Today's Vote

I was proud to vote Brexit. Difficult decision and no side of the fence offered clarity or perfection, but we hold the better cards, Europe (of which most countries are in the EU) is a sick man and what do we fear? Australia? Canada? New Zealand? Switzerland?

We'll get a good deal, because it's what most of Europe want too - in years to come we'll look back at the EU and wonder what it was all about - free trade great. A political union to which we cede control over swathes of domestic policy? Utter madness.

Lyndon says:

incredibly cheap

Yen pre Brexit 149
Yen today 139

=7%

I must give you a 7% discount off my inflated house price and you'll think it has become so "incredibly" cheap
My tip is Don't go into business with Lyndon.

Lyndon says:

incredibly cheap

Yen pre Brexit 149
Yen today 139

=7%

I must give you a 7% discount off my inflated house price and you'll think it has become so "incredibly" cheap
My tip is Don't go into business with Lyndon.

Yeah, you save £1.7 billion quid here, £1.7 billion there, pretty soon you're talking about serious money.

Spoken with all the logic and good old British common sense we've come to expect from Brexiters. Well done old chap.

Yeah, you save £1.7 billion quid here,

Didn't you say it was a Japanese take-over, in your rambling "Japanese are making off with the Crown Jewels" xenophobic rant?
So would they have not have raised the capital in terms of the Yen.
Again, very "The Sun" of you to translate the figure into good ole sterling

And you say the Brexiters have no common sense, I think maybe you are the bitter one, dear old boy.


PS. This is how global business and finance works, you take-over, grow, then maybe get taken over yourself. Unless you want isolationism???

Between 1999 and 2015, ARM also went on to acquire 21 companies as it constantly grew its global footprint.

Yeah, you save £1.7 billion quid here,

Didn't you say it was a Japanese take-over, in your rambling "Japanese are making off with the Crown Jewels" xenophobic rant?
So would they have not have raised the capital in terms of the Yen.
Again, very "The Sun" of you to translate the figure into good ole sterling

And you say the Brexiters have no common sense, I think maybe you are the bitter one, dear old boy.


PS. This is how global business and finance works, you take-over, grow, then maybe get taken over yourself. Unless you want isolationism???

Between 1999 and 2015, ARM also went on to acquire 21 companies as it constantly grew its global footprint.

A thought experiment: would Japan allow a British company to take over their leading (only?) world-beating electronics firm?

I'll give you a clue, the answer is "no".

Point of information: we were more like 159 Yen to the Pound in the immediate run-up to the poll when the markets convinced themselves we'd vote to stay in - its now 130 Yen. Thats more like a 12% fall.

Anyway, I think some Brexiteers are being purposefully msileading about what it is economists said would happen post-Brexit. We did not say the sky would cave in. We did not say all deals would stop. We said simply that an increase in uncertainty and the likelihood of decreased access to European markets (both of which remain) was likely to lead to weaker economic activity than would otherwise be the case. The consensus 'baseline' scenario was for growth to be about 1 percentage point a year weaker over the 2-4 years than otherwise would be the case, with the possibility of a technical recession if negotiations started to look very difficult and/or markets panicked about, for instance, the current account deficit, or bank financing. All of these options are still possible - and a slowdown seems probable, especially given indications that business investment and the property market is being affected. We're also likely to see more firms becoming distressed (the collapse of low cost holidays was probably brought forward if not caused by the weakness of the pound, making it harder to pay their bills in euros, dollars, etc).

Economists also said that we'd likely be poorer in the long-run than we otherwise would - although the uncertainty around how big those losses would be was rather substantial due to uncertainty about future trading relationships, and uncertainty about just how strong the links between EU membership and trade and FDI and between trade, FDI and growth are. I'm not exagerating it when I say credible studies showed costs of anyway between 1 and 8% of GDP.

To argue we'd be better off in the long-run would require you to believe the following:
- That outside the EU we would be able to negotiate substantially better "trade" deals with other countries than the EU will, in order to offset the inevitable increase in costs and reduction in trade volumes with Europe (this is not based on assuming tariffs - its about being outside the customs union and therefore requiring customs checks; its about the potential for less-than-complete access for services sectors that currently enjoy full access).
-That the EU was about to embark on a significant degree of damaging regulation that we can avoid if we leave the EU.

Now neither of these are impossible, but I think both are dubious propositions.

Might we get more trade deals? Yes. But a trade deal with Australia (which Brexiteers are all excited about) or Mexico is a rounding error in the context of our trade with the rest of the EU and always will be given the importance of proximity for trade. And trade deals with the likes of China and India are notoriously one-sided (look at Switzerland's!), which would pose political difficulties as much as anything. The US is the big prize and we have a particularly hard hand to play there given we will want financial services included and the US doesn't, and the US will want healthcare and there will be stronger pressure for us not to include that now. Each of these would have just been part - albeit noisy parts - of a much bigger deal as part of TTIP but now take centre stage. In my view the likelihood is a much pared down deal which generates fewer benefits to both sides (and incidentally, TTIP is quite a lot less likely to happen without the UK pushing for it).

On regulation - well, there are (or at least were) moves at the European Commission to reduce the role of the EU in labour markets, the area which probably has the biggest impact on business costs and flexibilities (albeit also providing some stability to those in work). The whole push has been less regulation as part of aims at 'structural reform' to boost southern European economies.

And if we don't get more and better trade deals; and we don't avoid a raft of damaging legislation, economically-speaking, we're left with reduced access to European markets. Which will have a cost - albeit an uncertain one.

Now maybe people have decided they are happy to be 1-7% poorer for "freedom". But I don't think thats what people decided. I think people believed Brexiteers when they said, in the long run at least, life will be rosier outside the EU than in it (even if they thought there would be a cost over the next 5 years). I think they bought the idea that we hold the upper hand in bargaining so can extract a great deal from Europe (I think that misreads the political incentives and relative bargaining power). They bought the idea that the EU was a regulation-pushing protectionist block that we had no hope of influencing from the inside and can escape from on the outside. And they bought the idea that we'll get better trade deals. On those counts I think they'll be wrong.

The big problem is because of the straw man the Brexiteers have created - this idea that Remainers and their economist 'stooges' said the world would end if we left the EU - the public will probably decide that it was the economists that were wrong and the Brexiteers were right. Because we will get trade deals (just not good ones). There will be one or two examples of EU regulation we avoid (even if the direction is less regulation and/or we could have influenced it). And the economic world will go on spinning, even if its a little slower.

RC - I take your point about what economists said. The media has a part to play in this - sensationalism is in their interests. We also had the spectacle of a former Prime minister (who shan't be named!) telling us that the pound and the stock market was collapsing! Talk about a lack of historical perspective. I prefer Adam Smith's 'there's a lot of ruin in a nation'. I voted Remain but I think a lot of people are sick and tired of hearing apocalyptic warnings from elites (more political/commercial/financial than serious economists) in order to get them to vote the 'right' way.

We have the world before us now. Behind us a political project that tied us to a series of stagnant economies and imposed a one-size fits all economic policy.

It is absurd to assume that 28 nations can adopt a single economic model. It doesn't work, and it won't work and in time, we will not only be better off out - we will look on in amazement that we thought the EU model a good idea.

The UN is a good example of intergovernmentalism. The EU is a bad example of supranationalism.

There is a world of opportunities now. Accept where we are, and help shape it.

We have the world before us now. Behind us a political project that tied us to a series of stagnant economies and imposed a one-size fits all economic policy.

It is absurd to assume that 28 nations can adopt a single economic model. It doesn't work, and it won't work and in time, we will not only be better off out - we will look on in amazement that we thought the EU model a good idea.

The UN is a good example of intergovernmentalism. The EU is a bad example of supranationalism.

There is a world of opportunities now. Accept where we are, and help shape it.

Please explain this "one-size fits all economy policy". Because as far as I can see we have separate fiscal and monetary policy; substantially different product and labour market regulation; different benefits and welfare-to-work programmes; different industrial policies; different education policies; different science policies. In fact, I think bar the areas of product standards (different to market regulation), trade policy, and certain areas of competition and labour market policy - those countries outside the Eurozone have scope for markedly different "economic policies" from the rest of Europe, and even those inside the Eurozone have the scope for quite different policy in many areas (its monetary policy they formally forgo, and accept constraints on overall fiscal stance). Ireland has low tax. Denmark has high tax. France has a highly regulated labour market. The UK the third least regulated labour market among advanced economies. France cut its deficit by putting up taxes, the UK largely by cutting spending.

A lot of rubbish is being spouted about the EU - the idea that it imposes "one-size fits all" policies on broad areas of public policy being one of them.

The idea that we were "tied to stagnant economies" is another fallacy. Germany and Austria did/do very very well trading with China and other emerging markets, despite being even more "tied in" as part of the Eurozone. Our failure to trade so much with such economies is our hollowed-out industrial base, and them not yet being at the stage where they demand quite so much of our service sector as we would like (and services are often subject to even more hidden protectionism!).

As I said if you take the view that the EU was going to start interfering in negative ways in our economy or society; or that we will be able to do a much better trade deal with the US, Canada, Brazil, China, India etc outside the EU.. then you can paint a realistic scenario for us being better off.

But arguments based on the EU bullying bogeyman, or the ease with which we will do all these wonderful deals giving us migration control, freer trade, etc... forgive me if I either call them out, or give words of caution.

And finally the idea that we should all "accept where we are and help shape it". Well, could one not have made that argument for all those years to Farage and co? And is not one way to shape it to argue for realism in terms of what to expect in a deal to avoid it dragging on longer than necessary?

Point of information: we were more like 159 Yen to the Pound in the immediate run-up to the poll when the markets convinced themselves we'd vote to stay in - its now 130 Yen. Thats more like a 12% fall.

Not too sure where you get 159? Please telling your not including the "asymptotic money making speculation spike" on the evening of the vote?

If so you are, you are even a more stupid economist than I first thought.

As for your value today of 130 Yen, It closed yesterday 139, today its 140.5

Are you looking at the tourists rates mate? there is a difference.!!

I know the old joke is why do economists use a decimel point?
Answer to show they have a sense of humour, but your maths is suspect
I would recalculate it as a 6% discount today, not a 12%

http://www.xe.com/currencycharts/?from=GBP&to=JPY&view=1Y