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Wednesday 21 September 2016

Brexit - More Bad News

While the anti-EU part of the Fourth Estate, for which read most of it, keeps telling its readers that Britain leaving the EU is not going to be a problem, and any dastardly foreigner getting uppity can easily be overcome by Theresa May standing up and telling them where they get off, the bad news that the popular press is at present ignoring continues to pile up. And some of it makes for grim reading.
Today it was the turn of the OECD “The OECD has slashed its 2017 growth forecast for the UK in half as a result of the Brexit vote and warned of ‘very high’ uncertainty ahead … The multilateral economics institution had projected UK GDP growth next year of 2 per cent in June, but today reduced that to just 1 per cent in its latest Interim Economic Outlook … That was easily the largest downgrade for any major advanced economy”.

Still, at least their 2016 forecast growth was up from 1.7% to 1.8%, so not all doom and gloom. But then came news from the Bank of England - also today: “The Bank of England’s summary of business conditions, based on reports from regional agents, said ‘investment intentions had fallen since the EU referendum’ and pointed to ‘broadly flat business investment over the next year’”. And there was more.

In stark contrast to July’s agents’ report, which found employers were buoyant about their prospects, the September report said employers were circumspect about taking on new staff and in many sectors were only hiring ‘where the business case was strong’”. We should expect that to feed through into the unemployment figures, although seasonal jobs may offset any increase. But then came the FT with bad news for the City.
After pointing out that “More than 8,000 financial services companies based in the EU or the European Economic Area rely on single market passports to do business in Britain”, Martin Arnold’s report tells “There are growing fears that when it leaves the EU, the UK will lose the passporting rights that allow financial services companies licensed in one EU state to work across the bloc, rather than having to win licences in individual countries”.

And while noting “The UK accounts for 40 per cent of Europe’s assets under management and 60 per cent of its capital markets business, according to a report for the British Bankers’ Association” he adds “Most big US, Japanese and Swiss banks use London as their hub for passporting into other EU markets. Since the Brexit vote in june they have been drawing up contingency plans for moving some business out of the UK”.

Arnold then concludes with this chilling statistic: “The total number of passports held by UK groups was 336,421 because many have multiple passports for different sectors in different countries, the FCA said. The total held by European businesses for access to the UK is 23,532”. Or, in other words, if the passporting scheme were to end as a result of Brexit, it would hurt us a lot more than it would hurt them.

But all you hear from the Europhobes is that there’s nothing to worry about, it’s not really happening, the news is all good, and we should stop talking the country down. Someone needs to get a grip on reality, and fast.


Anonymous said...

I'll tell you what you are, young Fenton: a traitor! That's right! A traitor! Only an oily backstairs crawler like you could be so dishonest as to suggest all is not well since we gave Johnny Foreigner the heave-ho. Oh, you might think you're being all clever, what with your bandying about of facts, boring us rigid with errant nonsense we don't see in the d tel. But mark my words well Timothy: this won't end well for you! Now make your mind up: are you one of us or do I book you a one-way berth on the Southampton sailing to bongo-bongo land, somewhere in deepest Europe? Because we'll make Britain 'great' again - with or without you!

Anonymous said...

The central problem is, and always has been, the way the original promise of the EU has been corrupted. Now it's almost entirely a profiteering and power exercise for international banking. If you want evidence, ask the millions of victims in Portugal, Italy, Ireland, Greece and Spain.

Or you could ask Yanis Varoufakis, who I've just watched on C4 TV News. Who sensibly detached himself from the betrayal of the Greek people.

"Ordinary" people here see the current disaster in Europe and judge accordingly. Many - like me - have close friends there who have suffered. None of that can be discounted.

I support the original intentions as promoted, the social democratic remainder of which has done more for non-London areas than anything tories or New Labour or LibDems have ever done. But not what the EU became. And therein lies the problem.

The EU has to change or it is doomed. Brexit is only the first reaction, its ugly racism and xenophobia the worst manifestation. If it doesn't change it will simply become the plaything of privateers and spivs. There are many who think that's all it is anyway.

Like the Labour Party, had the EU leadership followed the stated founding precepts it wouldn't be in its current state. Its likely tombstone will read, "Here lies the EU. Died of a theory."

Rivo said...

Standard Brexiteer boilerplate response to these kind of things is along the lines of "Oh don't worry, the German Automotive Industry will save us from EU 'spite'. They'll force Merkel to lean on the other EU countries to protect their profits"

As far as I can tell this conveniently ignores 2 things:

Firstly, German Car Makers are shrewd enough to realise that giving the UK a sweetheart deal for leaving will result in lots of other countries leaving, and potentially the dissolution of the EU. This will hurt their sales much more than a bump in the price of a BMW for UK customers.

Secondly, as far as I can tell there aren't likely to be many options for the British public when it comes to buying cars other than to put up with said increase in price. The British car industry can be roughly divided into three categories - plants that make cars directly for foreign companies, e.g. Nissan. Plants that make cars for "British" brands owned by foreign companies, e.g. Mini, Land Rover or smaller car companies who are dependent on foreign companies for parts, e.g. Caterham, Ariel.
Companies in the first two categories may well decide that relocating to mainland Europe, thus allowing them to benefit from cheap East European labour while avoiding the complications of selling to Europe from the UK is a worthwhile investment. As the Japanese government recently demonstrated this is a very real possibility.
Companies in the third, generally small, specialist manufacturers, will find new barriers to their business; sourcing of parts for their vehicles while Britain tries to negotiate decent trade deals to replace those it lost by withdrawing from the EU for example, causing their own prices to rise as a result.

tl/dr: The british car-buying public will get to enjoy more expensive cars all round. But hey, at least we'll "have our country back"