If we vote for Brexit what happens

gadgetmind

The problem is that the BoE is running out of bullets. Rates can't go much lower and I doubt what they can do will make any difference. Similarly buying more tranches of gilts can't force yields much lower and the extra money supply won't really fix the major confidence issues that the threat of Brexit has caused.

mayonnaise

On a positive note, PMI indices in the Eurozone remain strong.

The U.K.’s decision to leave the European Union hasn’t slowed economic growth in the neighboring eurozone, according to a revised measure of activity for July based on surveys of purchasing managers.

The composite PMI is in line with other early indications of Brexit’s impact on the eurozone economy. A survey released by the European Commission last week showed eurozone business confidence picked up in July.

Similar surveys released Monday and Wednesday pointed to a sharp decline in U.K. activity following the vote

http://www.wsj.com/articles/eurozone-economy-stays-on-track-despite-brexit-1470214775

Back to 'the sick man of Europe'.

cells

gadgetmind wrote: »

The problem is that the BoE is running out of bullets. Rates can't go much lower and I doubt what they can do will make any difference. Similarly buying more tranches of gilts can't force yields much lower and the extra money supply won't really fix the major confidence issues that the threat of Brexit has caused.

looks like the new government is leaning towards spending more on the government credit card.

My guess is that the government will avoid a recession this time around by expanding its borrow/spend. If I recall correctly the budget deficit was going to be about 3.75% this year and it has been as high as 10% in the recent past so that's a lot of headroom to borrow if the government wants to do so. The arguments will be expanding the public debt for a few years to tide over the UK for a few years while it readjusts from leaving the EU and making trade deals with other nations

TrickyTree83

As someone who works with statistics I'm genuinely concerned that the prophets of doom on here consider 6 weeks +/- adequate to produce an indication of trend. Give it 6 months. All the posts about economic doom in the UK and perfection in the EU are not worth the time and effort you put into them at this stage in the process.

TrickyTree83

fafafafafafasadsong wrote: »

I agree but one month PMIs are all we have.

All are down except construction which is probably flat from a statistical POV. It doesn't seem like an unreasonable way to respond to someone that thinks that everyone thinks all is well because the world isn't in a recession that couldn't happen until December and wouldn't be predicted at first call until February 2017 (IIRC when Q4 2016 GDP data will be released).

Either nobody discusses the economic impact of Brexit with data or we all do. If Conrad can claim that all is well because an impossible recession hasn't happened it seems reasonable for me to reply that actually the early, tentative signs are that the British economy, made up as it is of consumption, construction, manufacturing and services, mightn't be okay. Actually it might be far from okay from early, tentative signs.

I do not want the British economy to be wrecked but it seems fair that in a discussion of how Brexit is faring to point out that it might not be travelling very well.

After there's a sufficient number of data points over a suitably long period of time you'll be able to make those claims.

If we see-saw from now until article 50 then all of this discussion amounts to nothing.

At the moment we couldn't even look at moving average convergence divergence over a sufficiently long enough time frame to indicate short vs long term trend. So there's no way of knowing if it's a bump in the road or an indication of something more sinister.

mwpt

TrickyTree83 wrote: »

As someone who works with statistics I'm genuinely concerned that the prophets of doom on here consider 6 weeks +/- adequate to produce an indication of trend. Give it 6 months. All the posts about economic doom in the UK and perfection in the EU are not worth the time and effort you put into them at this stage in the process.

Most of us don't. But as you're aware, this thread is filled with questions from the leave voters asking where the recession is, where WW3 is, and so on. They also post articles showing how business X is buying a building here, or business Y has increased workforce there. So, what's good for the goose is good for the gander.

I personally don't know how things will turn out. I still think we did the wrong thing anyway.

TrickyTree83

mwpt wrote: »

Most of us don't. But as you're aware, this thread is filled with questions from the leave voters asking where the recession is, where WW3 is, and so on. They also post articles showing how business X is buying a building here, or business Y has increased workforce there. So, what's good for the goose is good for the gander.

I personally don't know how things will turn out. I still think we did the wrong thing anyway.

In that case it's a rod for their own backs, I wouldn't subscribe to that train of thought. WW3 could take place but not between the European nation states as before, that really was a ludicrous claim. And asking where the recession is, or trying to prove it's coming at the moment is like pushing water uphill. The very definition of an economic recession as per the BoE requires we wait for the results from 2 consecutive quarters.

gadgetmind

TrickyTree83 wrote: »

After there's a sufficient number of data points over a suitably long period of time you'll be able to make those claims.

Which claims do you feel aren't supported by existing data? They all looked reasonable to me.

However, I do agree that it will take time to see quite how bad things are, I also don't think your average Leave voter will tend to pay much attention to PMI or GDP data and won't really pay attention until we start to see it all feeding into the employment figures.

gadgetmind

TrickyTree83 wrote: »

And asking where the recession is, or trying to prove it's coming at the moment is like pushing water uphill. The very definition of an economic recession as per the BoE requires we wait for the results from 2 consecutive quarters.

Agreed, but while thunderstorms have a strict definition, and you can't be sure one is actually happening until you start getting very wet, it's worth watching out for dark clouds and paying attention to the forecasts the experts are making.

Oops, sorry, I was forgetting that some people don't like experts.

gadgetmind

"If you're a Leave voter, you're about to get exactly what you asked for"

http://uk.businessinsider.com/statistics-brexit-recession-uk-2016-7

For the record, I think some of the projections there are on thin ground.