Economy watch

wanderlust wrote:Oh dear!

Do you have a special alert on your phone for all the negative stuff, does it manage to filter out anything even remotely positive leaving just the doom and gloom you so love posting.
You are such a ray of sunshine.

Ignore him. He's in the same boat as Breadman (see what I did there).

Breadman is hacked off because he thinks leaving the EU will end his boat dream, Wanderlust blames Brexit for his house not selling.

Allllll just project fear.

xmiles wrote:http://www.bbc.co.uk/news/uk-37034337

Maybe we should take the long-term view and start to reinvest in British ingenuity and the work place, especially the arms industry. Its not as if its ever going to go away.

I think Wander is right to flag these things up, because, quite simply, the people with the money also think this way. I do sometimes feel he latches on to the more depressing topics in preference to the more 'enlightened' ones, but we can all see how the money markets react to even the slightest variation or change.
Keep going Wander, even though I'll be a penniless pauper by this time next year, if all your projections come true

gloswhite wrote:

xmiles wrote:http://www.bbc.co.uk/news/uk-37034337

Maybe we should take the long-term view and start to reinvest in British ingenuity and the work place, especially the arms industry. Its not as if its ever going to go away.

In a perfect world Glos but we don't live in that world.

The two major problems are that most British industry is owned by people/organisations/funds based overseas and they don't give a stuff about Britain. Secondly all they care about is maximising their short term profit and dividend income. For an example of how that works see "Sir" Philip Green - who is now apparently the fourth richest man "in" the UK.

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwic7NX8krnOAhWrJsAKHRT_BS8QqQIIIjAA&url=http%3A%2F%2Fwww.cityam.com%2F247266%2Fsir-philip-green-now-fourth-richest-man-uk-after-death-duke&usg=AFQjCNHVL927CUqfy2fL5pf7z7ypn0FAOA&sig2=XzNbZ1ml6lsHzSx84LQH2Q

You're right XM. Everything is now geared up to the fast buck, with as little commitment and investment as possible, including, in this case, pension funds. It truly is the age of the greedy man.

Hadn't heard about the Duke Of Westminster's death as I didn't have the TV on at all yesterday, I know he was a very wealthy man but he also did a lot of philanthropic work which he genuinely cared about and tried to make a difference - RIP

The reason I post the economic news is because we are currently at a crossroads in our country's history and it could go either way. The British public - who for the most part have little interest or understanding of world markets - weren't told the whole story and so it makes sense to try to show some of the complexities.
The simple of idea of replacing the trade we lose in pulling out of the EU can be replaced by new deals and new investment seems a sensible one on the surface so it's not surprising a lot of people bought into it.
However, what nobody mentioned was that a fall in the pound, the FTSE and confidence in the British economy in general is not the end game - because all of those have a knock-on effect on other parts of the economy.
The MOD article above is a good case in point. Nobody cut their budget and yet they have £700 million less to spend. 
Now if the Remain campaign had said "If we leave the EU, the MOD will lose £700 million" they'd have been laughed off the park and the usual tossers would have chanted their "Project Fear" mantra like Krishnas in an ashram.
But the fact is they have lost £700 million spending power.
And other areas of the British economy that have to trade in foreign currencies e.g. oil importers are also losing spending power hand over fist every day.
So where are these new trade deals that  are going to save the day? They've been negotiating for a good two months now and nothing announced despite the fact that if they got anything the Government would announce it at the first opportunity.
That may be because they've only got a few in the bag and they are waiting until they have enough not to look stupid. But the suspicion is that our negotiating position has been so weakened by our rapidly contracting economy that the British negotiators have been forced to accept poor deals.

I really hope that isn't the case, but that's why I'm keeping an eye on developments bearing in mind that there is usually a substantial time lag between economic downturn occurring  and the impact filtering down to people's everyday lives i.e. job losses, price increases, reduction in services, pensions etc.

We voted to accept that pain in the short term in order to get...well something...but the big question is how much will Britain suffer and for how long?

And if anyone says "nobody knows" they are pedantic dickheads. Technically "nobody knows" how Chorley FC would get on against Barca but we have a fair idea.

gloswhite wrote:

xmiles wrote:http://www.bbc.co.uk/news/uk-37034337

Maybe we should take the long-term view and start to reinvest in British ingenuity and the work place, especially the arms industry. Its not as if its ever going to go away.

That "long-term view and start to reinvest in British ingenuity and the work place" is basically what the Bank of England tried to stimulate last week.
They tried to buy British Government bonds to generate more money to lend to the Banks with the proviso that the Banks in turn lent it to business/industry - at the lowest interest rates of all time.
Unfortunately there was a hitch, but it might work out over the next month or so with a fair wind.

The reason they are turning to the Banks to stimulate investment is due to a lack of confidence in Britain's economy which has caused private investors to keep the money in their pockets.

But the greater concern is that British businesses and industry who have money to invest (so financing isn't the problem) are shelving their growth and investment plans because they are uncertain what the future holds.

That's normal for a contracting economy though. Even though industry has the capability to grow, they are reticent to do so. If orders are falling, why would you build a new plant or open a new shop?

MoD are on a run to make savings of £700 Million so one cancelling out the other. More seriously is the fact that MoD have mislaid £6 Billion worth of equipment, including 25% of weapons. Now that is a clusterfuck but for every penny invested I can show hundreds of pounds lost/wasted since the year dot.

Bollotom2014 wrote:MoD are on a run to make savings of £700 Million so one cancelling out the other. More seriously is the fact that MoD have mislaid £6 Billion worth of equipment, including 25% of weapons. Now that is a clusterfuck but for every penny invested I can show hundreds of pounds lost/wasted since the year dot.

They have to cut their budget by £700 million from around £14 billion so that's additional. On a positive note, the money they save wouldn't have bought them so much anyway

Do you know why the DE&S buy weaponry in dollars? I thought they bought British from the likes of BAE Systems and a double conversion would make no sense. I guess some branches of the MOD have no choice since we closed down our shipbuilding industry. Maybe it's because the likes of BAE now have to be involved in JVs with the Yanks?

wanderlust wrote:

Bollotom2014 wrote:MoD are on a run to make savings of £700 Million so one cancelling out the other. More seriously is the fact that MoD have mislaid £6 Billion worth of equipment, including 25% of weapons. Now that is a clusterfuck but for every penny invested I can show hundreds of pounds lost/wasted since the year dot.

They have to cut their budget by £700 million from around £14 billion so that's additional. On a positive note, the money they save wouldn't have bought them so much anyway

Do you know why the DE&S buy weaponry in dollars? I thought they bought British from the likes of BAE Systems and a double conversion would make no sense. I guess some branches of the MOD have no choice since we closed down our shipbuilding industry. Maybe it's because the likes of BAE now have to be involved in JVs with the Yanks?

Also BAe have a bigger footprint in the US so that might be a reason. All the quotes I see are in GBP but then we get most info from UK source so conversion might already be made.

I wouldn't invest another penny in the arms industry until the government start regulating who they sell to. At present we're complicit in the genocide of Yemen because the government would rather make a quick buck than protect innocent lives.

Lets be honest 74, it doesn't matter who you sell it to nowadays, it will always find its way to some war front somewhere, no matter how scrupulous the providers are.

Interesting figures out this morning showing that the Eurozone economies slipped back in the run up to the referendum with German growth down to 0.4% in the quarter to June and the Italian economy showing zero growth (0.3% for the EU overall) 
Obviously it's the post-Brexit figures in Q3 that we are waiting for but it could mean that the contraction of the UK economy may keep parity with Europe and although France has surpassed us since the referendum, none of the other European states may gain on us in the current period.

Not so good news is that the price of oil has risen to over $46 a barrel, however the Saudis  may help us out by releasing more of their stocks to keep the price stable.

I know that this is an article from the heavily biased pro-Brexit Telegraph but it provides context for our economic position v the EU if not v the rest of the world.

Basically economists feel that Brexit will damage both the UK and the EU which will allow other economies to make gains on both and this report seems to validate that view.
UK growth if we'd remained in the EU was projected by the IMF to be 2.2% in 2017 but despite them reducing the UKs growth forecast more sharply than any other top 16 economy as a result of the referendum the revised forecast is still higher than Germany and France. That said, I still think 1.3% for 2017 is optimistic at best - which is presumably why the Telegraph published it.

However this data can also be interpreted in a different way i.e. if the IMF forecasts are correct (and they are usually bob on) and we'd voted Remain, the UK economy would have grown 1.2% FASTER than France or Germany but now we're expected to grow by only 0.2% faster. Germany and France are the 4th and 5th largest economies in the world so although we may still be on track to catch up with them (France especially) it's going to take a helluva lot longer. If we'd stayed in the EU, we'd still be ahead of France and would have overtaken Germany in a decade or so.

Whether this relative slowing of growth will open the door to the big two and the emergent rapidly expanding economies of India and Brazil at the expense of the UK and Europe remains to be seen, but I wouldn't be surprised if May spread her legs for the Americans and/or Chinese to sort this one out. Probably the Americans as she's a Tory so thankfully we've got Boris on the case. Can't wait to see what new trade deals he negotiates with the country that has 25% of the total world wealth - compared to the UK's <4%. Fortunately we have professional negotiators who will do the actual negotiating.

Fair post this Wander, other than the distasteful comment,  if May spread her legs for the Americans and/or Chinese. You're letting your Remain side come to the fore there