The Economic outlook for Scotland

Shakethedisease

CLAPTON wrote: »

you must be pretty desperate to quote this load of rubbish


just love the bit where the Europeans are knocking Scottish Independence to ingratiate themselves with the English.


About as accurate as the wings over Scotland and
about as loving as Flower of Scotland

Never mind.. there's always this to look forward to tomorrow...

Joe Weisenthal
Sep. 7, 2014, 3:45 PM

The weekend is over, and the pound is tanking.
The above chart (via @thalesians) shows the British currency starting the week with a swan dive, following the shocking news over the weekend that the Scottish Independence movement is now leading in the polls....

About that currency union ? <---- just kidding.. and no, am not desperate. Though I think Osborne might be getting a little 'concerned'. More powers anyone ?

Kohoutek

Shakethedisease wrote: »

there are a fair few about who have fallen for the 'reprisals for dumping us' rhetoric too.. despite any sort of common sense logic.

Which of these positions seems more logical to you:

Salmond: The UK should enter into a currency union with an independent Scotland, thereby acting as the backstop for Scotland's large financial sector, government debt and budget deficit.

UK: Would rather not use taxpayers' money to support a foreign country.

Shakethedisease wrote: »

But the basic points remain. The UK isn't any beacon of fiscal utopia or in wonderful shape financially either.

It's in better shape than France, Italy, Spain and others.

Shakethedisease wrote: »

Yet think they can wag a lot of fingers about 'warning' Scots about 'dangers'.

Well, breaking away from a country where you send two thirds of your exports and share a currency is pretty stupid idea by anyone's standards.

Shakethedisease

Kohoutek wrote: »

Which of these positions seems more logical to you:

Salmond: The UK should enter into a currency union with an independent Scotland, thereby acting as the backstop for Scotland's large financial sector, government debt and budget deficit.

UK: Would rather not use taxpayers' money to support a foreign country.

It's in better shape than France, Italy, Spain and others.

Well, breaking away from a country where you send two thirds of your exports and share a currency is pretty stupid idea by anyone's standards.

Basically you're saying that independence is a stupid idea then ? Fair do's.. For me economically risky, short term.. politically risky, in terms of the differences in how both countries vote these days ? Not much.

There's much more to this that the pound. And the Yes campaign is mandating negotiating at the start for a currency union. Not forcing rUk into anything it doesn't want. Seems fair enough to me.

What is it about negotiations you have a problem with ?

mystic_trev

Home rule? Scotland’s voters are betting the house on independence but they're unaware of the foreign exchange risks to their mortgages

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11080611/Scottish-homeowners-face-mortgage-meltdown-if-Yes-campaign-wins.html

I bet it's not the only thing they're unaware of!

HAMISH_MCTAVISH

Yep.

That risk was flagged here days ago, and now the media has picked up on it.

Based on the assumption that a new Scottish currency, if allowed to float freely on international money markets, would depreciate by around 10pc immediately against the pound, that could see the proportion of mortgage payments as a percentage of income in Scotland jump dramatically.

For example, a Scottish homeowner with a £1,000 monthly mortgage payment could suddenly have to find an additional £100 overnight just to cover the short-term cost of buying sterling.

“It is probably a position that most Scottish homeowners would never have expected to be in,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“In the early days, at least, a new Scottish currency would certainly be weaker than sterling and longer-term interest rates in Scotland would have to be higher than in the UK.”

There is also the added uncertainty of whether banks would want to continue lending in the Scottish market until a new independent government, if a Yes vote succeeds, negotiates its share of the UK’s public debt and decides on how financial services should be regulated north of the border.

At present, mortgage lending in the UK is regulated by the Financial Conduct Authority, but how such services would be overseen in an independent Scotland is an unknown.

“For new homebuyers, you may find that some lenders just won’t offer mortgages in Scotland any more. There is a high chance that smaller lenders would review their position in an independent Scotland,” said Hollingworth.

Many banks have already indicated that a Yes vote would prompt them to re-evaluate their businesses in Scotland and first-time buyers could find themselves in a situation where it is virtually impossible initially to obtain a mortgage denominated in a new Scottish currency.

CLAPTON

Shakethedisease wrote: »

Never mind.. there's always this to look forward to tomorrow...



About that currency union ? <---- just kidding.. and no, am not desperate. Though I think Osborne might be getting a little 'concerned'. More powers anyone ?

why are you so pleased that your currency has reduced in value compared to other currencies


is it
-because a lower pound helps Scottish exports and so a good thing for scotland
-because you think Scotland will be worse off but your hatred of the English makes it worth while to celebrate the reduction

Generali

According to Yahoo, the Pound is down 0.07% on the day. Not exactly a death march but it is a taste of what will likely happen if Scotland votes Yes.

Shakethedisease

CLAPTON wrote: »

why are you so pleased that your currency has reduced in value compared to other currencies


is it
-because a lower pound helps Scottish exports and so a good thing for scotland
-because you think Scotland will be worse off but your hatred of the English makes it worth while to celebrate the reduction

I'm not pleased. But feel a bit vindicated that despite having no economics knowledge I pointed out this would happen when the polls headed towards 50% for Yes. All the economic's guru's here told me I was talking *********s.

setmefree2

Generali wrote: »

According to Yahoo, the Pound is down 0.07% on the day. Not exactly a death march but it is a taste of what will likely happen if Scotland votes Yes.

Banks posted some of the biggest losses in London on Monday, with shares of Royal Bank of Scotland Group PLC RBS, -2.45% RBS, -2.23% down 2.7%, Lloyds Banking Group PLC LLOY, -2.76% LYG, -0.41% off 2.6% and Barclays PLC BARC, -1.10% BCS, -1.38% 1% lower.

setmefree2

New PMI data has revealed that while business activity in Scotland's private sector economy rose solidly in August, it increased by the slowest rate of growth since May, ahead of Scots voting for whether the country should stay part of the UK.
The Bank of Scotland PMI report showed that the seasonally adjusted headline– a single-figure measure of the month-on-month change in combined manufacturing and services output – was at 54.6 for August, down from July's six-month high of 56.8.
Furthermore, output growth increased by slowest rate in 16 months. Manufacturers recorded a further marked increase in overall new orders, although it did see a fall in export sales.
Related

"August saw a broad based rise in business activity across both the services and manufacturing sectors. Employment rose at the fastest rate for six months confirming continuing high levels of business confidence," said Donald MacRae, Chief Economist at Bank of Scotland.

http://www.ibtimes.co.uk/scottish-independence-new-business-slows-ahead-referendum-1464462