OK - will give this new software a try, old timers like me take a while to get used to new things so I’ll see how it goes.
The EU27 and indeed GBP traders are in somewhat of a quandary re the UK election this week.
On the one hand a Tory landslide would strengthen the PM’s hand and she has repeated the mantra that no deal is better than a bad deal (her advisers would have cautioned that a no deal would make life extremely difficult for UK business).
Then would a reduced majority strengthen the Parliment’s hand, causing yet more ongoing uncertainty - it would seem that either scenario could be GBP negative - if ever there was a case for ‘wait and see’ for both the 27 and GBP traders then this is it.
anything that weakens the power of UK parliament or prime minister is GBP positive and FTSE positive and EUR positive and “insert random shorting here”-positive.
simply because anything that “stops” or “disturbs” the “men walking the wrong path” (the cliff) is seen as very positive news.
this world wide relief on the sole fact that the UK leadership is beeing weakened on the path it chosed might should be a warning to UK citizen that their leaders truly are doing things very wrong. but im sure warnings are beeig taken lightly, just like before brexit vote.
long life UKIP… eh no wait… they just imploded didnt they?
continental europe news and politics advice UK to go back to monarchy and abandon democraty. the country was run smarter and more efficient under a totalitarian King. (or queen)
The exit polls were correct, Gbp sellers dominated - as I had outlined Gbp buyers were always going to be on the back foot regardless of the outcome.
Looking ahead, the arrangement with the DUP will be difficult.
Most UK people have little knowledge of these 10 MPs - EU 26 has even less.
The 27th member state, Republic of Ireland, will have already briefed them. The EU27 negotiating stance will remain unchanged. The changed UK political landscape is likely to lead to less harsh words from both sides which is a good thing and could well lead to some GBP buying in the shorter term.
The risk for the buyers lies with the stability of any arrangement that the Tory and DUP parties may agree.
My own knowledge of DUP is reasonably extensive, I would be hesitant on making a trading decision based on the premise of continued support for the next 5 years.
The main opposition party in the UK, the Labour Party, have to date been ambivalent in their stance towards Brexit
Pre the recent election their attitude was of little importance, the focus, indeed the purpose of the election was to increase the majority of the ruling party.
This weekend Labour have signaled a major shift in their policy, unusually Labour would not be associated with Business interest, however their new policy statement is very much in line with Business aspirations.
Just an update - divorce bill still a problem, the 20b offered fits snug with a 2 year transition so is sellable in the UK but not acceptable to the 27.
The changed political set up in UK is recognized in Europe, the difficulties that the PM faces, in particular with some members of cabinet who may well make a play for leadership, in this light the 27 have agreed to talk among themselves on a trade deal.
Good news is that UK media are reporting that this supposed huddle talk is a result of threats yet again of accepting a ‘no deal’ and resorting to WTO trading - job done.
" Citizens who have built their lives on the basis of rights flowing from the British membership of the EU face the prospect of losing those rights." (EU27 guidelines April 2017)
This week I spoke to a UK citizen living in France this past 20 years. Recently tried to renew her mobile phone contract, never a problem before but this time when the UK passport was produced it was “ce n’est pas possible”.
It is always the little people in the middle who suffer, the power players sleep well.
There are aspects of Brexit that go unreported in the UK press, and in the 27.
In my own area Bombardier are under pressure from US, the EU would normally have had an input, but sadly they decided that the UK would have to fight this on their own.
In UK it is a small story - Bombardier vs Boeing - UK PM made a call to US President, but business is business, it’s a mere 4000 jobs.
For UK there is talk about Brexit with no deal and their planning for same, likewise in EU27.
So a hardening of attitudes.
I just wish that the hard guys would step back, there is no such thing as a winner or loser - just business and people’s jobs, their livelihood, what they bring home.
In manufacturing there is a concept, it’s called JIT.
We use it every day, a hard Brexit will take that away.
When we ‘export’ to the EU there is presently zero barrier, no VAT, no special records, just do the business and tell Intrastat at the end of the month, likewise when we ‘import’.
It’s not even recorded as export, it’s merely a ‘dispatch’ - effortless, seamless, minimal red tape - ideal for ‘Just In Time’.
@peterma - As one of those who voted to join the “Common Market” all those years ago, I was annoyed afterwards that we were made to disband the “Commonwealth” - something which never apeared on the “Information” about “Going in” - That is what we joined - we did not join any form of political union.
Yeah I remember the vote you are referring to, but the UK was already a member by then, the public didn’t get to vote on entry to the EC, the 1975 vote was to ‘guage’ continued support and was non-binding.
The thrust of this thread is the EU27 going forward, I was saddened to see the lack of support for Bombardier from that quarter and have highlighted same.
The effect on manufacturing both in UK and EU27 will be most felt in the early days, one aspect is JIT.
TBH most business has zero interest in the reasons and politics etc - more how to protect and profit post Brexit.
One way of doing that is to be aware of the likely difficulties and just like trading then create and implement a plan.
I’m really interested in increase of fiscal spending in UK since their independence will probably require more support to bring key economy sectors dependent on EU back to balance.
After the Brexit vote the sitting FM - G Osborne - was replaced with the current Hammond.
Many guys took the view that T May decided on the basis of personality, not true, Hammond is more like an entrepreneur, the need to spend in order to reap, Osborne was focused on austerity and getting the borrowing down.
Hammond’s approach is proving and will prove to be the correct one, not reckless borrowing but likewise there are times that risk must be embraced - with caution.
This is current and projected borrowing to GDP, it’s high but money is cheap, the borrowing increased as it became cheaper:
Note that the prelim gdp was higher than exp on Wed past, the higher the more room for borrowing.
From EU27 perspective a similar outlook, a corner has been turned in EU28 - this is why it is important that politics plays a back seat, the notion of nationalism or posturing will not put money in peoples homes.
Cool heads and common sense will be win win, the focus must stay with keeping GDP rising.
This week:
I feel there are some tax cuts coming as monetary policy failed to spur economic growth. Still the propensity to consumption is higher, rising wages-inflation gap is temporary and the key goal is to rescue motivation of nation to spend and monetary policy is the least powerful measure.
For the UK the risk lies in consumer spending, you are correct.
For this reason the BOE has played it well thus far, although likely that interest rates will rise soon, maybe less than the expected 0.25%
This rise will not help, in fact it will add to the risk, consumer spending is dictated by many things, often consumer confidence is the most important.
If my wife becomes fearful of the future and I say we need a new car - we don’t get the car, it’s that simple.
In my own business we are seeing a raft of price increases on the wholesale side, all timed for spring of 2018 - tinkering with the interest rate will not stop those.
The one tax rate that would change risk dramatically is so simple yet it would take an act of bravery from the politicians, for this reason I doubt that it will happen, merely can hope.
Time for a break, had hoped to sign off on good news 5 days from now, but not to be.
The ‘discussions’ are in a bad place and going nowhere.
The US have signaled (Wilbur Ross, US commerce secretary) that the UK have to diverge from EU food standards if they wish to do a trade deal - speech to CBI this week.
Secretary Ross questioned the science behind the current EU regulations, an argument not unlike the Environmental discussions of late.
Very likely that the EU27 will now take the view of ‘no deal better than a bad deal’ - they will not move on the food safety and agriculture issue for sure, if UK wants a US deal then bye EU, hello US…
In the short term Nov 16 will likely show a slow down on UK retail spending so don’t go long GBP Thursday morning - maybe wait for the numbers to prove me wrong
