Wednesday 21 September 2016

ONS - No effect of Brexit

This is a very telling piece to come out today from the ONS.

There has been very little economic impact of Brexit. The remoaners will be keen to say all is yet to come and hell and damnation lies in the fuzzy, but not too distant future.

This of course makes remoaners sound like Mayan prophesiers (ironic!):

"This catastrophe was initially predicted for May 2003, but when nothing happened the doomsday date was moved forward to December 2012 and linked to the end of one of the cycles in the ancient Mayan calendar at the winter solstice in 2012 - hence the predicted doomsday date of December 21, 2012. (Nasa)"

Or as fellow writer BE of this parish likes to remind me, a penchant for predicting 9 of the last 3 recessions.

It is indeed still possible, indeed likely, that Brexit will have significant long-term downsides for the UK in some areas. But the upsides in my view are likely to out-weight these considerably.

What is not for debate anymore is the depth of the lies of Project Fear. And, better still, the good learning of the populace, especially of those who voted remain on the back of Project Fear, that the political class is a bunch of lying shysters.

Indeed, despite the hand-wringing, the metropolitan elite have made it far harder to make future cases on the basis of nanny knows best or "trust me." I understand too myself more clearly why the Scots Nats are here to stay and Labour won't be coming back in Scotland - Project Fear (although more justifiable in Scotland) is pressing a nuclear button politically. The damage of the lies cannot be undone for a generation or two.

Which, finally makes me realise that one George Osborne, still moving around Westminster has become a true Blairite, believing his own spin, hoping to make a come back when his lies are proved right after all.


Nick Drew said...

There is so much potential for a great outcome

but then you look at May ... Hammond (it pains me to diss my old mates like this) ... Fox ...

Hinkley ...

andrew said...

The thing about the impact of brexit
- positive or negative is no one really knows

Mostly because we have not actually left yet.

Electro-Kevin said...

Not only has there not been an impact - there has not been an impact despite outrageous hysteria from BBC/Remain types.

They will argue that Carney's interventions have steadied the ship.

What say you about that ?

Electro-Kevin said...

"Mostly because we have not actually left yet."

But Remainers definitely said armageddon the day after the vote. One person who appeared here said "You wait 'til next Tuesday" (or was it "see you next Tuesday ?") Does anyone remember my exchange with him ?

Osborne said he was going to implement an emergency budget but left the government instead.

Now I'm not saying Brexit won't be hard. But the Remainers' predictions of pre Brexit Brexit have proven false thus far.

Anonymous said...

Meanwhile, have The Powers That Be have decided that only hostilities against Russia can swing the US election for Hillary?

Hence the US attack on the Syrian Army, an attack for which the target coordinates were helpfully passed to the RAF, so we were also implicated in the deaths of 60 soldiers of a nation we're not at war with (and one which Parliament said we should keep out of in 2013)?

And hence the heavy ordnance (admittedly only one piece) using the aid convoy for cover and provoking a strike from Russia/Syria/Iran?

And hence Kerry's demand for the whole of Syria to be a no-fly zone - a demand which he knows won't be accepted?

Only asking.

Graeme said...

I think the commentators might have got it bass-ackwards. The UK has been leaving the EU for the last few years - our exports to non-EU countries are higher than to EU countries and the discrepancy appears to be growing. So when we told the EU we were leaving, the Eurozone started to crumple. The effect of leaving an optimal trade zone is, contrary to the line shoved out by the mainstream such as Simon Wren-Lewis more and more stridently since the referendum, in fact that the Eurozone is suffering from the threat that the UK might leave.

andrew said...

Both sides pumped out a large amount of ordure during the campaign and to judge either side by their claims at the time may be fun, but does not really tell anyone anything.

If we had stayed, we would not be facing millions of inbound turks, and now we have left house prices have not cratered.

Personally I thought it would not make much difference either way and I stick with that.

It is really hard to tell if we gain or lose.

How to measure?

I would suggest average living standards compared to the average EU living standard. In about 20-30 years time.

Electro-Kevin said...
This comment has been removed by the author.
Electro-Kevin said...

I'd really like to know how to counter "Carney saved the day with low interest rates" (Remainer.)

I think the answer will depend which side you are on. If the economy fails to tank it is because the Brexit effect is yet to happen. If it tanks "Ah. That'll be the Brexit effect."

My take on the economy is that the Remainers were wrong, at least about the immediate impact (though I'd love a one-liner against "Carney saved the day...") If the economy tanks ? Well it was going to anyway, largely because of the EU.

But what really nails it, I think, is if you accepted what I said without you noticing it (in my second para)

"...will depend *which side* you are on."

Because we have a nation dangerously divided - an issue over which I think people are ready to come to blows. Hardly a force for unity, this EU thing.

For that alone I think we would have been better off without it. (No wonder they had to lie to us so much over the decades.)

Nick Drew said...

"...will depend *which side* you are on"

there's more to be said along that line, Kev. I [and others - see CU's post above] won't be at all surprised if we encounter some economic trouble (even quite bad) that will, fairly, be ascribed at least in part to Brexit: but from 'my side'
(a) I hope and believe this will be of a magnitude that I will still consider to be 'a price worth paying', and that we will recover from in good shape
(b) there would have been economic trouble down the counterfactual Remain path, too (as you said)

Because we have a nation dangerously divided - an issue over which I think people are ready to come to blows

agreed: it seems likely** - I think we will burn through a material amount of our 'stability capital' - though I hope and believe we have enough in the bank (just as we had enough blood-&-treasure to see ourselves through WW1 and WW2)

obviously, some will consider it irresponsible to embark on a course of action that contemplates such things, and 18 months ago I would have been one of them: but Cameron's 'dealings' at the hands of the EU a year ago persuaded me otherwise - there has gotta be a line somewhere and the EU crossed it, for me (so yes, it's a War analogy)

** but what will be the forces ranged up on the streets? one of them is likely to be the 'military wing' of Momentum, and interestingly, they aren't pro EU at all, au fond, they are mostly (by numbers) not hardcore trots at all, but rather in (or from) the 'anti-current-state-of-affairs' blob, along with UKIP etc. Another will be the 'violent greens' (a horrible colour-way), who are basically incoherent and often rely for numbers on grannnies who've been told fracking will make their bladder problems worse etc. But the Polly-Toynbee / Beeb Remainders don't really have a military wing: they sometimes 'support' any type of protest as a kneejerk reaction - but they don't really enjoy it when the claret starts flowing and are tremendous physical cowards themselves (being altogether too keen on preserving their expensive dentistry etc)

the coming-to-blows aspect could be messy / protracted / distressing / costly: but strategically it doesn't look very dangerous

andrew said...

I'd really like to know how to counter "Carney saved the day with low interest rates" (Remainer.)


Interest rates halved.

Has your mortgage dropped at all? - mine hasn't.
Has it got easier / cheaper to lend to small businesses - dont think so.

The rate drop may have benefited multinationals / banks marginally.

Anonymous said...

Momentum v UKIP? Interesting.

Steven_L said...

"Carney saved the day with low interest rates"

Then it just goes to show how important it is that we can make our own decisions, unlike say Spain, Portugal, Ireland or Greece who effectively now all borrow in a foreign currency, have mass unemployment and are at always at risk of a sovereign default type crisis, all because they believe in the 'EU project'.

My take on things is more that 'brexit' spooked foreign investors, which in turn spooked a lot of domestic investors. It's no good to your average Singapore resident if his million dollar investment flat in 'up and coming' E14 is making 10% per annum, only for those gains to be wiped out by a plunging pound. It kind of defeats the object, so off they all ran. But they'll be back, this is just a bear trap before the real bubble gets going.

The hit to the exchange rate happened pre-Carnage getting involved, although his doom mongering might have been a factor. He probably hit it a bit more by announcing more QE and he almost certainly inflated bond prices and lowered borrowing costs. But government and corporate sterling bond prices were already at historic highs and didn't fall in the wake of the referendum. Even 'domestic' bonds of companies like Paragon - whose share price took at 25%+ dive - stayed flat after the vote.

A couple of days before the vote I was chatting to a barrister who asked which way I was going. He was a 'reluctant remainer' and cited the movements he'd seen in the financial markets on the opinion polls as evidence that foreign investment would flee the UK in the event of a 'leave' vote. Well I'm glad it did, it threw up some tasty bargains for my pension. I only wish I'd been 50/50 equities/cash rather than 80/20 so could have taken better advantage of the situation.

Carnage might have boosted asset prices a tad with his meddling, but this only helps you if you are a new seller - and now. I must admit I was expecting (and hoping for) a longer trough to buy good quality UK companies through. Her indoors mortgage has come down 25 basis points, but so what, she'll just lend the difference back to the bank at little over 0% anyway.

Steven_L said...

*this only helps you if you are a net seller - and now

Anonymous said...

"I'd love a one-liner against "Carney saved the day..." "

Carney issued panic measures when there isn't any panic.

Graeme said...

for the one-liner - Carney is hell-bent on trashing your pension. Defined benefit plans hit by lower gilt yields. Defined contribution plans hit by artificially raised asset prices and reduced yeilds. Carney's double whammy against savers.