but rather, the biggest problem is the lack of domestic industry. Britain's trade deficit in goods is a major problem.
The City is staying put, and will remain a tremendous asset. If the UK can focus on redeveloping its industrial base, presumably in the north of England, it can probably come out of Brexit fairly unscathed, and in fact outperform the rest of the EU.
That's a crucial aspect of the Axel chief's comments that hasn't been remarked upon. He didn't say the UK is necessarily going to sit at the apex of the world economy, he said the UK will soon outperform the EU. I think that's very possible, considering the unresolved problems with Euro-area governance and the lack of economic integration or strategic planning for the bloc.0 -
A Tyrant Named Miltiades! wrote: »I have always believed that the biggest economic problem facing Britain is not necessarily the status of the City of London (about which such fabulously bonkers predictions were made on this thread, in the hysterical aftermath of the Referendum), but rather, the biggest problem is the lack of domestic industry. Britain's trade deficit in goods is a major problem.
Having worked in the UK during the 80s, 90s and 00s, I can't see that Brexit is going to cause any great resurgence in industry in the UK.
There are major cultural factors which have contributed to a steady decline in British industry from the second world war onwards. Engineering in the UK is almost a dirty word, despite some excellent engineering companies which prove the rule. Compare with Germany or Ireland where engineering is (broadly speaking) a respected occupation. I really can't see Brexit changing that, unfortunately.0 -
A Tyrant Named Miltiades! wrote: »That's not what he said, and I see no reason to impute it to him.
I have always believed that the biggest economic problem facing Britain is not necessarily the status of the City of London (about which such fabulously bonkers predictions were made on this thread, in the hysterical aftermath of the Referendum), but rather, the biggest problem is the lack of domestic industry. Britain's trade deficit in goods is a major problem.
The City is staying put, and will remain a tremendous asset. If the UK can focus on redeveloping its industrial base, presumably in the north of England, it can probably come out of Brexit fairly unscathed, and in fact outperform the rest of the EU.
That's a crucial aspect of the Axel chief's comments that hasn't been remarked upon. He didn't say the UK is necessarily going to sit at the apex of the world economy, he said the UK will soon outperform the EU. I think that's very possible, considering the unresolved problems with Euro-area governance and the lack of economic integration or strategic planning for the bloc.
Care to lay some hysterically long odds bets against this being the case given your certainty?0 -
About 50% of the UK's economy is already related to manufacturing. It's got one of the biggest manufacturing economies in the world. For example, it has a 20% market share in global aerospace industry.Having worked in the UK during the 80s, 90s and 00s, I can't see that Brexit is going to cause any great resurgence in industry in the UK.
There are major cultural factors which have contributed to a steady decline in British industry from the second world war onwards. Engineering in the UK is almost a dirty word, despite some excellent engineering companies which prove the rule.
the problem is not that UK can't manufacture, the problem is that it is currently focused on the export of sophisticated goods. It now needs to re-balance a bit, continuing to produce high quality, sophisticated goods in aerospace, bio-sciences and automobiles, but it needs to work on its unsophisticated goods for the domestic economy which it currently imports from the rest of the world, and upon which it is currently over-reliant.
The North of England is a ripe opportunity for unsophisticated industry.0 -
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And care to list out how much of that belongs in shared 'EU based companies who'll be asking for it to be moved inside EU rather than outside? You know as for example research projects funded by EU dry up or the UK partners are asked to greatly scale down or stop being a member of the project (already started as a side note).A Tyrant Named Miltiades! wrote: »About 50% of the UK's economy is already related to manufacturing. It's got one of the biggest manufacturing economies in the world. For example, it has a 20% market share in global aerospace industry.
Which are all likely to get hit with higher taxes (since UK is not going to accept freedom of movement they don't get freedom of trade); cars at 10% comes to mind for example. How long do you think said 10% would take to pay off compared to moving it to Romania or Slovakia? It's not like the big manufacturers don't already have significant factories there as it stands after all.the problem is not that UK can't manufacture, the problem is that it is currently focused on the export of sophisticated goods. It now needs to re-balance a bit, continuing to produce high quality, sophisticated goods in aerospace, bio-sciences and automobiles
As for London; well without passporting rights (that freedom of goods issue again) they have already started to plan where to move people away and the only thing pending now is the final deal. No passporting = enact plan A and move the relevant teams out. Or do you think the fall in rents in London city on office space was an accident?
So you want to lower the standard in UK to make it competitive again because there was a reason it let in the first place and to make it competitive again you'd need to compete with factory complexes in China, Indonesia etc. and the much smaller scale of the market somehow. That means either greatly reduced salaries or automation and a lot fewer people working there; neither is exactly a glowing recommendation for prosperity for the region now are they?but it needs to work on its unsophisticated goods for the domestic economy which it currently imports from the rest of the world, and upon which it is currently over-reliant.
To bad they will not get any; it's still going to be cheaper to do it somewhere else esp. once you add in scalability to the game.The North of England is a ripe opportunity for unsophisticated industry.0 -
You mean Airbus/EADS? How is that going to work out post Brexit.A Tyrant Named Miltiades! wrote: »About 50% of the UK's economy is already related to manufacturing. It's got one of the biggest manufacturing economies in the world. For example, it has a 20% market share in global aerospace industry.
They tried that in the sixties to save the clothing industry. Go to Bradford/Leeds and see the Pakistani community brought in to reduce wages so they would remain competitive in linen/clothing production. Didn't work out did it.A Tyrant Named Miltiades! wrote: »the problem is not that UK can't manufacture, the problem is that it is currently focused on the export of sophisticated goods. It now needs to re-balance a bit, continuing to produce high quality, sophisticated goods in aerospace, bio-sciences and automobiles, but it needs to work on its unsophisticated goods for the domestic economy which it currently imports from the rest of the world, and upon which it is currently over-reliant.
The North of England is a ripe opportunity for unsophisticated industry.
Can you give an example of where this has worked other than Juche in North Korea... because that's essentially what this "policy" is....0 -
A Tyrant Named Miltiades! wrote: »About 50% of the UK's economy is already related to manufacturing. It's got one of the biggest manufacturing economies in the world. For example, it has a 20% market share in global aerospace industry.
the problem is not that UK can't manufacture, the problem is that it is currently focused on the export of sophisticated goods. It now needs to re-balance a bit, continuing to produce high quality, sophisticated goods in aerospace, bio-sciences and automobiles, but it needs to work on its unsophisticated goods for the domestic economy which it currently imports from the rest of the world, and upon which it is currently over-reliant.
The North of England is a ripe opportunity for unsophisticated industry.
You couldn't be much more wrong about the problems facing the UK economy. Take a look at the law of comparative advantage and you'll understand why the UK absolutely does not need to focus on unsophisticated industries - quite the contrary. Even with Brexit it is absolutely not going to try and become self-sufficient. Now, that would be an unquestionably catastrophic economic policy!
When you say that 50% of the UK's economy is related to manufacturing what do you mean by that? A quick google suggests that it has the 11th biggest manufacturing industry in the world (compared to 5th/6th biggest economy). This in itself isn't a huge problem. Although it has an economy with one of the smallest manufacturing sectors in the world as a proportion of the economy so long as it can continue to produce services that other countries are willing to pay for and can retain access to those markets it will do fine - broadly speaking the decline in manufacturing as a % of the economy is a reflection of a growing level of services and is mirrored in the rest of the G7.
The financial services sector is threatened by Brexit though specifically in terms of what access they will have to the EU market. Nobody really knows yet what will happen but it's a reasonable guess that no major investments will be made in this area in the UK until the UK's relationship with the EU has stabilised and been determined for the foreseeable future.
There's no pressing need for Airbus to retain the manufacturing facility in the UK. They largely manufacture wings and it's already quite an impressive logistical feat to get the bigger ones down to Toulouse. Absent a specific agreement I can easily see Airbus moving the facility to another European location over time. However the aerospace industry in the UK is much bigger than Airbus and has quite a high level of expertise. It may take a hit but in the longer term it's an area that might have greater potential for growth post-brexit - I'm not very familiar with the area but I wonder if they'll be freer to sell military aircraft to a wider range of customers (there may be an ethical issue but that's a separate question).0 -
For sure, it doesn't make any sense for the EU to entertain a Turkish application and the EU should tell the UK to get lost (especially since they are on the way out).
But having said that I don't understand why people find their new position that cryptic.
If you assume that the UK diplomatic service doesn't think Turkey inside the EU is good for EU members, but thinks Turkey inside the EU is good for the EU's partners*, their change of behaviour is very consistent and doesn't imply a change of opinion - just a reassessment what their national interest is based on their upcoming changing status (they are now a member and will soon be a partner) .
* Which clearly would also be the view of the US as they have been pushing the EU to accelerate membership discussions with Turkey
The EU Membership is still a matter of principles of a democratic state and Turkey is on her way to abandon these principles. This morning in the News it was said that Erdogan is about to extent his emergency decree for another term and it´ll get through cos the approval by the his government is just a formality.
The USA should rather mind their own domestic businesses and how they can support a membership of Turkey in the EU given the present standards on which this country is currently run, one might wonder what is behind such interests if not solely based on geostrategic reasons. It´s very important now to bear in mind that the whole Turkish government and at the top of the State is led by a nationalistic-islamistic party and leader.
Frankly, I´ve come to the conclusion that it´ll be better for Europe in the long run to restrict the influx of Muslims to the continent and keep Islamists out of it.
I´m not a religious man and I don´t like to see Europe to become overtaken by Muslims somewhere in the future. Europe has a culture and heritage that is based on Christianity but also on the principles of enlightment and we don´t need to have backwards orientated People like those who run the Turkish state by the backing of a majority which stands behind this policy of a deluded nationalistic and islamistic leader like Erdogan clearly is.
I say it quite clear, Turkey has to be kept out of the EU until it moves back to the secular state which it was since the foundation of the Turkish Republic by Atatürk in 1923. Otherwise, no way cos you can´t integrate an Islamistic state into the EU, that´s absolutely impossible. I´m also against granting the Turks visa free travel to the EU in the current circumstances.
Just to add some further aspect to it, last year on the Turkish GE on 1st November, those Turkish citizens living in Germany (they are eligible to take part in the elections by casting their votes in the Turkish Consulates in Germany) voted by 60% for Erdogan and his AKP. That´s very telling given that not less of them are long residents in Germany, grown up here or even born here. That says a lot about them and their political as well as cultural stance.0 -
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In by and large a reiteration of what was always said so far, just that - again - it sends a clear message to the Brexiteers and their Vision of prospect they think they´ll have:
http://www.bbc.com/news/uk-politics-37502578It will be "impossible" for Brexit talks to result in a deal that gives Britons more rights than others outside the EU, Italy's PM has told the BBC.
Matteo Renzi warned that leaving the EU would be a "very difficult process" - but the problems could be solved only after the UK began the exit procedure.
He said the Brexit vote had been "a bad decision" but had to be respected.
Mr Renzi said he was ready to work with UK PM Theresa May to build the "best alliance" between the UK and the EU.
It´ll end in a compromise, but whether it will really become the "best alliance" between the UK and the EU, I do have my certain doubts. That depends on the angle from which one will look at it once it has been achieved."The people of the UK decided the way for the future," Mr Renzi said. "Now the situation is that we can - and we have to - build the best alliance between the UK and the EU for the future because we will be the best friends for the next years.
"And at the same time I think this decision could push European leaders to invest in a new way for Europe."
I hope it will, but unless Mr Juncker has resigned from his post, there´s nothing to come about any change at all, cos he´s the one blocking fundamental reformations on the very shape of the EU itself. So, he makes a new way for Europe impossible if it doesn´t means to transform more power to the EU from the member states. But this is the what Juncker is after.0 -
Liam Fox having the craic.0
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I'm always suspicious of exaggerated insults like, "you couldn't be much more wrong"; what I am saying has been said by plenty of economists and please stop exaggerating your disagreement and allow me to provide some detail.You couldn't be much more wrong about the problems facing the UK economy. Take a look at the law of comparative advantage and you'll understand why the UK absolutely does not need to focus on unsophisticated industries - quite the contrary.
Britain manufactures a lot of sophisticated goods which are relatively impenetrable to FX fluctuations. If the pound depreciates by 5%, Britain's auto or aerospace or pharma exports will barely budge; in other words, their price elasticity is low.
Britain doesn't manufacture unsophisticated goods, even where these are considered necessary goods (again, low elasticity). So when the currency suddenly depreciates by 5%, the laws of price elasticity of demand work against British households - they have less real income, but they still need to import the same goods in the same volumes.
This is a problem, given the inevitable, sustained depreciation of sterling; a depreciation that is probably welcome so long as the Brits can mitigate the problem of imports.
That's all I'm saying. To say that I "couldn't be more wrong" is just a silly exaggeration, and I suggest you stop being so facile.
Apologies that should have been 54% of UK exports are from manufacturing. It is the 11th-largest manufacturer globally, it does have a strong manufacturing industry, and it can be grown.When you say that 50% of the UK's economy is related to manufacturing what do you mean by that?
Yes, that's one side of the coin; there is a genuine concern about euro-denominated trading activity. There are two alternative views. Firstly, Brexit doesn't exactly make the E.U. a stable investment prospect, it throws up huge questions about the sustainability of Europe, and I'm not sure that a lot of banking houses won't stick with 'the devil you know'. Secondly, notwithstanding the passporting issue, you're ignoring the preference these firms have for laissez faire regulation, as against the more dirigiste approach of the EU, which the Brussels set, backed by the French, are particularly fond of.The financial services sector is threatened by Brexit though specifically in terms of what access they will have to the EU market.
Therefore:
Not only could many of these financial services firms opt to remain in London, there's a logical possibility that the City should attract quite a lot of hedge funds, relocating into the U.K. because of the new, liberal environment pretty unconstrained by EU regulations. I wouldn't write-off the City. Quite the opposite. The idea of City bankers running into the arms of Brussels bureaucrats and a smiling Papa Hollande, is just too difficult to believe.0 -
A Tyrant Named Miltiades! wrote: »Not only could many of these financial services firms opt to remain in London, there's a logical possibility that the City should attract quite a lot of hedge funds, relocating into the U.K. because of the new, liberal environment pretty unconstrained by EU regulations. I wouldn't write-off the City. Quite the opposite. The idea of City bankers running into the arms of Brussels bureaucrats and a smiling Papa Hollande, is just too difficult to believe.
So the UK will be so liberal and this would be so profitable as to render the entire EU marketplace (~500m people and their cash / capital) wholly irrelevant?
Given that a hard-brexit makes any and all trade in capital into/through the EU quite an expensive prospect from outside it and just as at-risk of ruled by that same EU red-tape as being within it.
The only way that that makes sense is if indeed the UK leaving the EU destroys the EU. And the 'new world order' that follows allows red-tape-free access to that Single Market.0 -
There's no pressing need for Airbus to retain the manufacturing facility in the UK. They largely manufacture wings and it's already quite an impressive logistical feat to get the bigger ones down to Toulouse. Absent a specific agreement I can easily see Airbus moving the facility to another European location over time. However the aerospace industry in the UK is much bigger than Airbus and has quite a high level of expertise. It may take a hit but in the longer term it's an area that might have greater potential for growth post-brexit - I'm not very familiar with the area but I wonder if they'll be freer to sell military aircraft to a wider range of customers (there may be an ethical issue but that's a separate question).
I don't think that Airbus are going to fare particularly well (nor do I think they'll fold ... just more likely to contract than expand) and relying on aerospace in general is going to be a hit or miss affair considering how quick the big players are to routinely lay off thousands at a go. Doubly so when we see the news about airlines cancelling additional orders of flagship products like the A380. But that's ignoring all of the non-passenger-airline work that Airbus are involved in.
I know two guys working for Airbus - two completely different spheres of operation. One of them reckons his very well paid job (and entire operation which is nothing to do with airplanes) will decamp to the continent. Moreover, given the amount of cross-border work going on in Airbus, I don't see how keeping the status quo will fare well given that costs will inevitably go up - either from tariffs or an increase in red-tape. That means either jobs get moved, or cutbacks and ... jobs get lost.0 -
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You know who has even more laissez faire approach? Bahamas, Panama and every other third world tax heaven and from an EU perspective there will be no difference between them in terms of accessing the EU market. I also got a feeling Luxemburg would likely see a huge swing up in new legal entities for the same reason as that gives you the "in EU" country you need.A Tyrant Named Miltiades! wrote: »Yes, that's one side of the coin; there is a genuine concern about euro-denominated trading activity. There are two alternative views. Firstly, Brexit doesn't exactly make the E.U. a stable investment prospect, it throws up huge questions about the sustainability of Europe, and I'm not sure that a lot of banking houses won't stick with 'the devil you know'. Secondly, notwithstanding the passporting issue, you're ignoring the preference these firms have for laissez faire regulation, as against the more dirigiste approach of the EU, which the Brussels set, backed by the French, are particularly fond of.
Therefore:
Not only could many of these financial services firms opt to remain in London, there's a logical possibility that the City should attract quite a lot of hedge funds, relocating into the U.K. because of the new, liberal environment pretty unconstrained by EU regulations. I wouldn't write-off the City. Quite the opposite. The idea of City bankers running into the arms of Brussels bureaucrats and a smiling Papa Hollande, is just too difficult to believe.0 -
A Tyrant Named Miltiades! wrote: »I'm always suspicious of exaggerated insults like, "you couldn't be much more wrong"; what I am saying has been said by plenty of economists and please stop exaggerating your disagreement and allow me to provide some detail.
Britain manufactures a lot of sophisticated goods which are relatively impenetrable to FX fluctuations. If the pound depreciates by 5%, Britain's auto or aerospace or pharma exports will barely budge; in other words, their price elasticity is low.
Britain doesn't manufacture unsophisticated goods, even where these are considered necessary goods (again, low elasticity). So when the currency suddenly depreciates by 5%, the laws of price elasticity of demand work against British households - they have less real income, but they still need to import the same goods in the same volumes.
...
That's all I'm saying. To say that I "couldn't be more wrong" is just a silly exaggeration, and I suggest you stop being so facile.
I used the term quite carefully actually, I didn't exaggerate, if anything I understated the case. You really could not be much more wrong with your prescription for the British economy. If you can find even one, just one, semi-respected economist who would think that any part of Britain should start manufacturing 'unsophisticated' goods then I'll show you a crackpot and frankly I don't believe that you'll find one notwithstanding the number of crackpots out there. N.B. I said economist not politician.
This is basic economics. Again I suggest that you look up the law of comparative advantage - I'm kind of surprised that you can reference price elasticity of demand but just ignore the law of comparative advantage. Price elasticity is only really relevant at the margins where it's just starting to make sense to offshore a service or the manufacturing of a good. If it was relevant to all necessities (defined pretty much however you like because your use of term is a whole other area that could be discussed) then we'd really be up the proverbial creek without a paddle.A Tyrant Named Miltiades! wrote: »This is a problem, given the inevitable, sustained depreciation of sterling; a depreciation that is probably welcome so long as the Brits can mitigate the problem of imports.
The "inevitable, sustained depreciation of sterling" is anything but inevitable unless of course Britain were to follow your prescription when it would I concede have a fairly catastrophic impact on the economy. Fortunately, for all of her faults Theresa May has no ambition that I'm aware of to emulate North Korea. All other things being equal if the UK makes a success of Brexit then sterling will appreciate.A Tyrant Named Miltiades! wrote: »Apologies that should have been 54% of UK exports are from manufacturing. It is the 11th-largest manufacturer globally, it does have a strong manufacturing industry, and it can be grown.
Of course it can be grown and it will continue to grow with ups and downs as it has done for decades. What also isn't likely to change is that it's % of the economy will be reduced as services continues to grow at a quicker rate. You also won't see it grow in the area of low added value goods. It will be in the more 'sophisticated' goods arena where the UK will grow as it leverages its comparative and in some cases absolute advantages.A Tyrant Named Miltiades! wrote: »Yes, that's one side of the coin; there is a genuine concern about euro-denominated trading activity. There are two alternative views. Firstly, Brexit doesn't exactly make the E.U. a stable investment prospect, it throws up huge questions about the sustainability of Europe, and I'm not sure that a lot of banking houses won't stick with 'the devil you know'. Secondly, notwithstanding the passporting issue, you're ignoring the preference these firms have for laissez faire regulation, as against the more dirigiste approach of the EU, which the Brussels set, backed by the French, are particularly fond of.
Therefore:
Not only could many of these financial services firms opt to remain in London, there's a logical possibility that the City should attract quite a lot of hedge funds, relocating into the U.K. because of the new, liberal environment pretty unconstrained by EU regulations. I wouldn't write-off the City. Quite the opposite. The idea of City bankers running into the arms of Brussels bureaucrats and a smiling Papa Hollande, is just too difficult to believe.
There may well arise some opportunities in the financial services sector - in fact it's very likely. However, does anyone seriously think that these will match the benefits provided by the current membership of the EU? This will be a critical area for the UK government to negotiate. In the meantime as I said I'd be surprised to see any major investment take place in the UK. As an aside, it's an area in which Ireland might well benefit if the UK is unable to negotiate a favourable deal (although I'd much sooner take the UK staying in the single market).0 -
If anyone missed the speech, good synopsis here.Deleted User wrote: »Liam Fox having the craic.
http://www.telegraph.co.uk/news/2016/09/29/liam-fox-signals-britain-will-leave-the-single-market-in-hard-br/0 -
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A Tyrant Named Miltiades! wrote: »Not only could many of these financial services firms opt to remain in London, there's a logical possibility that the City should attract quite a lot of hedge funds, relocating into the U.K. because of the new, liberal environment pretty unconstrained by EU regulations.
The whole bloody point of being in London is that you are able to sell to the target customers! It does not matter how flexible the UK framework is, if you can't actually reach the target customers it makes no difference. Once the UK becomes a third country it looses not only passporting facilities, but also infrastructure such as recognition UK legal and accounting qualifications so that they can represent their clients in the EU etc...
Most of the Swiss banks I know are working on the strategy of moving sales to Frankfurt and back office to Dublin, Limerick or Cork.
Even more basic things such as data protection becomes an issue because after the exit, the UK no longer has automatic qualification for data transfer and sharing. This will also have to be negotiated.0
This discussion has been closed.
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