Economy watch

China's investment in Spain has now reached 60% of Spanish total inward investment prompting forecasters to suggest Spain's economy will grow by 3% next year. Most of the money seems to be going into heavy manufacturing in the north to take advantage of the big ports.

By comparison, our latest post-referendum growth forecast is being heralded by the Telegraph as a sign that Brexit won't make much difference despite the fact that growth is currently expected to be around the 1% mark next year. Prior to the referendum it was forecast at around 2.5%.

Until we know what the exit deal is in a couple of years time we are stuck with considerable  uncertainty and speculation so the Government need to get on with it and face the music asap.

Without that money, we won't be able to pay the mega millions bonuses

gloswhite wrote:Without that money, we won't be able to pay the mega millions bonuses

Fortunately the Government gets the £65 billion before the bonuses are handed out. 
That's a lot of money - about 14% of our national annual budget. 

Nobody likes the Wolf of Wall Street culture and the ridiculous amount of money they earn in the City but in mitigation they do earn more for the country than any other sector.

Good news - sort of.

In the three months following the referendum the economy grow by half a percent!
That said the previous quarter showed growth of 0.7% so it has slowed down but not as much as the forecasters initially though it would - they estimated growth would fall to 0.3%. 

Growth was all in the service sector with construction, manufacturing and industrial production all in negative growth - despite the pound being devalued by 20%.

wanderlust wrote:Good news - sort of.

In the three months following the referendum the economy grow by half a percent!
That said the previous quarter showed growth of 0.7% so it has slowed down but not as much as the forecasters initially though it would - they estimated growth would fall to 0.3%. 

Growth was all in the service sector with construction, manufacturing and industrial production all in negative growth - despite the pound being devalued by 20%.

And Nissan has agreed to build their next two models at their Sundeland plant guaranteeing 7,000 ,jobs. Plus this has been a bumper year for tourism with a massive influx of foreign holidaymakers taking advantage of the weak pound, mainly Americans.

Unfortunately the price of fuel is beginning to rise noticeably, due to dollar v pound, which always, in time has a big knock on for goods delivered.

Reebok Trotter mentioned in passing: wrote:And Nissan has agreed to build their next two models at their Sundeland plant guaranteeing 7,000 ,jobs. 

I don't really think "not closing down" is proper news RT - there'd be a helluva lot of news if every company that isn't changing anything for now puts out a press release to that effect. Although I suppose Nissan apparently have 2 new models to promote.
It's good that Nissan have decided to stay a bit longer. I'm just wondering why they are saying they are building "the next two models" in Sunderland - as opposed to just saying they're staying put which would give more of a sense of job security to their workforce? Did the 7000 even consider that Nissan might pull out of Sunderland?
If so, I'm not convinced this is the reassurance they were looking for.
Personally I don't think that many of the "global" businesses will pull out of the UK because they are used to working in a wide range of economies and will be able to adapt their production and pay structure accordingly. It's how wage control in an inflating economy affects the people that concerns me, but that's not likely to have much impact for a while yet.

About time all the Remoaners admitted and accepted that the gloomy forecasts about what would happen immediately after the referendum have simply not transpired. Osborne, in particular, has been shown to be massively wide of the mark with his failed project fear. May was wisely, thankfully and promptly decisive in ejecting him from the cabinet. 

In our future negotiations, to achieve the best possible deals for the country, we need everyone to promote the positive now and cease to project any spin that might deter prospective partners.

Here's a copy of the top-rated public comment on the BBC site in response to today's economic news:

"Great news that the UK has the highest economic growth of any of the G8 nations and Nissan is investing heavily in Sunderland.

Fair to say now that the Treasury 'Brexit' forecasts and Remain rhetoric turned out to be pure baloney."

okocha wrote:About time all the Remoaners admitted and accepted that the gloomy forecasts about what would happen immediately after the referendum have simply not transpired.

I withdrew the equivalent of £100 from an ATM in Portugal recently.

I got 98 Euros.

In July, a similar transaction in Spain delivered 115 Euros.

Last December (prior to the Brexit vote) I got 122 Euros for my £100.

And you can't blame it all a global economic downturn because things are supposedly on the up, worldwide.

In comparison with our European neighbours, we are (financially) worse of as a direct result of the Brexit result.

That is a fact.

So I reserve the right to continue remoaning.

And we haven't even left the EU yet.

How much of Sterling's fall "correction" as there is or seems to be an admission that it has been overvalued for sometime and how much is due to "uncertainty" caused by the referendum result? I know a definite figure cannot be arrived at but as inflation, employment and interest rates have remained relatively unchanged and there hasn't been any other major financial event that I can think of is it just the market making a few bob gambling on sterling's value?

I know the pound has devalued vs the dollar but so has the Euro.

We haven't left the EU yet and it is still too early to see the consequences of leaving.

Osborne and co. had incorrectly predicted calamity in the immediate aftermath of a Brexit vote. 

Now that the decision has been taken, we need to adopt a united, positive attitude in order to ensure the best possible outcome, giving confidence to the rest of the world about "being open for business".

People are so short term, only bothered about how it hits them in the pocket now. Just buy a few less fags, beers and sweets you tosspots, and you really don't need the full Sky package.

In 20 years this will be heralded as a turning point in British society and people of the future will forever be thankful to us.

Great people can think long term, wankers can't see past next week.

okocha wrote:Osborne and co. had incorrectly predicted calamity in the immediate aftermath of a Brexit vote. 

Now that the decision has been taken, we need to adopt a united, positive attitude in order to ensure the best possible outcome, giving confidence to the rest of the world about "being open for business".

Yes Osborne and co did exagerate the immediate consequences of a brexit vote as part of the ludicrous project fear campaign but 48% of those who voted thought brexit was a mistake and I see no reason why they should now pretend that everything is going to be OK. Our negotiations with the EU and the rest of the world are not going to be influenced by what voters think anyway.

xmiles wrote:Yes Osborne and co did exagerate the immediate consequences of a brexit vote as part of the ludicrous project fear campaign but 48% of those who voted thought brexit was a mistake and I see no reason why they should now pretend that everything is going to be OK.

What does continually moaning achieve though? It's utterly pointless. I think some people would rather the country went bankrupt and unemployment was at 95% just so they could say "I told you so" from their cardboard box behind the Town Hall.

Natasha Whittam wrote:People are so short term, only bothered about how it hits them in the pocket now. Just buy a few less fags, beers and sweets you tosspots, and you really don't need the full Sky package.

In 20 years this will be heralded as a turning point in British society and people of the future will forever be thankful to us.

Great people can think long term, wankers can't see past next week.

I agree that we think short term far too much in this country - look at the farce over the decision about Heathrow for example - and we will definitely only see the consequences of brexit in years to come. I would expect the position to be a lot clearer in say 3 or 4 years rather than 20 though.

Natasha Whittam wrote:

xmiles wrote:Yes Osborne and co did exagerate the immediate consequences of a brexit vote as part of the ludicrous project fear campaign but 48% of those who voted thought brexit was a mistake and I see no reason why they should now pretend that everything is going to be OK.

What does continually moaning achieve though? It's utterly pointless. I think some people would rather the country went bankrupt and unemployment was at 95% just so they could say "I told you so" from their cardboard box behind the Town Hall.

This is the problem with using a referendum to decide things. There is no recall unlike with elections.

If the referendum had gone the other way, especially with that size margin, would brexiteers have shut up about the EU? They very definitely would not have and Farage was quite explicit about that point. Look at how long right wing Tories have been causing trouble in the Tory party.

xmiles wrote:

This is the problem with using a referendum to decide things. There is no recall unlike with elections.

If the referendum had gone the other way, especially with that size margin, would brexiteers have shut up about the EU? They very definitely would not have and Farage was quite explicit about that point. Look at how long right wing Tories have been causing trouble in the Tory party.

I agree it was a spineless thing for Cameron to call a referendum, strong leadership was needed and if he was convinced it benefited us to stay in the EU he should have said so and stayed in.

But now we're out, yet we still have two sides sniping at each other. What's the point, what does it achieve?

If everyone just embraced the change things would be a lot smoother.

The economy has definitely gone downhill since the referendum - just not by as much as the Remain predictions yet - and that's because none of the proposed changes have happened so at the moment we're just dealing with the impact of the speculation surrounding Brexit as opposed to a response to actual trading figures and GDP etc.

We can only hope that we can put in a solid economic performance for the next few years to restore confidence in the UK and the pound because that is the problem currently.

What is clear is that predictions on both sides are in the balance for the foreseeable future as nobody expected the pound to fall so low so quickly, and eventually - and it will take a couple of years before we get the full effect - the positive impact in reducing the cost of exporting and the negative impact of having to buy goods and raw materials at an inflated price will both kick in - and the net effect is unpredictable.

At the moment, it's looking like Britain will move towards being a low cost labour market with a general trend towards capping/freezing wages and that will be used to attract foreign investment with multinationals coming here to minimise manufacturing costs and then selling the goods to the European market.

I expect the pain that the Chancellor constantly says we will have to go through will take the form of rising prices against a background of fixed low/capped wages although I really hope the prognosis is better than that and our negotiators pull a decent deal or two out of the hat.

However in order to take advantage of any decent trade details, the Government has to turn around the current decline in construction, manufacturing and industrial production so it's going to be a bit of a juggling act although this Gov has form in trying to borrow their way out of problems like this.