Thursday 18 August 2016

Minimal Brexit economic impact...will it last?

Coming as no surprise to readers here, Brexit has yet to have any meaningful impact on the economy.

There was a 2 week heart attack in June/July after the scaremongering panicked everybody on the result. However, since then we have seen retail sales are up, inflation up slightly, a weakened pound has powered tourism and employment has continued to slightly fall. The FTSE is hugely up for good measure.

However, much as it is fun to point at the increasingly more desperate remainiacs and their howls of outrage, we won't really see the impact over the short-term. When article 50 is enacted, when the fate of EEA or not is decided, then bigger decisions about UK investment will be made. Of course, in the meantime things carry on and in and of itself this will protect the UK against the longer term threats. Companies already here are going to get stickier as time progresses and they see the effects of Brexit taking years or decades.

So perhaps Remain are right, 6% less GDP potential by 2030, I cant see how that will ever really be noticed.

As a bet, I can see growth for the 3rd quarter coming in at 0.5% or better, when the doomsaying remainiacs are saying it is nailed on shrinking and recession.


Steven_L said...

My SIPP was down almost 20% a few days after the vote. I was expecting (and kind of hoping for) a small recession and a good few months of cheap equities. I'd have cut back on life little luxuries and squirrelled spare cash away for when I retire. But here we are, not even 2 months later, and most prices are back to where they were or up. Much less I want to buy all of a sudden, I like a bargain.

But I still think the stock market is pricing in a credit and property price recession in some respects. I still think Virgin Money is cheap at under book value. I still think some of the big REIT's look attractively priced for the long haul. And some of the better looking small caps (which in fairness also took a hit over the winter during the market weakness) are yet to recover. Inland Homes still looks 'reduced' to me for a start.

Scrobs. said...

As retired folk, we decided to vote a definite 'out' months - years, before the date for the referendum.

We found ourselves thinking seriously of the future for our kids and our grandchildren, and were horrified at the money spent on 'politics' and the unworthy 'members' of that great pile in Brussels, screwing cash from the UK and watching the feeble politicians just smugly accepting it all.

It does seem that remainiacs all seem to be wanting stuff for themselves, while exiteers wanted stability and a steady future for their families - and any others who wanted to vote likewise.

Politicians use such differences to an advantage which only they can fathom. They swayed a lot of much older people than me and Mrs Scroblene, but they also hit that particular class who were the guys and gals who actually fought to make UK a great place, and I don't feel these worthy people were the best to judge why we don't have a car industry, a coal industry, a train service a farming industry and the rest.

They did all they could to make UK a marvellous place, but back then, they were hampered by disasters like Wilson, Eden and Heath.

I'm sure there are loads of innovators out there now, thinking up ways to make UK greater again, and if they don't have the banks and lots of incredulous, thick politicians hampering them, they'll do the business!

I know I would have done had I been a few years younger - it's an amazing opportunity.

Electro-Kevin said...

Too early to understand the impact of Brexit but the Games are a great confidence booster and strengthens racial harmony - as well as show what an inclusive and outward looking people we are.

Nick Drew said...

Kev - that's an uplifting (and very appropriate) comment in the Friday drizzle: are you regaining your optimism?

dearieme said...

The effect of the Brexit vote will be as nothing when the storm hits. If the storm includes, say, the near collapse of Deutsche Bank, Brexit will just be more obviously a good idea.

I wonder if you can get odds against exIT happening before Brexit.

Steven_L said...

The Mail are calling it 'Quitaly'.

Scrobs. said...

I think Italy will just do it in a matter of weeks, Steven, and not even consider any consequences.

As for our lot, they'll fart around for ages, which is the norm. I mean, what about all those politician's salaries for doing bugger all! Dreadful thought!

'Yes Miniscule' springs to mind.