My instinctive take on Brexit (now that it’s happening) …. Rolling updates…

NOTE: Blue 14 June 2017 edit-inserts are the latest…

The Brexit result has been achieved through the anger of many of the British people.

  1. It will be bad for the UK economy in the short-medium term. I have no idea about the long term (but in the long term we are all dead, especially the elderly)
    • JUNE 2017 – JURY NOW IN – UK Economy is tanking while CPI is at 2.9% and RPI at 3.7%. Latest official figures show GDP growth worst of all advanced economies. Incomes now plummeting in real terms
  2. Unfortunately, before the long term it is also likely to facilitate the break-up of the EU and boost the already growing fascist movements across Europe
    • NOW LOOKING LESS LIKELY with success of Macron in France and collapse of UKIP in UK (Phew…)
  3. In the UK this will be because the ‘promise’ of Brexit (control over our laws, regulations and, above all, immigration) will not produce the effects the mass of Brexiters will be expecting: immigrants will still come in as long as and in the numbers our economy needs them, which is what has been happening up to now
    • DOH! (SIGH…) Now we have nearly full employment with labour shortages – skilled and unskilled. NHS in particular trouble filling posts as foreigners less likely to take the risk of coming. Proof we need the immigrants (who are voluntarity not coming now, because of Brexit risk!)
  4. And if the UK economy no longer needs them, or it does need them, but is deliberately starved of immigrants by border controls, that means our economy will be shrinking
    • DOH! (SIGH…) WELL, IT IS CERTAINLY STOPPING GROWING, even if not actually shrinking (but watch this space)
  5. Which means the majority of British people will be poorer and more angry
    • YUP – that’s beginning to happen
  6. Scotland may begin the process of leaving the UK… And Northern Ireland may see a renewed outbreak of civil war as many there will want to join the Republic of Ireland. Those events will add to the messiness of things, to say the least
    • LATEST GENERAL ELECTION SCOTTISH RESULTS MAKE SCOTTISH EXIT FROM UK LESS LIKELY. But Northern Ireland situation is becoming more precarious
  7. Back in England and Wales, the regulations which protected UK workers rights as employees will be dismantled in the name of setting business free of its shackles (which will do bugger-all to help free enterprise boost the economy, but may put extra money into the salaries and bonuses of the most senior managers and owners of SMEs and some large corporations), thus making the poor even more angry
    • JURY STILL OUT But looking less likely as ‘Soft Brexit becomes more likely
  8. UKIP will then morph into a fully-fledged fascist party and more people will vote for it
    • INCOMPETENCE AND LATEST ELECTION WIPE-OUT LOOKS LIKE PUTTING PAID TO THIS PREDITCTION; BUT IT MAY SPLIT, LIKE MOST EXTREMIST PARTIES WITHOUT A VERY STRONG CHARISMATIC LEADER
  9. While similar stuff will be happening happen all over Europe (it is already beginning in France, Holland, Poland, Hungary, Austria)
    • LESS LIKELY NOW (see #2 above…phew)
  10. In the meantime, elsewhere, Trump may well be elected US president
    • YUP THAT DID HAPPEN EVEN THOUGH POTUS AND TEAM ARE PROVING SO INCOMPETENT THEY MAY NOT LAST A FULL TERM
  11. It’ll be the 1930s all over again
    • JURY STILL OUT, BUT LOOKING LESS LIKELY FOR THE MOMENT
  12. Russia may take advantage of the chaos to physically join up with Kaliningrad via either an invasion of Poland or an invasion of Lithuania (probably Lithuania), which might spark a major European war
    • BIT LIKE AN EARTHQUAKE OR VOLCANIC ERUPTION IN THE MAKING, RUSSIA IS DOING EARTH-TREMORS, BUT JURY STILL OUT. HOWEVER, PUTIN’S TROUBLES AT HOME MAKE HIM MORE UNPREDICTABLE
  13. But a Trump-led America could well stay out of that, saying ‘not our problem’
    • STILL MOST LIKELY SCENARIO WITH A BULLY-COWARD IN OFFICE, BUT EVEN WORSE, COULD GO ATOMIC TO ‘BOMB THE SHIT OUT OF THEM’ – (NOW THERE’S A DISTRACTION FROM HEALTHCARE, TAX REFORM AND OTHER INCOMPETENCIES)
  14. Lithuania falls, because an enfeebled NATO has no chance of stopping Russia. But I don’t think this will seem very important in western Europe
    • JURY STILL OUT. SHOULD IT HAPPEN WESTERN HAND-WRINGING IS MOST LIKELY SCENARIO

I think the expression ‘clusterfuck’ was invented for just such a rolling scenario.

Here was The Economist’s Kal’s take

In the meantime…

  1. What I’d now be very interested to see is the UK’s balance of trade figures broken down by sector and the likely effect on this of a newly persistent GBP£/US$ ratio of 1.4 and GBP£/euro ratio of 1.3. with tariffs imposed as if we were not in the EEA (free trade area).
  2. Also a back of envelope calculation of the likely effect of just these two items on UK domestic inflation and on UK GDP (ignoring ‘confidence’ effects ie all other things being equal, which I’m sure they won’t be… But let’s keep it simple)
    • THIS WAS ME WONDERING WHETHER A DEVALUATION MIGHT NOT BRING SIGNIFICANT SHORT-TERM GAINS TO THE UK ECONOMY WHILE MOST PUNDITS WERE PREDICTING IMMEDIATE DISASTER. IT LOOKS LIKE I WAS RIGHT TO WONDER… BUT. TO JUNE 2017, UK TRADE IS DEFINITELY SUFFERING MORE THAN IT IS BENEFITING FROM CURRENT BREXIT CHAOS

As for 1930s … Trump’s America looks LESS LIKELY NOW TO BE going Authoritarian (Fascist? Racist?). The relationship of Trump’s USA with Putin’s Russia look like becoming very ‘interesting’ indeed. I’m obviously not the only one who thinks so. This from Frances Coppola’ s blog on the likely repercussions of the Trump administration.

She sees a major realignment of powers taking place, with chunks of eastern Europe returning to Russia’s fold and a likelihood of the return of American military action in the Middle East (and elsewhere – China, North Korea), less tentative than recently. With North African and Midddle East oil taken out of ISIS and other radical Islamist control – no accident that an ex-oil boss is now Trump’s Secretary of State – and possible Russian takeover of Iran’s Caspian oilfields.

If it gets any more ‘interesting’ we won’t have to worry so much about jobs and pensions…

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About DMO

Market Research Consultant View all posts by DMO

8 responses to “My instinctive take on Brexit (now that it’s happening) …. Rolling updates…

  • Stanley

    It is more straightforward.

    The EU has not interest in generosity in the negotiations. Eg, on banks and financial services, Frankfurt and Paris will eagerly grab what will have to be exported, in terms of euro markets and bank authorisations. So employment will migrate. Ditto international manufacturers, who located in the UK to gain access to the single market. Investment will fall. Recession. Decreased tax take, increase in benefits. The fictional £350 m a week will disappear. There is a real risk that the UK will fracture. Civil servants will be overwhelmed with the burdens of negotiation and legislating to replace EU regulations. Many will be controversial. It is all bad news.

    • DMO

      Excellently put, superbly and incisively informative.
      You should start your own blog. I recommend you call it ‘It’s more straightforward’.
      But keep it anonymous so it doesn’t create problems for your day job…

  • Howard Jacobs

    First, congratulations on knowing what, where or who is Kaliningrad. Second, what about the down side of Brexit?
    Third, keep calm even if you can’t carry on.
    all best
    Howard

  • Simon Riley

    Agree with all of that except on my home area, N Ireland, it won’t change unionists into non-unionists, our sense of belonging is pretty much invulnerable to anything anyone else does. Current situation is that united Ireland has about 20 per cent support at best, so only about half of even the ‘Irish nationalist’ community and hardly anyone else. Brexit might well push that up to 30 per cent, maybe 35, as nationalists feel more of a reason to be unhappy with status quo. But won’t rise much above that. Quite apart from the many committed unionists, a united Ireland to many apolitical disengaged voters, young people etc who don’t align with either ethnic block, who may vote Alliance, Green, even SDLP, equals the quickest way to a new Troubles. That is still the No1 thing for a lot of people.

    Simon

    Sent from my iPhone

    >

    • DMO

      Mmm – I hope you are right, but I am moderately anxious about a revival of The Troubles. Ars(oles) longa vita brevis. Grudges last generations… I mean, think of the Crusades

  • kevinandmclean

    Agree with your instinctive reaction/prediction – apart from the European war bit (I hope) – but on the other hand it could be worse than you predict in Britain. A thought, Leavers said anything they wanted much now retracted. Dave could pull the same trick (before his defenestration), ‘when I said there will not be a second referendum …’

    • DMO

      Well, I hope there will be a second referendum. It would be (a bit) less socially disruptive than parliament no approving formal notification of our desire to leave…

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