UK Votes to leave EU

Cantona's Collars · 13-10-2016 09:22AM

I was listening to the economics report on The Last Word and already certain high demand tech items are increasing in price in the UK to offset the falling Pound. Even certain UK retail sites are forcing anyone outside the UK to their Euro site where goods are more expensive than on the UK site. Is this the start of things to come?

First Up · 13-10-2016 09:24AM

zerks wrote: »

I was listening to the economics report on The Last Word and already certain high demand tech items are increasing in price in the UK to offset the falling Pound. Even certain UK retail sites are forcing anyone outside the UK to their Euro site where goods are more expensive than on the UK site. Is this the start of things to come?

Only the start of it.

steddyeddy · 13-10-2016 09:24AM

zerks wrote: »

I was listening to the economics report on The Last Word and already certain high demand tech items are increasing in price in the UK to offset the falling Pound. Even certain UK retail sites are forcing anyone outside the UK to their Euro site where goods are more expensive than on the UK site. Is this the start of things to come?

Yes and this is just due to the value of the pound. What until tariffs come in.

steddyeddy · 13-10-2016 09:27AM

The pound fell below $1.22.

Peregrinus · 13-10-2016 09:31AM

Tesco does have a point here, in that Marmite is produced in the UK from raw materials which are themselves sourced in the UK. At first glance, there's no obvious reason why a fall in sterling should lead to a rise in the price of Marmite. A rise in the price of imported foods, yes, but not Marmite.

I suspect that what;s going on here is that Unilever reckon they can jack up the price of Marmite, and people will keep buying it because the brand is strong, the product is fairly unique and demand is not price-sensitive. Many of their other lines are imported, but if they put up the price of those lines they will lose sales, since the brands are not so strong. For example, Ben & Jerry's icecream is a Unilever brand, and it's imported. But if they put up the price of that product, there are plenty of other premium ice creams to which people can switch, or they can just eat less icecream.

Basically, Unilever is seeking to make excess profits on Marmite in order to cross-subsidise imported lines which because of the rise in sterling are now being sold at a loss, or at an insufficient profit margin.

That's the kind of thing that you get with currency volatility. To a point, the UK has always been exposed to this as a result of their choice not to joint the euro. But the decline in sterling since the Brexit vote is much greater than anything they've had to face in quite a while, so this kind of thing is going to happen on a scale not seen previously.

whatstherush · 13-10-2016 09:43AM

Peregrinus wrote: »

Tesco does have a point here, in that Marmite is produced in the UK from raw materials which are themselves sourced in the UK. At first glance, there's no obvious reason why a fall in sterling should lead to a rise in the price of Marmite. A rise in the price of imported foods, yes, but not Marmite.

I suspect that what;s going on here is that Unilever reckon they can jack up the price of Marmite, and people will keep buying it because the brand is strong and demand is not price-sensitive. Many of their other lines are imported, but if they put up the price of those lines they will lose sales, since the brands are not so strong. Basically, Unilever is seeking to make excess profits on Marmite in order to cross-subsidise imported lines which are now being sold at a loss.

That's the kind of thing that you get with currency volatility. To a point, the UK has always been exposed to this as a result of their choice not to joint the euro. But the decline in sterling since the Brexit vote is much greater than anything they've had to face in quite a while, so this kind of thing is going to happen on a scale not seen previously.

It's not just Marmite though, it's a range of their brands. I read a comment from a guy last night who works for unilever in nothern England somewhere making deodorant, saying it doesn't matter that the deoderant was being made in the UK, the can and cap were made in the EU and their prices had gone up.

People bang on about how a falling pound is great for exporters, but when your exports are made up of a subset of imported items, you don't gain half as much.

Peregrinus · 13-10-2016 09:46AM

Yup. The falling point is good for net exporters - those who export more (by value) than they import.

There are net exporters in the UK. But the majority of people are net importers, as is the country as a whole.

steddyeddy · 13-10-2016 10:25AM

Also bear in mind these price increases reflect the price of the pound a few weeks ago. Not right now where the pound is valued below $1.22.

seamus · 13-10-2016 10:25AM

Peregrinus wrote: »

Yup. The falling point is good for net exporters - those who export more (by value) than they import.

There are net exporters in the UK. But the majority of people are net importers, as is the country as a whole.

Ultimately the net exporters get hit too.

The unilever demand goes to show that the main concern of being a net importing country is that a weak currency causes price inflation in the entire economy.
If Tesco have to increase big product lines by 10%, as the biggest retailer in the UK that affects the entire population. People's day-to-day costs rise, which forces an increase in salaries, which forces an increase in prices.

Even net exporters can't escape this price inflation, at best they may be able to offset it with increased sales volumes.

The UK government needs to get a grip on Sterling before it becomes a big problem. UK retailers will likely have a bumper Xmas this year and then suddenly find costs shooting up as the price to restock has jumped by 10-15%.

Enzokk · 13-10-2016 10:26AM

maryishere wrote: »

You are confusing power with empire. What the average British person cares most about is the standard of living / quality of life that they and their families have i.e. the economy, NHS, immigration etc. Not how much power their empire has ffs! Being a G7 power and being able to disengage successfully from Australia, New Zealand, Canada, India,New Zealand, Singapore etc and grant those countries Independence and seeing them succeed on the world stage (having had a grounding in British law, British infrastructure etc ) is a sign of success, not of failure.

How many Irish people do you know who have emigrated to Argentina in the past 100 years?

I think that while many do think local, there are a lot that hark back to the days of being GREAT Britain. History is written by the victors and for many years the victors were the conquering British. People will also move to countries where they will feel comfortable, so its not strange that English speaking Irish will move to Australia rather than Argentina. Its a bit like commenting that Argentinians move to Spain.

maryishere wrote: »

Because it was not meant as a complete list. We invited the British along with the IMF and EU to bail us out only a few years ago, when nobody else would lend us any more money.
Emigration has been very high over the past century from Ireland to other countries which were red on the map 100 years ago.
I also did not include Ireland as Gay Byrne said we should hand the country back to the British, with a note of apology.

So you think that the EU was just going to let a fellow euro user fail? How about the biggest trading partner? There was vested interests in the countries that bailed out Ireland. If countries had to do it out of the goodness of their hearts they would have let us fail. That and the UK banks had a hand in the collapse of the system and were exposed to a lot of financial pain, it wasn't because of their love of the Irish that they decided to bail us out.

the evasion_kid wrote: »

If the eu want to punish the UK and other countries for leaving it just goes to show what the EU has become....it's odd that there is people out there who would champion such a thing

whatstherush wrote: »

How can the EU "punish" a country for leaving? It's a tacit omission by you that there are advantages to being in the EU. If you leave you leave, there's no "punishment", just forgoing the advantages of being in the EU by their own choice.

It's classic kipper logic, the UK was going to hold the EU over a barrel because of all those BMW's they buy and have their cake and eat it. Now that the cake turns out to be a shít sandwich, it's the big bad EU "punishing" them again. All ways the fúcking victims!

As whatstherush posted, there will be no punishment. There will just be a deal on what the EU can offer to what the UK is requesting. If they want access to the single market there will be conditions attached to that. There is no punishment, the UK will ask for what they want, the EU will counter with what they are willing to offer in return. If the EU will offer a deal that seems harsh there it won't be as if there isn't history for this.

SeanW · 13-10-2016 10:28AM

Junkyard Tom wrote: »

Including the British banks who stood to lose much more than they 'loaned' us if we'd have not had such spineless goons running the show. Even the IMF supported Ireland forcing concessions from bondholders.

But the EU and ECB wanted Ireland to pay 100 cents on the Euro. Guess who got their way?

CMOTDibbler · 13-10-2016 10:38AM

SeanW wrote: »

But the EU and ECB wanted Ireland to pay 100 cents on the Euro. Guess who got their way?

Indeed yes. But it was our government that (without any outside influence at the time) decided to guarantee the Irish banks including the toxic Anglo Irish Bank.

Once that was done, we were tied to that decision in all its ramifications. If Anglo had been let collapse (as it should have been), the government wouldn't have been on the hook for its debts. From that point on it was government debt and reneging on government debt has serious implications. The choice was still theirs to make. It couldn't be imposed on us. The ramifications would have been ours too though.

seamus · 13-10-2016 10:41AM

Enzokk wrote: »

If they want access to the single market there will be conditions attached to that. There is no punishment, the UK will ask for what they want, the EU will counter with what they are willing to offer in return. If the EU will offer a deal that seems harsh there it won't be as if there isn't history for this.

The only deal on the table will be the same one that Norway and Switzerland have. The UK can't get any special treatment. Because then the others will ask for it, and other countries in the EU will start wondering about whether they too should leave and just get a special deal.

In the UK and Ireland, the EU is painted as a German project with Angela Merkel at the helm trying to set up some fourth Reich. It's pantomime nonsense, but it's a meme started by the notoriously anti-German British media in the 1970s and has persisted.
In fact, the Germans would be the first to leave if it was possible to get all the benefits of the EU without the costs.

All of the net contributors are under constant pressure to keep their outflow to the EU as low as possible.

The UK is not going to be treated harshly, they're going to be treated equally, because that's the way this has to go. Anyone under the impression that the UK should or would get a special deal is fooling themselves.

Fratton Fred · 13-10-2016 10:59AM

seamus wrote: »

The only deal on the table will be the same one that Norway and Switzerland have. The UK can't get any special treatment. Because then the others will ask for it, and other countries in the EU will start wondering about whether they too should leave and just get a special deal.

In the UK and Ireland, the EU is painted as a German project with Angela Merkel at the helm trying to set up some fourth Reich. It's pantomime nonsense, but it's a meme started by the notoriously anti-German British media in the 1970s and has persisted.
In fact, the Germans would be the first to leave if it was possible to get all the benefits of the EU without the costs.

All of the net contributors are under constant pressure to keep their outflow to the EU as low as possible.

The UK is not going to be treated harshly, they're going to be treated equally, because that's the way this has to go. Anyone under the impression that the UK should or would get a special deal is fooling themselves.

I agree, although that I would argue the British Media painted it is a French run thing, mainly for their own good, with the Germans going along out of a sense of responsibility. The French tried to block the UK entrance to the eu initially.

wes · 13-10-2016 11:11AM

Peregrinus wrote: »

Tesco does have a point here, in that Marmite is produced in the UK from raw materials which are themselves sourced in the UK. At first glance, there's no obvious reason why a fall in sterling should lead to a rise in the price of Marmite. A rise in the price of imported foods, yes, but not Marmite.

Petrol to deliver it would have gone up for example. There are a lot of indirect costs that would effect the price of goods, even if they are largely produced internally.

steddyeddy · 13-10-2016 11:13AM

Fratton Fred wrote: »

I agree, although that I would argue the British Media painted it is a French run thing, mainly for their own good, with the Germans going along out of a sense of responsibility. The French tried to block the UK entrance to the eu initially.

Why did they do that?

greendom · 13-10-2016 11:19AM

steddyeddy wrote: »

Why did they do that?

De Gaulle believed that the UK wasn't really European and that it would have to much focus on the US.

CMOTDibbler · 13-10-2016 11:21AM

greendom wrote: »

De Gaulle believed that the UK wasn't really European and that it would have to much focus on the US.

I thought that he questioned their commitment to a European economic framework. He was vindicated by the fact that two years after they had joined they had a referendum to decide whether to stay in or not. :rolleyes:

Pro Hoc Vice · 13-10-2016 11:23AM

steddyeddy wrote: »

Why did they do that?

Because De Gaulle believed the U.K. Would do exactly as they have done.

But here is an Article setting out his reasons.

https://www.theguardian.com/world/1967/nov/28/eu.france?0p19G=c[URL][/url]

seamus · 13-10-2016 11:30AM

steddyeddy wrote: »

Why did they do that?

As others have pointed out, it was DeGaulle specifically who vetoed British membership, for his own reasons. Turns out he was right that the British would have difficulty getting over their sense of nationalistic superiority.

But in any case, the French public weren't behind DeGaulle and approved UK membership by referendum a couple of years after his veto.

But I guess the UK media seized the veto as an opportunity to paint it as a case of the French hating the British.

catbear · 13-10-2016 11:47AM

seamus wrote: »

But I guess the UK media seized the veto as an opportunity to paint it as a case of the French hating the British.

The British never need a reason to condescend.

oppenheimer1 · 13-10-2016 11:53AM

Enzokk wrote: »

So you think that the EU was just going to let a fellow euro user fail? How about the biggest trading partner? There was vested interests in the countries that bailed out Ireland. If countries had to do it out of the goodness of their hearts they would have let us fail. That and the UK banks had a hand in the collapse of the system and were exposed to a lot of financial pain, it wasn't because of their love of the Irish that they decided to bail us out.

Incidentally the UK conditioned that the loans to Ireland be denominated in sterling to protect themselves from the exchange rate risk. Prudent at the time perhaps, but now offers Ireland the opportunityto get a substantial discount on the loan

Zubeneschamali · 13-10-2016 12:00PM

steddyeddy wrote: »

The pound fell below $1.22.

Fighting back today, as May allowing parliament in is seen as a bit of a softening.

steddyeddy · 13-10-2016 12:07PM

So project fear becomes project reality.

13-10-2016 12:11PM

What come across to me from the debate/reaction in the UK is the emergence of a rift between commerce/business and the governments of the UK, governments which have become much more ideological in nature. Ideology is trumping the economy.

CMOTDibbler · 13-10-2016 12:12PM

Zubeneschamali wrote: »

Fighting back today, as May allowing parliament in is seen as a bit of a softening.

I thought she said they wouldn't get to vote on it?

There's a High Court challenge to this going on right now.

Enzokk · 13-10-2016 12:13PM

Zubeneschamali wrote: »

Fighting back today, as May allowing parliament in is seen as a bit of a softening.

The rate will go up and down as these things usually do, I guess its about the trend of the value. There is no denying it has been trending down, even if there has been days or a week where there seemed to be some kind of recovery.

Fratton Fred · 13-10-2016 12:14PM

steddyeddy wrote: »

Why did they do that?

http://news.bbc.co.uk/onthisday/hi/dates/stories/november/27/newsid_4187000/4187714.stm

steddyeddy · 13-10-2016 12:19PM

Fratton Fred wrote: »

http://news.bbc.co.uk/onthisday/hi/dates/stories/november/27/newsid_4187000/4187714.stm

You'd think they'd remember WW2.

R P McMurphy · 13-10-2016 12:25PM

zerks wrote: »

I was listening to the economics report on The Last Word and already certain high demand tech items are increasing in price in the UK to offset the falling Pound. Even certain UK retail sites are forcing anyone outside the UK to their Euro site where goods are more expensive than on the UK site. Is this the start of things to come?

I have noticed this once or twice alright

UK Votes to leave EU

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