The EU: IN or OUT?

cloud_dog

Yes, I accept the the use of the term 'tangible' was incorrect

At a time when, certainly industrialised countries are working hard to create / maintain growth, a respected body (is it ok to say this) have indicated that we will also have to worry about dealing with an additional £25b of lower income (possibly debt / additional reduction in services).

Hope that is woolly enough for everyone's liking

JohnRo

bowlhead99 wrote: »

And we haven't had a brexit yet. So anyone saying there have seen tangible results post brexit, whether talking about 2016 (pre brexit) or 2020 (no results available) is jumping the gun. All we have to go off is projections and predictions

Theresa and Sir James heading to India, one cap in hand the other beating the drum for more immigration, that's tangible enough.

Not quite what the vast majority of the patriotic leave camp intended but it provides an insight into the likely future.

bowlhead99

cloud_dog wrote: »

Yes, I accept the the use of the term 'tangible' was incorrect

At a time when, certainly industrialised countries are working hard to create / maintain growth, a respected body (is it ok to say this) have indicated that we will also have to worry about dealing with an additional £25b of lower income (possibly debt / additional reduction in services).

Hope that is woolly enough for everyone's liking

No, how dare you- it is clearly scaremongering .

If you recall, ahead of the election, Osborne suggested that the lower GDP projected by a variety of different groups would lower tax revenues by (e.g.) £30bn, so the shortfall would have to come from somewhere, e.g. raise more tax and cut some spending.

The leave camp said that was just "Project Fear" (tm) and it was outrageous to have said it, and then post- vote were then critical that there wasn't an instant emergency budget to fill the void and that GDP didn't fall just yet, so it proved it was all "Remainers' Lies" (tm). So, please get out of here with your less-than-rosy projections, before you get beaten up

Of the brexit scenarios examined by the major economic forecasters ahead of the vote, there were a whole variety of methodologies and numbers which highlight the challenges of trying to make forecasts of growth multiple years ahead on an unknown post-EU settlement. The short term estimates have already been "proved wrong" by the economy growing rather than contracting in Q3 this year, and talk of recession next year has receded - but BoE in common with virtually all forecasters expects the pace of UK growth to slow sharply next year (and beyond 2017).

Taking the average of the most optimistic "EEA deal" or "WTO deal" from the various major commentators, Brexit drags down the existing trend growth rate by a relatively small point-something of a percent, compounding from now until 2030. In reality the "uncertainty effect" wouldn't be a small fraction of a percent each and every year, but front-loaded.

If you assume that UK growth rate drops from a trend of about 2.3% to 2.1℅ over next 14 or 15 years, we end up with ~3% lower GDP and personal incomes by 2030ish, compared to staying in the EU. Not a catastrophic loss cumulative to that point but the impact to some individuals in some years along the way, could be pretty painful before emerging, scathed, on the other side of a decade of disruption.

Obviously that is just assuming a "mild" drag on growth from getting a decent EU deal, while the "worst case" scenario would produce a worse case.

It's impossible for any of us without the facilities to run thousands of scenarios on oodles of data to project for ourselves an exact number by which we might be worse off. But the idea that whatever number you come up with to the nearest pound will not be the eventual right amount of pounds, so you should just disregard all models and say "nobody knows" is a bit of a cop out.
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cloud_dog

At a simplistic level, I just see all this additional cost (in focus / effort / etc) as taking focus away from trying to deal with the now because you need to deal with the tomorrow.

Regarding projections, as you say, their value is a reference point rather than an absolute because they become out of date the moment they are published as the powers that be are able to take action to reduce / reverse the projected impact (assuming negative).

Governments (and people) will always work to the make the best of the situation they are in / confronted with.

My view is that holistically, as a nation, we were better off as part of the EU. There, I've said it, I'm an 'inner' (not sure people realised that before).

JohnRo

Enough with all this vague remainer rubbish.

'Brexit means Brexit'

cloud_dog

JohnRo wrote: »

Enough with all this vague remainer rubbish.

'Brexit means Brexit'

Ah yes, but I'll look back on being in the EU with fond memories and when we vote against in another 30 years I will long for the greener grass.

steampowered

The IFRS is a very neutral, very well respected body that employs economics (not politicians) - so if they are predicting that the UK public finances will be £25 worse off by 2020 I am inclined to think that is a reasonable estimate. Especially when the IMF has downgraded the UK's growth forecast, and the Bank of England has forecast a sharp increase in inflation for 2017.

Total UK government spending last year was £762 billion so £25 billion is a significant but not a huge amount of money in that context.

I hope that any reasonable Brexiteer would accept that Brexit is likely to be some economic damage in the short and medium term. No matter which side of the fence you are on that is an inevitable consequence of causing significant upheaval to a country's legal system, trade arrangements and immigration arrangements. Anyone who claims that there will be zero economic impact from Brexit frankly looks ridiculous.

Whether the short and medium term economic issues outweigh the other reasons people had for voting Brexit, and what the long term economic effects will be, are more open to debate.

veryintrigued

JohnRo wrote: »

Theresa and Sir James heading to India, one cap in hand the other beating the drum for more immigration, that's tangible enough.

Not quite what the vast majority of the patriotic leave camp intended but it provides an insight into the likely future.

Its great to see that both sides of the argument are still full of tripe on this Brexit issue thread.

One would think that ministers and indeed Royalty never travelled abroad pre vote to [STRIKE]promote[/STRIKE] (sorry 'cap in hand') all things British.

As for immigration (presumably an increase in Indian?) you're going to have to enlighten us.

BananaRepublic

steampowered wrote: »

The IFRS is a very neutral, very well respected body that employs economics (not politicians) - so if they are predicting that the UK public finances will be £25 worse off by 2020 I am inclined to think that is a reasonable estimate. Especially when the IMF has downgraded the UK's growth forecast, and the Bank of England has forecast a sharp increase in inflation for 2017.

Whenever I read these forecasts, I look for an estimate of the forecast accuracy, and oddly enough I never find one. The IMF have a bad history when it comes to the UK, having been wildly wrong about Osborne's early plans. Each year I read in the Sunday Times a list of forecasts for the year ahead from a range of respected organisations. And they list the results of the previous years forecasts. Oddly enough the predictions rarely match the outcome. One or two sometimes get it right, but most are wide of the mark, occasionally hitting a value such as inflation or public sector borrowing, but missing others by a wide margin.

I suspect scientists would look at these forecasts and laugh. A forecast is useless without some measure of the accuracy. And I suspect were they to state the accuracy it could be summarised as "Well me luvlies, you might as well use your pet mouse to choose a coloured bowl cos it wouldn't be any less accurate".

bowlhead99

veryintrigued wrote: »

As for immigration (presumably an increase in Indian?) you're going to have to enlighten us.

Proprietor of my local curry house voted leave because he finds it difficult to recruit good chefs and other staff (at a price he can afford) with the cookery and the dialect skills to easily fit into his kitchen.

He figured if there were curbs on letting every European economic migrant into the UK regardless of skills, the country would have a bit more space and there might be more relaxation on letting people come over from the Indian subcontinent to work his kitchen. Reckons costs and hassle involved in cross training a Romanian in Indian culture and kitchen lingo when you're only just breaking even as it is, is just not worth it. Not sure May's trip was designed to unlock that sort of talent.

I pointed out that if we don't get a good deal for financial services post brexit, I wouldn't have as much income to spend on his food and drink and might have left town altogether, which would put a fair dent in his revenues. He hadn't thought of it that way. But his household was split down the middle on how it voted, so they all cancelled each other out, as I did with my Dad.
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