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Brexit discussion thread XIV (Please read OP before posting)



  • Yes correct - dispute. Of course they could be wrong, although I expect they are at least as informed as we are, but it's interesting that the markets are remarkably calm about this

  • Those sunlit uplands look further away than ever.

    No trade deal with New Zealand, can't come to an agreement with Australia, the US says "Back of the queue" and as for China......

    The Australian trade minister had hoped to clinch an agreement with his U.K. counterpart Anne-Marie Trevelyan at the end of his long, multi-stop trip across the globe, but the two sides ended up kicking the can.

    Eh? I thought can-kicking was solely a lily-livered EU tactic specifically designed to thwart mighty Blighty from reaching its full global potential?

  • Mmm. Either the markets are calm, or they have already priced in uncertainty. I'm thinking it's more the latter.

    Sterling took a steep dive after the 2016 referendum and fell steadily for most of the rest of 2016 as it became increasing evident that the Tory Party/the UK government had no clue about how to go about Brexit, no coherent ideas about why it was Brexiting and no clear non-destructive plan for Brexiting. And it has bobbed up and down a bit since then, but has never really recovered.

    Sterling was at €1.30 just before the referendum; it fell to €1.12 by October 2016; in the five years since then it has bobbed around in the €1.10 to €1.20 band; right now it's about €1.18. My reading of that would be that, so far as the markets are concerned, uncertainly about how damaging Brexit will be set in in 2016 and has never really been resolved.

  • No doubt it will be sold as a win but Ford have committed to investing in retooling its Halewood facility to start building electric power units from 2024. This was aided by a investment by government investment (although the total plant investment of £230m pales in comparison to the €1bn investment by Ford in Cologne).

  • I would have said that the brexit risk (i.e. in the 6 months coming to the referendum - i.e. the fact that the referendum itself was a certainty and the outcome could be different to the status quo) led to an initial gradual drop from 1.44 to 1.25. Following initial positive sounding results, sterling bounced up but then immediately dropped upon the leave result announcement to 1.15 followed by a drop to a low of 1.08 - and more or less stayed in the low 1.10s range.

    Following the TCA, Sterling has strengthened - from around 1.11/1.12 to 1.18 - but there was no immediate reaction to the announcement of the TCA deal itself. So it seems that the markets put almost no credence in the idea that the UK would not accept the EU TCA deal.

    As said however, despite the negativity and to me credibility of the UK current threats to renege, the markets really aren't reacting at all.

    Simply put, as compared to a €1.44 price of sterling with effectively no possibility of brexit on the horizon versus a post brexit UK at least apparently credibly threatening to start an intractable trade war, €1.18 (and rising) makes me think sterling is overvalued.

    Unless of course the markets really don't believe Johnson would do something like that.

    Of course the markets aren't always right - but I have to expect that given the money at stake they have as good an idea of what is happening as we do.

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  • A win for the local community,yes.

    The Halewood engine plant employs around 700 whilst the Cologne body and assembly plant employs over 4000,so hardly a balanced comparison regarding amounts invested.

  • I've no doubt that the locals will be delighted.

    My point was that it will be sold as a win for the UK and Brexit.

    The funding would not have been permitted had they been in the EU (plus I'd be curious to know how much funding the taxpayer is committing)

  • Is there really such a thing as markets in so far as sterling is concerned? There's so much dark money funneling around and through London one could assume normal market conditions don't apply. There's wins in keeping the currency artificially high. Call me cynical but if it was anywhere else the currency would be on its arse.

  • That's what I don't understand. But the fact that the currency did respond to the brexit vote itself shows it's not entirely artificial.

  • There has to be some level of impact it's publically traded afterall. But outside of that I'd argue it doesn't take large sums to manipulate the levels. There's an open motorway to crown dependencies to maintain and I've no doubt there's tolls along the way.

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  • Sterling is traded in vast quantities, and there is no way that the UK government (or anyone else) could covertly make trades of the size required to affect the market price. The scale of activity required would be simply too large to be hidden.

    Besides, the UK government doesn't need to do that. No government does, in fact. There's a much simpler way of influencing your currency's price, if that's what you want to do; you adjust interest rates. If sterling interest rates rise relative to other currencies, more people will wish to deposit their funds in sterling so as to get the higher return and, in order to do this, they will go into the market to buy sterling, thereby driving the price up. And vice versa, if you want the price of sterling to fall.

  • In meantime Facebook just announced 10000 jobs in EU, good chunk probably endup in Ireland (eu population is 6x larger than uk)

  • Very little room for the UK? Has he learned nothing from the last few years?

    Frost already got his rejection in before the EU even officially announced the details (though Frost would have known about them). The UK will simply make up something else which is the most fundamental thing ever. They have already moved onto the ECJ, now arguing that the EU should give up its 'sovereignty' by agreeing to the UK having equal say in arbitration. And you can bet if the EU agreed to that then the UK would complain that the arbitration is biased agains the UK.

    Because that has been their fundamental believe from Day 1. They believe that the EU is out to get the UK, that the UK had no voice, no input into any decisions.

  • I have no idea why Sterling would be worth more than Euro at this point. Surely it should be on parity, at least, if not worth less.

  • Listening to a market watcher on Morning Ireland this morning and they explained the rise in the value of Sterling purely to the rise in inflation and the likelihood of an interest rate rise. Currently at 0.1% suggesting the BOE will move to 0.25%. All very low but nevertheless a more than doubling.

  • The "very little room" is that they've painted themselves into a corner - and aside from "jumping out the window" of a trade war with the EU, they have difficulties trying to make the NIP an ongoing issue. Aside from the ECJ, we are on to really silly stuff now like "we want to be able to sell food in pounds and ounces but not have kilogram weights indicated" at this stage.

  • Exactly, and they will keep banging that drum as loud and as often as possible. Auntie Nora getting stopped at customs will be the next one. The some truck getting stopped because of lack of paperwork, when isn't it obvious that it was just sausages.

    And that is before the UK diverge. When that happens the rate of checks will have to increase and then they will be back bleating on that its all a punishment and the EU just hate the UK.

  • NI has for over 40 years been able to cope with the differing value of the Irish currency and the GBP - many using two purses to ease the control of the two currencies, so the two currencies work seamlessly in NI. They have got used to metric and imperial measures being used side by side, and have no difficulty in downing a pint along with 20 grams of crisps or peanuts.

    Popular culture still talk of a 'country mile' as in 'missing by' whatever that might be, and 'spending a penny' and many other defunct measures, but when it comes to cash and short measure or gouging prices, they are not slow to complain. New measures are now being used (e.g. on the BBC) like Olympic swimming pools to describe volume, or football pitches when it comes to area (of course football pitches vary in size depending on code - soccer being smallest and GAA being largest), and another one I find hard to understand - double decker buses - I'm not sure whether that is height, length, or volume, or even weight. There are many more that I cannot fathom - like furlongs (used in racing), hands (used for horses and bananas), barrels (used for oil), creels (used for fish, lobsters and crabs), etc etc.

    NI has serious issues with its diverse cultures that need sorting. What it does not need is to become a political football for kicking between the UK and the EU. It needs serious investment, and job creation as prosperity brings peace. It is a poor region of the UK - not the poorest, but one of the poorest.

  • Great news,(although nothing to do with Ford putting its faith in its UK workforce)...Meanwhile,US tech giants can't keep pace with recruitment(according to this link)in the UK as they are expanding so quickly there.

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  • This is the utter nonsense that was coming from QT on Thursday. Worryingly, there wasn't anyone to challenge him.

  • Not sure I would use the term "can't keep pace" it's more that the qualified staff required are in short supply.

  • There's a huge amount of denial around Brexit. One of the main reasons it is doomed to abject failure is because it is so toxic, polarising and divisive. The idea that the UK will be able eventually able to rally around it and support it is nonsensical (and two countries in the UK flatly rejected it from the outset and wanted nothing to do with it).

  • Buried in the article . Companies considering moving entirely as they can't get staff. No doubt talent has exited. Also the headcounts open in the big 4 is actually guide small couple of hundred. I think many workers have simply gone back to the EU. And the levels of cash the likes of Amazon are throwing at people to move to them appears to show this is true. Limited number of people.

    Tom Richardson, CEO of money management app Lumio, told CNBC that it’s “so hard” to find the right people.

    “We are a start-up and with only a seed round and we cannot attract devs or great product managers,” he said. “Starting salaries are mad.”

    To get around the issue, Richardson is considering relocating his business or hiring more remote workers, but he said both have their risks.

  • That is less than 1,000 jobs - high paid ones and all in London, but still not a lot of jobs.

  • Despite my dislike of brexit I do believe many on this thread have made inaccurate statements in an attempt to support their fanciful claims.The claims that the energy crisis isn't affecting Europe is an example,the claims that the UK financial sector is set to collapse is another ridiculous myth touted and seized upon by those of a hive mentality prevalent on this thread.

  • Well the Economist thinks that London is turning into a financial backwater

    not going backwards but not going forward either and hence becoming less relevant

    In meantime “levelling up” is being abandoned

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  • We're not at the stage yet where people can admit they were openly lied to by Vote Leave and the right wing press - perhaps they feel that such an admission will leave them looking gormless and naive i.e. to be so easily and readily taken in by obvious conmen and shysters is not exactly a badge of honour and doesn't say much for one's judgement.