If we vote for Brexit what happens

wotsthat

Rinoa wrote: »

Hard Brexit confirmed.

http://www.cityam.com/251410/donald-tusk-tells-uk-its-hard-brexit-no-brexit

..and the sweet deal?

Not that anything has been confirmed of course - Tusk (and Junker) are glorified civil servants.

vivatifosi

There are a couple of interesting articles on the EU on Tim Marshall's website. I like Marshall. He gets geopolitics in a way that few commentators do.

On why Europe should have at least seen the possibility of Brexit happening:
http://www.thewhatandthewhy.com/eu-things-fall-apart/

On why changes in Europe will make it harder to play hardball with the UK:
http://www.thewhatandthewhy.com/the-eu-and-the-free-movement-of-ideas/

Conrad

Anyone know why Unilever tried also to rise prices in Ireland this week?


According to the previous head of Kingfisher group (bit retail concern), Unilever never reduced prices when the pound was much stronger. He also mentioned Premier Foods trying to rise prices in this way a while back and it's products were removed from Tesco and never returned (Hovis I think was a Premier Foods line).


Oil fell like a stone when the pound was still high (and I say 'high' advisedly), but no one reduced the cost of products requiring oil for the plastic packaging - funny that.

Rinoa

vivatifosi wrote: »

On why changes in Europe will make it harder to play hardball with the UK:
http://www.thewhatandthewhy.com/the-eu-and-the-free-movement-of-ideas/

That would be very acceptable to most Leavers.

Before the referendum the BBC did a program from Burnley (typical of areas who voted Brexit) seeking peoples views on immigration. There was no animosity to immigrants, what they were against were welfare benefits being immediately available without contributing into the system.

wotsthat

Conrad wrote: »

Oil fell like a stone when the pound was still high (and I say 'high' advisedly), but no one reduced the cost of products requiring oil for the plastic packaging - funny that.

Unlike mortgage brokers (registered charities apparently) manufacturers and retailers are trying to maximise total profit. Every link in the supply chain is trying to get as much of the £2.27 retail price of a jar of marmite as possible.

This is MSE - I thought we all knew this.

What's the betting Unilever have enjoyed their best weekly sales of Marmite this year?

Conrad

Back to the deal.


Has anyone heard Tusk or other senior Eurocrats say they want tariffs imposed on their goods, which they sell much more successfully to us than we do to them?

Conrad

We want nothing from the EU except a trade agreement. This is why we are in a strong position, we need nothing else.


The absolute 'worst' outcome is preferred nation WTO terms which personally I'd be happy with as then we're out and can crack on with making deals globally.


We import double that we sell to the EU and so we collect broadly double the tariffs which we can then use to reduce income taxes here or boost business.


Much of the tariff wont be passed onto consumers anyway but will be absorbed across long chains, such as vineyard to off license.


With an average 4% tariff our exports are still some 13% more competitive thanks to the pound falling to near fair value. A 4% ave tariff is far less of an impact compared with say the last 10 years currency fluctuations - £ /Euro... £ / Dollar etc


As to barriers to trade - just another fairy story concocted by those desperate to over complicate things.


The world meets EU standards where it sells into the EU, and we are already fully compliant.


Services barely use passporting anyway, and Mifid 2 provisions take care of our service needs, though I expect some Bank staff to relocate into the EU, perhaps Dublin, but a drop in the ocean (something like a couple of days worth of annual job churn) - and many more jobs will be created in London, the global financial centre, and now turning to a global trade centre of course

Ballard

Have you ever visited planet earth, Conrad?

wotsthat

Conrad wrote: »

Much of the tariff wont be passed onto consumers anyway but will be absorbed across long chains, such as vineyard to off license.

I've not ignored the rest of your post but know what you think about bold certain claims.

There is no money tree. Someone pays and, eventually, it's always the consumer. There's no magic about Brexit which changes this - what you're saying is that Brexit will lead to a fundamental shift in supply chains where the participants change their business models to work on lower margins.

To determine whether that's realistic let's visit our best friend Tesco to look at Marmite. It was £2.27 yesterday but today it's £2.35. Never mind other retailers are more friendly and won't put up prices - well it's £2.35 in Morrisons, Wairose and Aldi too. Asda have a temporary price down to £2. Sainsburys £2.50.

Remember this is a product made in the UK from UK sourced ingredients?

What I think has happened (Marmite fans might be able to confirm) is that Tesco have been buncing (putting up prices without a supplier increase) and Unilever wanted a share of the action.

Retailers have been quietly building margin in branded products so they can later pretend they've absorbed most of the costs of the currency changes. Aided and abetted by the fall in commodity food prices so average inflation stays low.

There's a guardian article saying what a great job Tesco have done for consumers. Without realising the irony they used a photo of marmite on a supermarket shelf at £1.90!

I'll keep an eye on unfolding events for you.

cells

Conrad wrote: »

Oil fell like a stone when the pound was still high (and I say 'high' advisedly), but no one reduced the cost of products requiring oil for the plastic packaging - funny that.

Prices tend to go up with general inflation, if a base commodity goes down in price it does not necessarily mean prices will go down it might mean price increases wont happen

Also packaging is very cheap. If you imagine a sandwich for £2.50 retail its probably got 1% wholesale in packaging costs. The actual oil in the packaging is probably a quarter of that so less than a penny. If oil doubles it will add a penny to the cost of the sandwich if oil halves it will reduce the end price by 0.5p these are not sums a retailer will play with to change on a monthly basis.

whats more likely is the energy companies are going to put their prices up especially natural gas as about half the cost you pay as a retail customer is the bulk gas prices. So if the pound falls 20% while gas stays the same in dollar/euro terms then you are looking at a 10% increase in your final retail gas prices. Probably about the same 10% increase for electricity too. So expect to pay some £100 a year more for utilities due to the fall in the pound.

Likewise expect your petrol and diesel to go up and air plane tickets to go up. The other things will be less noticeable plus retailers can just package things smaller rather than increase prices. So make the package contents 2% less is going to make more sense for them than increase the price from £1 to £1.02