https://www.bbc.co.uk/news/business-46377309
BoE say no deal Brexit would bring a recession worse than the financial crisis.
BoE say no deal Brexit would bring a recession worse than the financial crisis.
Brexited | the worst threads live the longest
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In the latest episode of the United Hour Podcast, Nik (@Rood) is joined by CEO Duncan Drasdo and Financial Director Andy Green from the Manchester United Supporters Trust for a special episode on all things behind the scenes at Old Trafford including a brief history of MUST and their aims today, views on INEOS and Sir Jim Ratcliffe so far, and the Old Trafford regeneration.
This'll matter not a shit to brexiteers, they'll say it's all fake news.
Referendum next May?
This must be Corbyn's cunning plan to hold a referendum two months after the UK have left the EU.
There's definitely something in the water in the UK.
Question for anyone who understands financials more than me:
In the case of a no deal brexit would it be wise to transfer a lump sum of cash from a U.K bank account to a European one prior to March 29th? Following on from this, would it make sense to then transfer it back to the U.K account after the pound reaches its nadir and use that money to buy a cut price house within the U.K after the inevitable recession? Any caveats or pit falls to this plan?
In the case of a no deal brexit would it be wise to transfer a lump sum of cash from a U.K bank account to a European one prior to March 29th? Following on from this, would it make sense to then transfer it back to the U.K account after the pound reaches its nadir and use that money to buy a cut price house within the U.K after the inevitable recession? Any caveats or pit falls to this plan?
So it doesn't cover the actual current proposal or any comparison to no brexit scenario?
This continued behaviour of trying to con the public is going to lead to even more disenfranchisement.
There are many possible pitfalls.
Just a few as an example.
When do you know for certain that it is a no deal - as soon as you do know, the markets would have reacted.
Will you as UK citizen have problems with having access to your money in Europe.
When do you know when the nadir has been reached.
If you buy the house in the UK will the price fall even further after you've bought it.
There's loads more.
It's a gamble.
The best case scenario is based on Chequers, which is clearly meaningless by this point. @vodrake pointed out that there is also an assumption hidden in the footnotes that the UK’s current WTO deals made as part of the EU would be rolled over. So it’s not based on reality and even then it makes grim reading.
Thanks for taking the time.
Regarding your first point, I guess would proactively transfer the money though this would carry the risk of losing some money if a soft brexit goes ahead.
I’m a dual national so access shouldn’t be a problem.
I would assume the nadir would be reached fairly quickly post Brexit due to market instability, investment fears etc before it starts to rebound?
I plan to reside in the U.K for the long term so even if house prices plummet further after I purchase, surely in a decade or two they would pick up (barring a mad max armaeddon scenario).
But nevertheless, even taking into account my answers above you would consider it a large risk?
Strange as it may seem, if the UK suddenly decided to cancel Brexit or remain basically as they are, the pound could actually improve if certainty returned to the markets.
Depending on how bad it got in the UK, it could continue to fall for some time.
Three years ago who would have thought it would get this low and the UK haven't left yet.
Yes eventually no matter how bad it got the prices would improve.
Also pretty sure there'll be some capital controls in case of no deal.
I've already moved most of my £ domiciled investments.
Saw this comment in the comments section of the Guardian, made me chuckle.
"Project fear on steroids again. The pound is overvalued anyway and the inflation effect will wash through in a year."
The pound was overvalued at €1.42/£1 three years ago. Now its overvalued at under €1.13/£1 .
I'd like to know the rate Brexiters actually consider to be the correct one.
"Project fear on steroids again. The pound is overvalued anyway and the inflation effect will wash through in a year."
The pound was overvalued at €1.42/£1 three years ago. Now its overvalued at under €1.13/£1 .
I'd like to know the rate Brexiters actually consider to be the correct one.
Yes, agreed, there are many things I'm thinking of, none of them good.
What are the Bank of England, who presumably have at least a few people who know a bit about economics, doing scaremongering about a possible recession? Isn’t that pretty much the last thing you’re supposed to do?
As Paul says, sterling was much stronger a few years ago. If you "proactively" transfer your funds and then Brexit gets cancelled, you risk getting hammered.
Hang on though, it said on BBC news that the BoE said it ‘wasn’t a forecast’ and was ‘worst case scenario’ and it’s already been criticised by credible economists.
I can remember when interest rates were 18%, cant remember who the pm was tho.
Remember them at 17%.
Bought my first property in 1977 and interest rate was 14% and the PM was Callaghan
Your basically talking currency speculation and there are millions of people around the world already trying to get their head round the same thing on Brexit. There is a lot of money to be made if you guess the right way and a lot to lose if you don't.
The crux is this, if it was a sure thing that the the pound is going to weaken on the 29th of March due to a no deal Brexit, the pound would already be at 0.80 to the euro. It isn't there because the market movers, those that effectively set the price, who are a hell of a lot better at speculation that you or I, they don't think with any amount of confidence that is going to happen.
At the moment the exchange rates are stuck in the middle ground of the potential outcomes, which now seem to be down to 3: May's deal (pound strengthens), No Brexit/2nd Ref (pound strengthens lots), No Deal (pound crashes).
If you did what your suggesting, you'd be hoping for just one of those outcomes, a no deal which our leaders should be doing everything possible to avoid. It is still an unlikely outcome so I'd be very wary of putting a bet on it. All comes down to your risk appetite and what you can afford to lose. If you enjoy a flutter then sure go for it, just keep some eggs at home. Or head to the casino right now and put it all on red.
I'm having conversations every day at work on how much of our foreign imports we should cover off in forward currency deals and the answer for us is just to avoid the worse case scenario. We will miss out on some potentially large upsides if Brexit gets cancelled, but we will avoid significant consequences in the event of a no-deal, that's the most important bit for us.
Do you still think Brexit is a good idea?
I heard Kuenssberg on the news then talking about the economic forecast and how dreadful it is.
I don’t know if she was quoting someone or if it was her own observations but she finished it with “but Brexit has always been about something more than economics”.
What the feck does that actually mean. The “more than just economics” were always masqued as “with sovereign control we can be prosperous”.
Well that’s absolutely bullshit as we have just found out, so what remains of the “more than just economics” claim?
It boils down to “keeping brown people out of this country” doesn’t it?
feck this disgusting era of fascist wankers we have found ourselves living in.
I don’t know if she was quoting someone or if it was her own observations but she finished it with “but Brexit has always been about something more than economics”.
What the feck does that actually mean. The “more than just economics” were always masqued as “with sovereign control we can be prosperous”.
Well that’s absolutely bullshit as we have just found out, so what remains of the “more than just economics” claim?
It boils down to “keeping brown people out of this country” doesn’t it?
feck this disgusting era of fascist wankers we have found ourselves living in.
The Brexit economics and investment advice is interesting for me. I’ve been trying to figure out what to do for ages... went full cash a couple of months ago as the FTSE seemed to be in free fall, but cash is just a guaranteed loss anyway - especially when the pound drops.
Decided to try to hedge my bets and stuck some into gold & other mining sectors today, plus a few American stocks. still got about 50% in cash though, which I wouldn’t mind moving a bit more of.
Decided to try to hedge my bets and stuck some into gold & other mining sectors today, plus a few American stocks. still got about 50% in cash though, which I wouldn’t mind moving a bit more of.
Laura Kuenssberg is right in that Brexit is not an argument of economic pros and cons, rather it’s an inchoate cry of nationalist, small town anger. If it gets to a second referendum, most leavers will still vote leave and Remain will only win by virtue of mortality rates over the last 2.5 years and, assuming it is allowed, giving UK citizens living in the EU a vote.
On these terms with this govt? No
Good feckin lord
No.
Take all economic arguments (and its clearly in the Brexiteer’s favour to do that now) out of the discussion and what are you actually left with?
If the country is going to be less prosperous and likely suffer a recession with an extremely tough battle to get out of said recession, what’s it actually all for?
I’m open to any suggestions but I can’t see past racism and xenophobia.
I don't think you've done anything wrong there at all, I moved some in to cash because I didn't have the bollocks to go 50% or more as you have. I'm hoping now there'll be a rebound if a soft brexit happens, or at least if the pound tanks then foreign and even the FTSE should rise. Would have been better to move to cash first though!
Watching Newsnight the forecasts they've chosen are for May's deal GDP to be 4% less after 15 years, which isn't much at all, well less than the margin for error I'd have thought, and for No Deal a more worrying 8% less after 15 years. Picturing this sort of thing was enough to make me vote Remain, but for hardened Leavers it's a bit meh, really.
Leavers just dub anything negative as project fear. A blind faith that brexit is good. Nothing anyone can say will ever change that, except when the if’s crystallise and people know for a fact. But of course by then there will be another 10 things to blame.
Of course, my question was how relevant a 4% drop in GDP over 15 years is to the debate though. Obviously if it were much worse then it would be, no question about that.
It’s relevant because a shrinking economy over a 15 year period is a big issue. You have to remember the natural economic cycle means that a countries GDP should grow over time. A 4% shrink doesn’t sound like a lot but when you think our GDP even now is growing at say 0.5-1% a year, we are saying it’s setting us back circa 15-20% over 15 years of all things carried on as they are now. Which is a big assumption but not an outrageous one when you look at economic growth over periods exclusive of significant events such as the financial crisis.
Ok, not your subject. They're not saying GDP will be 4% lower in absolute terms after 15 years, they're saying it will be 4% less than it would otherwise have been. So something like an annual growth of 1.7% instead of 2.0%. Or as you reasonably put it, setting us back 4%, not 15-20%. Not welcome, but not huge either.
The gov forecasts don't say we'll actually shrink by 4% over the 15 years, just that we'll be 4% smaller than we likely would have been had the status quo continued.
This is still a massive amount of money, of course. But 711 is right in that a percentage figure like that isn't going to sway much. It needs to be put into concrete figures, a la the "350m per week" figure Leave came up with, only with less lying involved.
A 30% drop in house prices would almost make it affordable.
Nice one.
If it affects the Irish housing market similarly then I'm all aboard the Hard Brexit train.