UKC

No-one seems to have mentioned on here the Office for Budget Responsobility's estimate of extra borrowing of £59 billion because of brexit. I know that some will dismiss this as the wildly-inflated moaning of biased 'experts' but the OBR from what I have googled seems to be independent and with a number of respected economists making the prediction. My considered opinion, if this prediction proves to be accurate, is 'Holy shit! That will be a f@'k of an expensive bill!'

In reply to Pekkie:

Perhaps it's beause 51% of the country are doing thier best to ignore it and 49% are fed up with saying "I told you so"?

In reply to Pekkie:

I believe the Office of Budget Responsibility have been dismissed as a bunch of clueless experts possibly even lunatics.

In reply to Pekkie:

I wonder how much the EU will bill us for expenses occurred in negotiating our withdrawal? R4 said it might be in the order of billions. Messy divorce? It hasn't even begun yet!

In reply to Pekkie:

£59 billion pounds you say... hang on a minute I'm going to have to take my socks off to work this one out...

Why that's about £350 million a week, every week for over three years, looks like the NHS is going to have to wait a bit longer for its promised windfall!

In reply to KevinD:


Hmm...experience at Financial Times, Treasury, Inland Revenue, Professor Oxford & LSE. And your experience/qualifications (and your 3 likes?)? Wonder which side I will go for...

In reply to Pekkie:

It's called sarcasm.

In reply to Hugh J:


Ahh, apologies. Is this like that other thing you earthlings indulge in? Humour?

In reply to Pekkie:

It's the best thing to do in this situation.

In reply to Pekkie:

59 Billion may be only the extra borrowing. Not the whole bill....

In reply to Pekkie:

Surely it's a fairly small price to pay for an ideological win for a proportion of the population and schemers in the Tory parter who have safeguarded their positions, not to mention eliminating a thorn in the party's side

In reply to Pekkie:
It's minuscule. I don't think the general public have a handle on these numbers at all. Most of them thought £350m a week for the NHS is a big number that would solve all the problems.

£53bn when the anual cost of servicing our £1.23tn debt is £43bn?

Hardly anything at all.

It's all just numbers. The real problems are going to be negotiating low export tariffs. Until that happens everything is just pure conjecture from both sides.

.

In reply to DancingOnRock:




You are Ed Milliband and I claim my £5

In reply to Pekkie:


On the plus side, the pile of after eights will be fekkin huge!

In reply to climbwhenready:

I've no idea what his policies were.

Labour had to go, the alternative was the coalition as people still didn't trust the conservatives.

I really don't care who runs the country but Teresa May is the Primeminister and she has accepted the task. People need to get behind her and stop squabbling.

When you hire a lawyer to defend you, you don't try to find one who thinks you're innocent, you find one who will defend you, irrespective of their own beliefs. It's a professional task.

In reply to DancingOnRock:


Flawed.

In reply to DancingOnRock:


Really?

I'm certainly not getting behind someone when I don't know what they stand for, they won't say what they're trying to achieve, and they have made it clear my interests and values are not the ones they're looking after.

She isn't a lawyer, I didn't hire her, and I'm far from convinced that she's even competent.

In reply to skog:

Who would you like to negotiate the exit then?

In reply to DancingOnRock:



It's not just the huge numbers that the public don't get, it is also the notion of the different kinds of debt.

Anyone else curious as to why the proposal of government debt now hitting 90% of GDP seemed to cause our new Chancellor and the markets so little concern - and yet Osborne drove austerity on the back of such figures!

In reply to Pekkie:

Duly dismissed.

In reply to DancingOnRock:

Who do I have available to choose from? I don't think it is actually being done by Theresa!

But that isn't what I said anyway: she probably has to lead it, but I'm not 'getting behind her' as I'm opposed to what little I can discern of what she stands for and says she's aiming for, and I have no real idea what the rest of it is.

I have no influence anyway, but my moral support goes to whoever is trying to retain a good chunk of the free movement, free market access, and the stability of the EU. Which certainly isn't Theresa May.

In reply to Jim C:
What's it like outside the"reality-based community"?

(C) Karl Rove, of course

In reply to MG:

youtube.com/watch?v=slsUjtKlh2A&

In reply to Shani:

What percentage of debt do you think is a sensible limit?

In reply to Jim C:


What's that supposed to mean? Dismissed by whom? A know nothing brexiteer?

In reply to Pekkie:

A link to an economic forecast that was correct, ever, would be pretty cool.

In reply to Pekkie:

We know who voted for it...let them pay

In reply to MG:

It's made me look into it a bit. List of countries with dept as a % of GDP as of Dec '15.

http://www.tradingeconomics.com/country-list/government-debt-to-gdp

Who on earth owns all this debt!

In reply to Pekkie:

There is no need to be insulting.
You were the one that said that you knew your post would be dismissed as 'wildly-inflated moaning'
I was just responding as you expected

You Gov - Still no Bregrets... 68% of people think that Britain should go ahead with Brexit, unchanged from when we asked the same question in October.

In reply to Lenin:


True but weather forecasts are rarely totally accurate. Whereas general descriptions of climate are usually spot on. If it's anything like £59 billion then we should be worried.

In reply to Bulls Crack:


Wrong. I'll be paying for it and so will you. Hopefully JimC will offer to chip in but I doubt it.

In reply to Pekkie:

Economic forecasts are repeatedly totally incorrect. If Renzi loses December 3rd/4th, the Euro could implode, if Le Pen gets in the Euro could implode. If you want something to get agitated about, it is why people at the OBR get paid shit loads when UKC could give them forecasts with as much accuracy, for free

In reply to Lenin:


Or any gxbshite leaning on the bar of the local pub?

In reply to Jim C:


Don't you think that a reply of 'Duly dismissed' is insulting? Certainly arrogant and provocative.

In reply to Pekkie:

http://www.nationaldebtclock.co.uk/

Who cares, really, who cares?
As Dax pointed out up thread, meaningless numbers!
We all got shafted in 2008 and were subjected to 8 years of 'Austerity'.

In reply to Pekkie:

' A know nothing Brexiter'

In reply to Lusk:


Well yes. £59 billion is a fairly small hill of beans compared to the UK's gdp of @£2,500 million. But it is a cost to the economy which was unnecessary. It's a prediction. If we end up paying to remain in the single market without a say in the rules the obvious question would be 'why pay £59 billion for something that is worse than what you started with?' Sorry to be an awkward sod, but these are the facts.

In reply to Jim C:


I think we can agree that any poll of people could possibly be wrong (and that can swing both ways with some suggesting people still want Brexit and others saying that we don’t).

It’s been pretty clear during 2015 and 2016 the inaccuracy of polling such as You Gov etc.

e.g. UK election (2015), Brexit (2016), US election (2016), whether England will win the world cup (1967 onwards)...

In reply to Jim C:


Sorry about that. The beer talking.

In reply to DancingOnRock:


I think Boris and Nigel should. After all they are the main ones responsible for this clusterf*ck, and they have just run away.....

In reply to Trangia:

So Renzi loses, Le Pen wins, the Euro goes tits up and Farage and Boris are seen as prescient. Stop worrying and go climbing or for a walk, sheesh.

In reply to MG:

It is determined by market confidence, to whit, talk of 90% of GDP has not bothered the markets thus far and macroeconomists reckon it can be much higher when economies are depressed and inflation is low.

In reply to Trangia:


Just a silly thought. Does anyone remember that ridiculous series 'Dumb and dumber'?

In reply to Jim C:

'A know nothing brexiter'

Actually, this is not the mindless insult that it seems at first glance. The'know nothings' were a political movement in mid 19th c USA that opposed immigration.

https://en.wikipedia.org/wiki/Know_Nothing

In reply to climbEdclimb:
I would suggest that there's an awful lot of people who want to see some stability regardless of which way they voted.

I would suggest that a lot of people who voted remain (there was no real facts to base a descision either way) now want the whole thing sorted as painlessly as possible so that they can get on with their next 5 year plan.

Don't forget a large %age didn't even vote.

Going back on a democratic vote can't happen. The only thing that can happen is politicians hold it up as long as possible until they are happy on the terms. That's true democracy.

.

In reply to DancingOnRock:


Well, yes. But what if the end result is paying to be part of the single market (the alternative being economic suicide) without a say in setting the rules. But with the costs of uncertainty ie £59 billion. I realise that what I'm saying is what you don't want to hear but I'm going to keep on saying it.

In reply to Pekkie:


youtube.com/watch?v=hiThRIHwQDE&

In reply to Jim C:

Very good. But if the bill is £59 billion then my share - and yours - is about £1 million. Is that right? (I'm crap at maths)

In reply to Pekkie:
I have no idea what you mean.

It must be pretty well understood by everyone that free trade and free movement are inexorably linked and we will have to pay something to have access to it. That was pretty much the only 'fact' that was true throughout the debate.

How much that is and what the tarrifs are that the EU will want to try to impose are all that's up for bargaining.

The big US banks and Chinese industry will want to have a big say in this as they have huge investment in the country. The government and the EU will be listening to them.

.

In reply to Pekkie:


Possibly. But your share of the £1.23tn you already owe dwarfs that so I wouldn't be too concerned. You can pay it back over your and your children's children's lifetime. By which time a few £tn won't be worth much anyway due to inflation.

In reply to DancingOnRock:


Well that's a relief! Nothing to worry about then.

In reply to Pekkie:

What annoys me about such numbers, is that they are predictions. What no one has bothered to put in are the u certainties sour rounding this number. I'll bet the error bars are massive and without an explanation so the assumptions, such numbers are meaningless. I have experience in a different area and we now try able articulate any uncertainties in risk assessment rather than simply say we're the experts and believe our numbers.

In reply to DancingOnRock:

Just one thing that's got me worried. How do you separate the shmucks who know nothing from the people who actually know something on here?

In reply to kipper12:

Translate into English, please.

In reply to Pekkie:

Usually the OBR crystal ball isn't truly accurate;

In March 2014, the OBR hiked its forecasts across the board, revealing that the economy was growing far more strongly than it previously anticipated. Britain would grow by 2.7pc in 2014, the analysts said, well above the 1.8pc figure predicted a year earlier and the sharpest upgrade in decades. In fact, even that was too low - GDP jumped by 3.1pc over the course of the year.

In 2011’s Autumn Statement it had to slash growth forecasts, in part because of the eurozone’s sovereign debt crisis.

Back in 2010, the agency anticipated productivity growth returning to its long-term average of around 2pc per year. Yet official figures show that output per hour has improved by just over 2pc over the last five years, a very disappointing pace for such a crucial measure of economic potential,

In reply to Lenin:

Economics; Can not recall the quote exactly, but it is the art of guessing the future, then explaining why you were wrong when something else happens.

In reply to Pekkie:


Cool, if we all owe a £1M, Halifax can whistle for the insignificant £6000 I owe them.

In reply to Pekkie:

It's obvious. The 59 billion is a prediction. My issue with all such predictions when viewed in isolation is one never sees the assumptions that have been made and therefor the headline figure will have error bars on it, or a plus/minus. Without this, the headline figure is meaningless. It is so,etching UK public bodies are very poor at. I'm not saying the figure is right or wrong, just that without some explanation of what assumptions were made and how,wide the error bars might be it is difficult to take such figures seriously. Just because an expert says it is so, doesn't.t make it so.

In reply to kipper12:


Probably +-68Bn, depending on which side of the fence you sit on, you can always run with half a story that is in your favour, that's statistics for you.

In reply to summo:

I think it was "the exact opposite happens" rather than "something else".

Economists exist in order to make fortune tellers look respectable.

In reply to Simon4:

“Economics is the only field in which two people can share a Nobel Prize for saying opposing things.”

Specifically, Myrdal and Hayek shared one.

In reply to Pekkie:

The debt-situation is different for governments that can create the currency that the debt they sell is denominated in - they can ALWAYS pay back debt due with created money.

In reply to Shani:


Wow! I've learned something tonight. You can just borrow as much as you want and not give a fxck about paying it back. Shani, you're a genius!

In reply to Pekkie:

The number of 59 billion is an estimate arrived at by experts. Those experts will have made a number of assumptions, and no doubt will have some idea of the error bars on the 59 billion figure. What we need to,know, to,be able to put the number into,context is some idea of the assumptions. Just because an expert says its so, doesn't make it so. Economists have spectacularly dropped the ball on any number of occasions over the last few decades. I'm not disputing the figure, just caution against taking it at face value.

In reply to Shani:


Is that the Mugabe or the Weimar theory of economics?

Can I sell you a perpetual motion machine? Or maybe a very nice bridge.

In reply to kipper12:

They're called the 'Office of budget resposobilty'. It's their job to guess the future. The future. It hasn't happened yet.

In reply to Pekkie:


A facile response illustrative of your ignorance - no one said anything about "not giving a f*ck about paying it back". You'll have to take it upon yourself to learn macroeconomics because I've no time to teach a tw*t.

Of course there are consequences to printing money but your starter for 10 is to find out how much money we've printed through QE and then reflect upon what effect that has had on our interest rates and bonds......

In reply to Simon4:

As above, look at how much money we've printed through QE and then reflect upon what effect that has had on our interest rates and bonds. Comparison with Weimar or Mugabe is simplistic.

And again, talk of government debt at 90% of GDP this week seemed to cause our Chancellor and the markets little concern. Why do you think that is?

In reply to Shani:


How to reply? Gesundheit?

In reply to Pekkie:

I've got a vague memory from a few years back, something happened in the world of high finance, and we ended up borrowing a load of cash to lend to Ireland at a higher interest rate than UK borrowed it for, net profit for UK.
The whole world's in debt to each other.
If the UK national debt goes to £3T and my onions cost me an extra 2p/kilo, I really don't care. It's all bollocks.

In reply to Pekkie:


No. About £1000 if you assume a population of 59 million.

In reply to Ridge:


I thought that.... but are these English Billions (a million million) or American Billions (a thousand million)?

In reply to KevinD:

So the Torygraph (or, Brexit Daily) is incredulous that the OBR has been wrong on 4 occasions !!!!!!!!:

http://www.telegraph.co.uk/business/2016/11/24/four-times-obr-has-wrong/

Well, except that twice it marginally overestimated something, and twice it underestimated something.




Sack them all. No,that's not enough. Bring back the stocks......

In reply to Pekkie:


worked for Iceland.

In reply to Pekkie:


This appears to be a misapprehension. As I understand it, the £59bn is a hard Brexit-related estimate. If we remain in the single market the economic cost of Brexit is expected to be minimised, not quite zero but relatively insignificant. All we would be paying is a membership fee not a million miles from the previous one. And we could all breathe again.

It's important not to take these numbers out of context.

In reply to Shani:

So your approach is to borrow until the markets notice?That tends to end badly. 90% is a large amount of debt and interest rates can only go up from here while our GDP is unlikely to rise very fast (not least because we aim to ban any immigration). Given this, I would say aimng to reduce the burden now is a good thing. Discussion about the speed this happens is reasonable but pretending there isn't a problem is nonsense.

In reply to balmybaldwin:

I think the 'British billion' fell into disuse many years ago. (Damned foreigners...)

In reply to DancingOnRock:

No one who would be any good. as anyone who would be wouldnt of want to leave in the first place as they would know what a stupid choice it was!

In reply to MG:

Nope. You yourself might be eligible to borrow much more than you have done. You probably have not borrowed to dangerous levels.

"That tends to end badly. 90% is a large amount of debt and interest rates can only go up from here while our GDP is unlikely to rise very fast (not least because we aim to ban any immigration). "

Interest rates will go up. People have been saying this for years.....but pressures continue to be deflationary as the problem is demand-side.


"Given this, I would say aimng to reduce the burden now is a good thing."

Lots of people have been saying this whilst we've printed money via QE and pissed away an opportunity. The markets have been largely unphased. Your Osbornist approach can and has killed opportunity for growth.


" Discussion about the speed this happens is reasonable but pretending there isn't a problem is nonsense."

No one pretends there is no problem.

In reply to Shani:

(brief spelling pedantry interlude coming up)

Unfazed

(normal service can be resumed. ..)

In reply to no_more_scotch_eggs:

My bad. My inner Brian May coming out.

In reply to Shani:

Good scrabble word, unfazed- get that on a triple word score, all seven letters used- game over. ...

In reply to Shani:


What a thoroughly unpleasant person.

https://en.wikipedia.org/wiki/Internet_troll

In reply to Shani:

How much annual interest do we pay on the national debt?

In reply to neilh:
According to Wiki, by 2015 Q1 "around £43bn (which is roughly 3% of GDP or 8% of UK government tax income)"

In reply to Shani:

In a nutshell there is the answer.

In round numbers 8 per cent of the taxes you pay go to interest payments instead of the NHS, social services, education etc etc .

And you want us to increase our debt?

That means less to the NHS etc.

I accept it can be more complicated with multipliers etc. But sometimes it is just best to step back and keep things very simple

In reply to neilh:


The fact that (a) this is complicated, and (b) it is easier to view things "very simply" is why the public tend not to "get" macroeconomic arguments (which is probably why Shani expresses some frustration above at the thought of explaining them).

One of the main points is that there might be a cost to not spending the money - i.e. if by refusing to borrow (for the sorts of reasons which you state above, which do seem to be compelling on the face of it) you actually end up with a worse performing economy, which both (a) increases costs (e.g. welfare becomes more necessary to support those doing well) and (b) reduces the overall tax take because the economy shrinks. This is why macroeconomists (people who have studied the effects of this type of spending) argue for more expenditure when the economy isn't doing as well as it could and when the cost of borrowing is low, because the positive effects of that borrowing and spending would usually outweigh the cost of the borrowing.

A better analogy than the "household expenses" one might be to look at a business - if sales are declining, that business may well be better off spending on an advertising drive etc. to increase sales (even if that means borrowing money) to keep up the level of business needed to thrive. So it might not be better to keep things simple, if that means you ignore the overall picture.

Of course, it also matters what the money is then spent on - some things will give a better return on expenditure, and the timescales in which you might get a return will also differ.

In reply to neilh:

I understand your concern but there are a few things to consider. We all borrow huge amounts for things like mortgages. What matters is what you invest in.

Furthermore "approximately a third of this debt is owned by the British government due to the Bank of England's quantitative easing programme, so approximately 1/3 of the cost of servicing the debt is paid by the government to itself."

The third thing I'd look at is the bond market and interest rates. Investors STILL want to invest in the UK despite your worry about our debt. Investors are currently nonplussed by it.

In reply to andyfallsoff:

That and Pekkie's stupid, emotive, illogical, strawman retort about borrowing and "not giving a f*ck about paying it back".

In reply to Shani:

Investment is the key word. Borrowing per se is not a solution. In the Brown years borrowing-led spending did not meet that test, certainly not in the way most businesses would understand it. And there, perhaps, you see why the arrival of austerity under the coalition was met with a (to some, counter-intuitive) turnaround in business confidence and investment, which contributed to one of the better (if still moderate) recoveries among western enonomies.

Has the time come for a shift in policy? Quite possibly. Are HS2 and runway 3 already signs thereof? Probably.

In reply to BnB:


We are in absolute agreement here.

I'd argue that QE as implemented WAS 'borrowing per se'. We should have used the money to invest in large scale 'green' infrastructure that would benefit this and future generations.

In reply to shani:

That's all true; but from what I've seen, the transfer from markets having confidence in an economy, to losing confidence in it, is neither gradual or predictable in its timing or circumstances. When confidence starts to go, all sorts of feedback mechanisms seem to kick in and things go from 'getting by' to 'full blown crisis' very rapidly. So its good investors are currently nonplussed; but as to predicting their reaction if something unexpected and negative comes along, I don't think we can say, and that is a concern.

In reply to andyfallsoff:

I know all this and nowhere did I mention that we should draw comparisons with household or personal debt.

I remember reading an article once by vince cable, who was horrified at the debt and interest payments for uk as it curtailed the ability of any govt to do things.

If the uk debt was half its current level, would the govt( of whichever political party) have more capability to spend on the NHS, infrastructure projects etc etc. The answer is a straight yes.

We always of course must remember that economists have different views.

In reply to BnB:

The vast sums spent on the NHS without productivity improvements is a case to consider.

In reply to neilh:


I find this very worrying. We need to know that more money = better outcomes

In reply to neilh:


OK, my apologies - didn't mean to tell you something you already know. If you know all this though, I don't understand why you would say "we should just keep it very simple", if you accept it isn't... unless you want to knowingly ignore the effects of what you're proposing?



Yes, it would, by the amount said above. But the option to magically get rid of existing debt isn't there; so it's a bit of a straw man argument to say that. The question is not "wouldn't we prefer not to have any debt", but "does taking on more borrowing now hurt or help us on balance".


Up to a point that's true, but I think the points I make above are considered mainstream.

In reply to andyfallsoff:


Could you please not be so condescending to the poor uneducated public. I am not an economist - are you? I read the Financial Times and The Economist and have picked up some basic concepts. The OBR - an independent organisation with well qualified and experienced economists - calculates that the cost of brexit could (note the word 'could') mean that we have to borrow an extra £59 billion. Obviously that has got to be paid back in annual interest repayments. Borrowing is not a bad thing if it used to pay for infrastructure but is borrowing to pay for something that wasn't needed and could well be wasted if we end up staying in the EU in some form after everything that has happened (eg if we pay in to remain in the single market but with no say in setting the rules) - is that a good thing? The extra borrowing would be needed because of lower trade flows, lower investment and lower net inward migration and hence lower GDP and tax income. To sum up: we get poorer.

In reply to sammy5000:


I don't think it's helpful to dismiss it as a stupid choice.

The stupid part was the endless debates that didn't actually produce any facts.

Basically because there were very few facts people voted on gut feel.

That's not necessarily a bad thing.

What was and is bad is the lack of guidance coming from the people in power. It's been handled very badly. Even if they haven't a clue what they're doing they should at least be offering strong leadership.

In reply to Pekkie:

No we don't. GDP grows less than it would otherwise have done, and that is on the basis of fairly negative assumptions about the deal that is reached. Analyses of the impact of brexit on GDP growth to 2030 range between about +10% to -10%. The central range is probably something like between 1 and 3% lower than it would have otherwise been. Depending on the analysis, a lot of that underperformance is loaded into the early years which would imply that in the longer term the impact becomes smaller. Either way, we still get richer.

Were the impact actually between 1-3% over 15 years it is not remotely the armagedon that some portray it as. Frankly there are many many other things that could impact GDP growth to that extent over 14 years.

In reply to Postmanpat:

To sum up: There are many ways in which the UK could be fooked as badly as by pursuing Brexit. Presumably the powers that be are trying hard to avoid all of the others. Remind me again why we're so keen to get fooked by this one?

In reply to john arran:

No, to sum up, there may be a short to medium term negative economic negative but the central range implies it will not be very big one, and there may be a positive impact.

In reply to Postmanpat:


That isn't a fair description of the economic analyses that have been done. The vast majority don't show a positive impact in the short or long term, what differs is how bad they estimate it will be (with a very few coming to the conclusion there may be some positive effect). To claim (as you do) that it is more or less a balanced picture ("from +10% to -10%") is wrong.

In reply to Pekkie:

Sorry - I genuinely did not mean to be condescending. I was commenting on a particular comment (quoted in my reply) that sometimes it is better to look at things from a simple perspective. My point being, that when it comes to the macroeconomic position, that's rarely true. I don't think it is condescending to point that out, but I do think this is an area where the general public tend to have relatively little understanding (and this is likely to be influenced considerably by how this tends to be reported in the press).

I agree fully with your comments that £59bn on Brexit isn't a good thing and that it is a real cost!

In reply to andyfallsoff:

You're right, I imagine, that knowledge of economics is generally poor. However, it's predictive capacity is also poor and learning lots of details of something that is ineffective seems like a waste of time. Given this, simple approaches make sense. Whatever the differences between personal and national debt, having too much is a bad thing.

In reply to andyfallsoff:


AAAGGGHHHH. Jesus.Read what I wrote.
I outlined the range, that does not imply they are evenly balanced. It says there is a range. In case that isn't clear in itself you can tell because I said that the central range is between 1-3% negative. In case its not clear, the bulk of analyses suggest the impact is negative, but not enormously so, and depending on the outcome of largely unpredictable negotiations.

In reply to Postmanpat:

Even without the ludicrously positive spin you're trying hard to put on it, the "negative economic negative" you're still admitting to will definitely happen and there will be no benefit to justify it. And I rather think that you could better describe it as a "negative economic negative social negative".

In reply to Postmanpat:

The fact the range spans the entire spectrum of economic possibilities says all you need to know about the value of these predictions: they are worthless. Predictions are only helpful if they place restrictions on what is expected to happen. A bit like weather forecasts, looking out of the window is sometimes the best option . What do we see? Massively increasing debt, collapsing currency, being a global political laughing stock, the rise of the authoritarian right.

In reply to john arran:


It was just a mistype. Meant "negative economic impact". Why is it "ludicrously positive spin"? Do you think that minus 1-3% is not the central range or do you think that is very negative?

In reply to MG:

You really have lost the plot. "massively increasing debt" would be a function of the more negative forecasts being correct, and you have just said that forecasts are worthless. The most recent deficit number came in below forecasts. The falling pound has many positives and is predicated on the same negative forecasts, which you think are worthless, being correct.

Brexit didn't cause the rise of the authoritarian right. It is a symptom of some of the frustrations which have given rise to this elsewhere. We'll see who's laughing in a few decades time.

In reply to MG:

But there are different kinds of debt and different risks (depending on the denomination of debt and who has control of that denomination). That's one of the reasons why the experience of southern Europe is so different to that of the UK. In summary we are also disagreeing on WHAT constitutes too much and you have to look at where that money is going.

In reply to MG:

It depends how you've arrived at the forecast. When you make the forecast it's always best to explain what assumptions you have made.

Even with the weather we get a "we're expecting this depression to increase bring more winds from the north and temperatures will drop." Of course if the depression doesn't increase then the winds won't increase and the temperature won't drop.

The alternative "it's going to be cold overnight" is actually worthless and unfortunately if that's all the listener hears they start to believe the weather forecast is worthless. They could always keep themselves up to date with hourly checks to see what the depression is doing...

In reply to Postmanpat:



No, it's part of it.


Will we? According to your profile, you'll likely be dead
I might be too. That's if there isn't a war first. Dreaming about future milk and honey needs tempering by realistic aims.

In reply to DancingOnRock:

I wasn't having a go at weather forecasts, which are pretty good really. However if they said: tomorrow will be between -4c and 25c, people wouldn't be impressed. Somehow bythat sort of statement with economics is taken seriously.

In reply to MG:


I do agree the capacity of economics to be exactly correct in its predictions for the whole economy is limited (given just how difficult a task it is). But its ability to analyse the effects of doing one thing as opposed to another (rather than to model all of the possible effects and come up with a compound outcome that reflects everything) is actually quite good.

My concern is that by boiling it down to a message that "too much debt is bad", you miss all of the nuances that allow us to make a sensible decision about what to do, which should take into account debt but weigh up the pros and cons of what can be achieved by borrowing. I am probably arguing against this more forcefully than I would have been, had we not just had 6 years of economically illiterate austerity, which hasn't even achieved its own stated goals, and it has all been justified by the same over-simplification about public debt.

In reply to Postmanpat:

I have no idea whether your 'central range' might be accurate or not; I'm not an economist. I do see very significant impacts already though and we haven't even pulled the trigger yet, so I suspect phrasing anything in terms of such very small percentages may not be communicating the effect as perceived by most people in that it seems certain to impact most people's lives and prosperity far more than just a few percentage points would suggest.

In reply to john arran:


But that's my point. There is hysteria being generated about the impact, reflected by the doomongers on UKC, which is not a reflection of the likely economic impact according to the "central range" of estimates. Understandably, the media focuses on the more negative end of the spectrum of analyses. What you are doing is saying,"Brexit is bad because it will hurt the economy. Well I don't know if it will actually hurt the eonomy but everyone is panicking that it might so it must be bad".

In reply to Postmanpat:


Apologies. I meant to say that we would be poorer than we otherwise would have been, rather than poorer in real terms. Still not a good prognosis though.

In reply to Postmanpat:


No, what I'm saying is "Brexit is bad and it will hurt the economy." I see it already having a noticeable effect and it hasn't even been triggered so it's pretty hard to believe its effect will be close to negligible, as you seem to be doing your best to portray, for christ knows what reason.

In reply to neilh:


Good news; we where highly productive and efficient on the kids ward yesterday. No mindless banter just loads of graft. Plenty of sick kids and their stressed out parents cared for. Some even went home.

In reply to Postmanpat:


But the OBR is an independent organisation with competent and qualified personnel whose job it is to warn of possible bad economic news so that the government can plan ahead. From what I can see they have taken the central range of estimates and come up with an estimate of £59 billion extra borrowing as a result of brexit. Their stance is commonsensical and the opposite of panic-stricken and hysterical.

In reply to Pekkie:

I think you'll find they are experts and therefore to be ignored.

In reply to john arran:


In the quarter since the referendum GDP has come in above estimates, consumption has come in above estimates, business investment has held up and unemployment has fallen. Aside from the fall in sterling the impact has been minimal so far. (which is not to say what will happen next year).

I'm simply telling you what the various analyses show. You seem to think that they justify panic but have given no explanation to why. Either you think that my description of the range is wrong, or the conomists are wrong or you think that 3% over 14 years is cause for panic. You tell me. The reason I am doing this is because the analyses don't appear to me to justify panic.

In reply to Pekkie:


And other "independent" organisations with competent and qualified personal like the CBI, Institute of Directors and Open Europe come up with different analyses.

From the FT (which is agressively pro remain):

"But while this all sounds very impressive, we should treat the OBR’s crystal ball-gazing with a healthy dose of scepticism. Forecasts, even a year ahead, indicate little more than the general direction of travel, and five years out they are basically fiction. The OBR effectively acknowledges this by publishing growth “fan charts” which represent outcomes with varying probabilities based on past official forecasting errors.

While its central growth forecast is 1.4 per cent for 2017, the fan chart suggests that growth could be between roughly zero and roughly 3 per cent. So perhaps we should not worry too much about the OBR’s November downgrades and the forecast of Brexit’s £59bn “impact” on the public finances after all. They are almost certainly overly pessimistic. And while higher prices could slow consumer spending, the lower pound and lower interest rates will boost the economy. Growth should continue much as it would have done if there had been no Brexit vote at all.

In reply to Removed UserDeleted bagger:

people in the NHS get really wound up about the phrase productivity because they see it as a personal attack on their capabilities . It's more to do with reconfiguring the services to provide better healthcare. For example the tie up between the NHS and social services should have been done then, not now. The drive to create more primary care which is more efficient should have been done then not now. The opportunity to do those things when money was available was wasted.

In reply to andyfallsoff:

And some would argue that Austerity, for all its social cost, which I'm not disputing, has provided businesses with the confidence to invest (in capital and jobs), which in turn accounts for the unexpectedly high levels of employment throughout the worst recession in living memory, and the UK's superior growth measured against, say, anti-Austerity France (whose pretenders for presidency are both now preaching Austerity!!). You can't point the finger at zero hours working for this interesting outcome. It accounts for about 1% of all employment and existed in some measure before the crash. Like you say, nothing is simple, and it might be sensible to assume the same rsks are attached to tossing expressions like "economically illerate" about. Austerity worked in good ways as well as bad.

In reply to Postmanpat:


Your parentheses tell the real story. We're all 15% worse off overnight compared to almost the entire rest of the world and there is no way this isn't going to become very apparent indeed next year in terms of rising prices. You may have found a way to express the loss as a few percentage points of something or other so it sounds quite trivial but my expectation is that a whole lot of people will not be quite so accommodating of the squeeze on their expendable income come next year.

In reply to Postmanpat:



If anything happens to tank our economy no matter how weak the link it will be blamed on brexit.
Conversely if the economy does well it will be A because we were lucky and B it would have been far better had we stayed in the EU.

In reply to john arran:


This is an interesting paradox. There's no question that around the world you'll find many economies that would benefit from a devaluation (Greece, anyone?) and most economists welcome the drop in sterling. But I agree that it seems inevitable that imported goods will become more expensive. To some degree there will be perfectly serviceable UK sourced alternatives that will provide a boost to UK industry without increasing consumer spending, at the expense of choice. For cars choose JLR, Ford or Vauxhall (can I include Nissan?). For household goods buy Hotpoint or Dyson etc. But some goods just aren't made here any more.

More pertinently, don't be so certain that the drop in GBP is permanent. It's already bounced somewhat and, with the price factoring in a hard Brexit that looks less likely than it did a month ago, any risk is currently on the upside as they say.

In reply to john arran:
>
I think the BOE forecast for inflation next year is about 2.7%. Given that the BOE has spent the past five years trying to get it UP to 2% this hardly provides cause for harikiri, particularly since this will be mainly a one off move after which it is forecast to fall back a little.

If you think that describing the actual forecasts is trivialising the outlook then so be it.

More to the point, it is ridiculous to judge brexit on a one year, five year or even ten year (let alone a quarterly!) basis. This is a multi decade decision and should be viewed accordingly.

In reply to Pekkie:

Yes I know we'll all pay but I'd rather Brexiters paid!

In reply to Postmanpat:

Do you suppose the BoE predictions are based on an isolationist hard Brexit, a pointless soft Brexit, or the tantalising prospect of a rethink? Do they know something Mayhem hasn't told us?


At least we agree on something!

In reply to john arran:


Since they are for 2017-9 I assume they are based on the mayhem of the negotiations ahead of brexit.......

In reply to BnB:

Your point shows preciisely why GDP growth is such a terrible, outdated and irrelevant metric. You make the UK sound like its done well since 2007 but if you look at a different metric, such as real terms wage growth (or decline...), the UK is performing terribly. Therefore, all that extra "economic activity" is not actually filtering down to the general populace.

https://www.theguardian.com/money/2016/jul/27/uk-joins-greece-at-bottom-of-...


So yes, that's irrefutable. Who it worked for though, and who it punishes, are more of a concern...

In reply to neilh:


Didn't think it was an attack on anyone's capabilities. My Trust has been on the highest level of alert for weeks. Only tomorrow do the reporting of winter pressures begins. Everyday there are 60 plus people in the hospital who are fit for discharge but there is nowhere for them to go.

In reply to Alasdair Fulton:


>
But the UK also has one of the lowest unemployment rates and highest labour participation rates in the OECD.
Household incomes bottomed pretty quickly (Q3 2009) and have since gradually recovered whilst avoiding high levels f unemployment (unlike France...ir Greece) and that is the benefit of having flexible labour markets.

In reply to john arran:


I suspect they are based on a combination of 2 things.
Cause as much fear and uncertainty as possible in the hope that people will panic and the nation calls for a second referendum.
Also if they underestimate we the people will blame them for not warning us but if they warn us but it never happens we won't care because we are all doing okay than you very much.

It's a bit like the weather, the met office has been caught out a few times so now every drop of rain is a potential flood, a snowflake is the coldest winter since records began and a sunbeam is we are all going to die of heat exhaustion.

In reply to Postmanpat:

I love how Greece is always pulled out the bag to make points, that structurally unsound, corrupt and frankly tiny non entity.

So, on to proper countries - Germany: 4.2 % unemployment, 13.9% Wage Growth
Poland: 5.9 % Unemployment, 23% Wage Growth

and a more middle of the field Netherlands: 5.8 % Unemployment, 2.3% Growth.

Uk. 4.8% Unemployement, -10.4 % wage growth.

We may have a good number of people in work, but are they in *good* work?

In reply to Alasdair Fulton:

Lol: you mean as in the story you linked to and I am replying to headlined "UK joins Greece at bottom of wage growth league"....!!!????

Bloody Granuad, eh!

In reply to Dax H:



What a wonderfully convenient line of reasoning! Saves you having to face up to anything at all until you (and the rest of those in the UK) are well and truly shafted ... as predicted!

In reply to Postmanpat:

Aye, well... that was their headline, not mine!

This was the article I first read but couldn't find for some reason:
http://www.independent.co.uk/news/business/news/uk-wages-drop-10-tuc-greece...

Good chart showing the comparison about halfway down.

In reply to Postmanpat:

'In the quarter since the referendum GDP has come in above estimates, consumption has come in above estimates, business investment has held up and unemployment has fallen'

Personally I'm pro-Brexit, but all of the figures you quote rely on plans and investments made before the referendum. It's possible that retail spending is enjoying a boost based on people's fears of higher prices next year. But it's too early to deduce anything certain yet, and who can say what will happen if the French elect Le Pen next year?

In reply to Pekkie:

Interesting news from France;

In reply to john arran:


Hey I'm not saying we won't get shafted, I just suspect it won't be as bad as predicted.

In reply to John2:


I don't think that's true of consumption, and even for business investment it suggests that there has not been the much feared (prediction) of immediate cancellations. Was it the Treasury that told us that the negativ effect would be immediate?
As for Le Pen, that is really one of my points. There are lots of other things aside from brexit that might have a bigger impact.

In reply to Postmanpat:

There are lots of other things aside from brexit that might have a bigger impact.

How is that possible? Brexit will be blamed ( by some) for everything detrimental that happens in this country for decades to come.

In reply to Jim C:


What things? Things that we can choose, preferably.


And some people will always deny that brexit could cause anything bad.

In reply to Sir Chasm:

That was Postman's comment, I will let him respond . ....

Of course, and neither will be right ( just like the 'experts'

In reply to DancingOnRock:

Bring back Cameron?

In reply to DancingOnRock:


Nonsense. Why should I suddenly support someone in doing something I fundamentally disagree with because a handful of other people who I also mostly disagree with voted for her, or in this case, didn't?
jk

In reply to Postmanpat:

Another way of saying to your kids "yes, we f*cked you over for the foreseeable future, and your opportunities are now restricted to isolated little Britain, but who knows, maybe, just maybe, in a couple of centuries, it'll be alright".

But yes, you're right, better not try to evaluate the wisdom of Brexit for the next ten years, ignorance is bliss, after all.

In reply to RomTheBear2:


Don't worry rommy, you'll be sitting pretty in, er, Cyprus.........

In reply to RomTheBear2:

What happened to RtB Classic?

In reply to MG:


OMG. A reboot. What happened Rom, er, 2?

In reply to BnB:


Maybe he failed his anger management test and had to reapply?

In reply to Postmanpat:

You're talking nonsense!!

The forum would no doubt be a poorer place for the loss of Rom. Bring on the new version, I say.

In reply to BnB:

Somehow managed to lock myself out of my previous account, which is registered to an email address that does not exist anymore...

Edit : I blame brexit

In reply to RomTheBear2:

Welcome back!