Brexit, The Economy and House Prices (Part 2)

Thrugelmir

CKhalvashi wrote: »

A 20% shift is considerable and easily could make a business model unviable if that business working on a long term contract and pricing in £ with a number of Euro expenses. There have been several casualties as a result of this.

Such a business model has no long term viability. The business plan will fail on what if scenarios. Exchange rates will fluctuate. Always have done. Importing from China and Asia , i.e. having your own products manufactured started 2 decades ago.

Jon_B_2

I work in a business that exclusively sells European produce into the U.K. Market. There is no UK alternative as it is a protected market (think food and you are in the right ball park). We price quarterly and right now it's carnage. Putting prices up 5% for the last quarter of this year I don't think will even cut it. Nobody knows where the £ will be at Christmas.

We actually spoke to the banks last week and they were saying they expect it to still be 1.09 next March. What do they know? It's already 1.08 and falling.

It was 1.17 only a few months ago.

The BoE will have to intervene soon and the long awaited interest rate rise cannot come soon enough to stabilise the £.

Rusty_Shackleton

Jon_B wrote: »

I work in a business that exclusively sells European produce into the U.K. Market. There is no UK alternative as it is a protected market (think food and you are in the right ball park). We price quarterly and right now it's carnage. Putting prices up 5% for the last quarter of this year I don't think will even cut it. Nobody knows where the £ will be at Christmas.

We actually spoke to the banks last week and they were saying they expect it to still be 1.09 next March. What do they know? It's already 1.08 and falling.

It was 1.17 only a few months ago.

The BoE will have to intervene soon and the long awaited interest rate rise cannot come soon enough to stabilise the £.

You and your business just arent patriotic enough, believe in Britain and you will be fine! We'll all thrive with enough self belief and a can do attitude! (/sarcasm)

BoE are stuck between a rock and a hard place. Raise rates to curb inflation and stablise sterling, but do so and cause problems for those with mortgages, cause consumption to drop, or worse, encourage people to borrow more on credit cards to avoid changing their spending habits.

CKhalvashi

Thrugelmir wrote: »

Such a business model has no long term viability. The business plan will fail on what if scenarios. Exchange rates will fluctuate. Always have done. Importing from China and Asia , i.e. having your own products manufactured started 2 decades ago.

Perfectly viable on the condition the margin doesn't tighten up within a very short space of time. I've never seen movement this far between those 2 currencies overnight.

Trying to move your pricing by large amounts within days/weeks isn't an easy job whereas that sort of movement in different stages over the course of a few years is normal business as if you do things the way I do, you simply end up with different reference rates (which aren't the same as the exchange rate at the time) depending on when the original contract was negotiated.

Not trying to dispute what you're saying completely as some of it is correct, however going from my own experiences certain things aren't.

economic

Rusty_Shackleton wrote: »

Or the person making the claim could provide some evidence for it.

you are also making a claim. prove it. if greatape cant prove his claim, it doesnt mean you will be right.

Rusty_Shackleton

economic wrote: »

you are also making a claim. prove it. if greatape cant prove his claim, it doesnt mean you will be right.

Im claiming that he is wrong, im not suggesting alternative causes for those not living decent lives in the UK. The burden of proof is thoroughly on him (or you if youve evidence to support it)

Just an aside as well, i said, provide some evidence for... Prove is a very high bar to set on a forum!

cogito

Rusty_Shackleton wrote: »

The necessity was the end of the soviet union and the subsequent collapse of east Germany. It was a choice between reunification or a 3rd world country on the doorstep. Id love to get some German views of that claim of fiscal transfers east. Sounds like stuff youve pulled out of the air to me, but if you have some evidence please do share

You really need to brush up on your history. East Germany did not collapse as a result of the end of the Soviet Union but it very nearly did as a result of the botched monetary union with West Germany AFTER reunification. Fiscal transfers still amount to around €50bn per year with a total of around €1.7 trn since reunification.

Here's a good but long read on the subject.

https://www.diw.de/documents/publikationen/73/diw_01.c.510020.de/diw_econ_bull_2015-27.pdf

As I've said before, it's not my job to educate you so do your own googling before posting nonsense.

cogito

Jon_B wrote: »

I work in a business that exclusively sells European produce into the U.K. Market. There is no UK alternative as it is a protected market (think food and you are in the right ball park). We price quarterly and right now it's carnage. Putting prices up 5% for the last quarter of this year I don't think will even cut it. Nobody knows where the £ will be at Christmas.

We actually spoke to the banks last week and they were saying they expect it to still be 1.09 next March. What do they know? It's already 1.08 and falling.

It was 1.17 only a few months ago.

The BoE will have to intervene soon and the long awaited interest rate rise cannot come soon enough to stabilise the £.

It's not within the BoE's remit to amend interest rates to support the £. The remit is price stability and economic growth.

economic

Rusty_Shackleton wrote: »

Im claiming that he is wrong, im not suggesting alternative causes for those not living decent lives in the UK. The burden of proof is thoroughly on him (or you if youve evidence to support it)

Just an aside as well, i said, provide some evidence for... Prove is a very high bar to set on a forum!

you are suggesting alternative causes because you said its not only mental/dysfunctional issues that stop people from having decent lives. so you would still need to prove it (or provide evidence for this that proves it).

GreatApe

Rusty_Shackleton wrote: »

Or the person making the claim could provide some evidence for it.

I already have

Clearly economically this country is great. Its not in the modern British character to say it out loud but this is a great country. You are fortunate to be here and alive this decade.

If we were having this debate a hundred years ago or in a third world country I would agree with you that the situation would be dire and lots of people would have lots of problems befall them. War starvation plague pain terrible conditions economic medical and political. We have none of that today.

If you have a crap life in the UK it's down to being a dysfunctional individual or having a dysfunctional family.


Whereas your motto seems to be the really !!!!!! idea! That people with low incomes have !!!! lives.