Brexit, The Economy and House Prices (Part 2)

Conrad

GreatApe wrote: »

Manufacturing is going to die irrespective of Brxit or anything else.

In 20 years time it will be like agriculture is today, no one talks of boosting agriculture output or boosting agricultural jobs its an irrelevant 1% of GDP and 1% of jobs and manufacturing will go the same way.

I envisage a flowering of higher end and cottage industry type manufacturing. Who would have said 15 yrs ago we'd have the car manufacturing we see today.


We have huge growth in brewing as but one example.
Underground farms are springing up all over the place such as here;


http://www.wired.co.uk/article/underground-hydroponic-farm

Conrad

Rusty_Shackleton wrote: »

You're linking to someone who claims that increasing tariffs benefits the EU. That's a bit difficult when the EU sets the tariffs that are then collected by respective national governments.

Argue about tariffs all you like, there are arguments to both sides, but when someone shows such an obvious lack of comprehension on the system they're talking about, it's hard to take the rest of their point without the pinch of salt.

Not sure at all what you're on about here.


Tariffs inflate prices and make business less competitive. My vision is for the UK being a new global trade champion.


Not sure why you are for keeping African produce off our shelves, I'm all for trade over aid.


Tariffs are a block to free and efficient trade, the fact Spain adds to it's tax base by collecting tariffs ignores the fact it's economy may well be less efficient and able to create tax due to such inefficiencies as old fashioned trade tariffs.


What it is you think I don't understand ole Boy?

Rusty_Shackleton

Conrad wrote: »

Remaoners are in another spin this time about EU funding of UK infrastructure being withdrawn.

Once again the reaction is knee-jerk hysteria instead of rational assessment.

WE SEND THE EU ALL THAT MONEY, THEY GIVE US SOME OF IT BACK

Jeeze this is hard

The issue is where and what the UK government will spend that money on. Will money the EU spent on poor areas of the UK, neglected for so long by Westminster, find those funds working their way to yet another London based infrastructure project? Or perhaps to fund yet more cuts to corporation tax?

As for the *some* of that money back. It's irrelevant if membership brings about other benefits. The devaluation of sterling has cost considerably more than the difference between our net contribution and what gets spent on EU projects in the UK.

mayonnaise

Fella wrote: »

UK records first July Surplus since 2002:

buglawton wrote: »

Government runs July budget surplus for first time in 15 years

Is it really necessary to post the same info over and over?
I realise you guys are desperate for any morsel of positive economic news, but come on...

Rusty_Shackleton

Conrad wrote: »

Not sure at all what you're on about here.

Tariffs inflate prices and make business less competitive. My vision is for the UK being a new global trade champion.

Not sure why you are for keeping African produce off our shelves, I'm all for trade over aid.

Tariffs are a block to free and efficient trade, the fact Spain adds to it's tax base by collecting tariffs ignores the fact it's economy may well be less efficient and able to create tax due to such inefficiencies as old fashioned trade tariffs.

What it is you think I don't understand ole Boy?

The image you linked to on Twitter, in talking about tariffs states "and the revenue to Brussels keeps ticking up".

The European Union does not take receipt of tariffs, it just sets a common level across the EU. The actual money goes to the country it charging the tariff. The image is inferring that the EU imposes tariffs, and additional costs on consumers, because they profit from doing so. That is false.

Conrad

Rusty_Shackleton wrote: »

?

The devaluation of sterling has cost considerably more than the difference between our net contribution and what gets spent on EU projects in the UK.

U.K. Factory Production Hits Two-Decade High as Exports Grow

https://www.bloomberg.com/news/articles/2017-07-25/u-k-factory-production-hits-two-decade-high-as-exports-grow

Irish food producers loose out, Brexit, which has made it cheaper to import groceries from the UK, is main cause
http://www.independent.ie/business/brexit/mixed-brexit-blessing-as-grocery-prices-fall-35612508.html
Foreign demand for UK manufacturers' output rose at the second-strongest rate in the history of the series


http://www.independent.co.uk/news/business/news/uk-manufacturing-july-industry-exports-economy-brexit-eu-leave-survey-a7870311.html


UK’s post-Brexit tourism boom


https://www.ft.com/content/7ab76c41-3f21-3544-948e-6809e657c2fd



UK attracted more foreign investment than ever before this yr, the UK is still no' 1 destination in Europe


http://www.louthleader.co.uk/news/foreign-investors-bring-170m-investment-to-greater-lincolnshire-1-8073673

……………………………………..


UK unemployment rate falls to 42-year low


http://www.news.com.au/finance/business/breaking-news/uk-unemployment-rate-falls-to-42year-low/news-story/f37508ae02758d3e0318ffb296acee4a


Manufacturers’ confidence hits 22-year high.

http://www.milsted-langdon.co.uk/partners-blog/2017/03/manufacturers-confidence-hits-22-year-high/




Heathrow cargo hits five-year high


Global British trade at Heathrow soared in March, with volumes surging nearly 13% to 148,000 metric tonnes – the largest monthly growth in over five years.


Emerging markets in Asia and South America spearheaded the Airport’s cargo growth with exports to Mexico rising by 28%, Brazil 13%, India 9% and China 5%.


http://www.bqlive.co.uk/london-the-south/2017/04/12/news/heathrow-cargo-hits-five-year-high-25620/


FTSE 250 with more UK business as proportion is up 33% since ref, FTSE 100 with more exposure to foreign currency earnings are up by 23%

Conrad

Rusty_Shackleton wrote: »

The devaluation of sterling has cost considerably more than the difference between our net contribution and what gets spent on EU projects in the UK.

The J Curve;


https://en.wikipedia.org/wiki/J_curve


In economics, the 'J curve' refers to the trend of a country’s trade balance following a devaluation or depreciation under a certain set of assumptions. A devalued currency means imports are more expensive, and on the assumption that the volume of imports and exports change little immediately, this causes a depreciation of the current account (a bigger deficit or smaller surplus). After some time, though, the volume of exports may start to rise because of their lower more competitive prices to foreign buyers, and domestic consumers may buy fewer of the costlier imports. Eventually, if this happens, the trade balance should improve


Over the longer term a depreciation in the exchange rate can have the desired effect of improving the current account balance


https://www.theguardian.com/business/2016/oct/16/let-the-pound-fall-and-the-economy-rise

£ DEVALUATION IS POSITIVE;


There have been suggestions from some in the remain camp that the hollowing out of manufacturing will make it impossible to gain any benefit from the cheaper pound. This, frankly, is nonsense. The current account deficit will shrink as a result of stronger exports from the manufacturing and service sectors, the boost provided to the tourism industry, and because cheaper domestic goods and services will be substituted for more expensive imports. To say that dearer imports will make life more difficult for consumers is to miss the point. That’s how rebalancing works.


At some point, referendum or no referendum, the financial markets were going to say enough is enough and it is delusional to think otherwise.


Had the result in the referendum gone the other way, the deficit would have got bigger.


Running permanent balance of payment deficits amounts to borrowing growth from the future. Sooner or later, it has to be paid back and Brexit means it will be sooner.


A weaker pound works by making exports cheaper and imports dearer. The effect, as after all the other devaluations and depreciations of the past 100 years – 1931, 1949, 1967, 1976, 1992 and 2007 – will make the economy less dependent on consumers and more reliant on producers. Lord Mervyn King, a former governor of the Bank of England, thinks the latest fall in sterling is a good thing and he is right.




http://www.telegraph.co.uk/business/2016/10/12/if-europe-insists-on-a-hard-brexit-so-be-it/
The pound is now near 'fair value' based on the real effective exchange rate used by the IMF



Paul Krugman, the Nobel trade theorist, says the UK has been suffering from a variant of the "Dutch Disease", an over-reliance on finance that drove up pound and hollowed out manufacturing industries.

The devaluation is necessary and desirable. The pound is now near 'fair value' based on the real effective exchange rate used by the International Monetary Fund.

Rusty_Shackleton

I see lots of links Conrad, none of which say "post brexit devaluation of sterling is irrelevant because we'll save more than that by not paying into the EU (net contribution)" ... I'm not going through them to try and form your point for you.

Good god man, remove some bleeding line spacing from your posts!!!!

Conrad

Rusty_Shackleton wrote: »

The issue is where and what the UK government will spend that money on. Will money the EU spent on poor areas of the UK, neglected for so long by Westminster, find those funds working their way to yet another London based infrastructure project? Or perhaps to fund yet more cuts to corporation tax?

So you lack the confidence of say a Canadian or Australian in your nations ability to self-manage? Why?

Rusty_Shackleton

Conrad wrote: »

So you lack the confidence of say a Canadian or Australian in your nations ability to self-manage? Why?

No, I lack faith in Westminster to properly support anywhere but London and the South East. Why? Because of the overwhelming lack of support and investment for anywhere but London and the South East from Westminster, for decades.

The most recent example that comes to mind, DfT cancelled planned rail electrification in Wales, midlands and the north a week or so before announcing they'll press ahead with crossrail 2. Then you've got HS2, only going ahead because its seen to benefit London.

At least the EU allocated funds to areas based on need and deprivation.