NO DEAL BREXIT - THE THREAT IS STILL AN EMPTY ONE

Years ago, I used to travel around the country with a sales director who drove ridiculously fast and often (several times a trip I'm talking about) got into potentially awkward and what seemed at the time, life threatening situations. And of course, it wasn't the threat to his life or anyone else's for that matter, which worried me, it was my own. This often resulted in me (others did this too, I'm not a particularly nervous driver!) pressing my feet into the bulkhead on the passenger side as if it was an emergency brake.

BOJO - HONESTY, DIVISION AND TRADE

BoJo's latest effort for The Telegraph yesterday (HERE) is once again comically polemical, full of wishful thinking and completely stripped of facts. He doesn't make any reference to the correction the paper was forced to publish last week and simply carries on in his usual fictional style. He defends himself from the charge that he is a 'hard right extreme fascist' alongside men like Steve Bannon. I don't believe he is, but he is a 'useful idiot' in furthering the aims of the hard right although he doesn't seem to realise it.

ECONOMIC FORECASTS - WINNERS AND LOSERS

There are economic forecasts and there are economic forecasts.  David Smith, economics editor of The Sunday Times, produces a league table every year showing the accuracy of the big forecasters compared with the actual outturn.  Their forecasts are made at the start of the year and compared with the actual end of year figures for a number of key criteria.  However, this year's show quite a remarkable and stark comparison.  

THE ECONOMIC ASSESSMENT - Lose 3.9% to gain 0.2%!

The government's economic assessment has been published and you can read all 90 pages of it HERE. It seems to have been written with the idea of deliberate obfuscation in mind and isn't easy to read.  The document points out that future growth depends on a lot of other things, not just EU membership, but there is no disguising the fact that the British economy will be smaller under every possible scenario and all the news outlets carry this message loud and clear, which I hope pushes a few more voters our way.

ECONOMIC FORECASTS TO BE PUBLISHED TODAY

The government is supposed to be releasing today a forecast of the economic impact of Brexit on the UK economy. I don't expect it to be materially different to the figures produced by The Treasury before the referendum (HERE) and in the leaked Cross Whitehall briefing from January this year (HERE). The National Institute for Economic and Social Research released their own research (NIESR) a few days ago which pointed to the economy being £100 billion a year smaller than would have been expected had we remained in the EU. This is actually based on the government's Chequers plan.

EFT AND THE LOW TAX, LOW REGULATION ECONOMY

One of Patrick Minford's mates at Economists for Free Trade (EFT) has a piece on Brexit Central (HERE) calling for the chancellor to send the world a message that we'll thrive outside the EU. Graham Leach says we, "need a vision of a low-tax, low-regulation economy, which will overpower Germany and France as the largest economy in Europe".  This is the holy grail we've been searching for for the last century or more. Bizzarrely though we don't want to "overpower" them in the way they overpowered us, by solid long term investment in cutting edge manufacturing technology, good design, excellent after sales support and so on. No, we want to try to do it by creating a low tax, low regulation economy.

OPEN EUROPE 'RESEARCH'

Henry Newman is a director of the pro Brexit lobby group known as Open Europe. He has a piece on the Politico website (HERE) doing a heroic job of water muddying and bravado by suggesting unless the EU backs down the UK could (and should) leave with no deal. He claims a new report by him and his colleagues, due out today, will show there is only a very marginal impact on our GDP of about 2.2% by 2030. Even this could be mitigated they will claim, by a unilateral reduction in tariffs that would then see only a 0.5% reduction in our GDP by 2030.

UK'S "WORRYINGLY" WEAK PUBLIC FINANCES

The IMF have released the results of an analysis of the wealth (HERE) of 31 countries and it shows we have the 30th weakest public finances, only Portugal ranking lower. Amazingly, Gambia and Uganda have stronger public finances than we do. The IMF calculated the net worth of these countries, based on the assets the governments have at hand versus their long-term liabilities. Assets include the likes of land, utilities and commodity resources, with liabilities ranging from debt issuance to public sector pensions.

THE BCC SAY ECONOMY IS "STUCK IN A RUT"

The BBC are reporting (HERE) the results of the Quarterly Economic Survey of the British Chambers of Commerce. This is the trade body representing 52 affiliated chambers of commerce with 75,000 members across the UK. Their surveys matter. It does not make happy reading. The key findings are : that the percentage of services firms attempting to recruit is at its lowest level for 25 years: Of those services firms recruiting, difficulties rose to a record high: Exports sales and orders are at their lowest level since the EU Referendum in Q2 2016.

PLAYING CHICKEN WITH THE ECONOMY

There is a warning to the government not to play "chicken" with the British economy (HERE). It comes from Catherine McGuinness, policy chairwoman at the City of London Corporation, but I'm afraid it's far too late. The Conservative party is essentially doing just that. The no deal threat is far more serious for the UK yet Brexiteers persist in using it to put pressure on the EU, daring them to blink first. We know they are not going to blink and it is just making business very nervous, like passengers in a car being driven erratically at high speed by a driver you suspect is not completely rational.

UNEMPLOYMENT - ONE OF BREXIT'S MANY ACHILLES HEELS

I have said before that Brexit could not have come at a worse time - for Brexiteers. The up to date unemployment figures for September were published last week HERE. They show the rate down to 4.0% or 1.36 million. These are excellent figures. When the referendum was held the rate was 4.9% and most forecasters expected the numbers to rise, but they haven't. However, we are now reaching what used to be called full employment - the irreducible rock bottom level which really just includes the people who are between jobs. It's hard to see it going much lower. And this is the problem for Brexiteers isn't it?

CLOUDS ON THE ECONOMIC HORIZON

There was a story in The Telegraph yesterday that might presage real problems for the UK economy (HERE). It's about the selling off of government bonds by foreign investors.  Apparently, a net £17.2 billion of UK government bonds, known as gilts, were sold in July, the biggest monthly outflow on the Bank of England’s records which date back to 1982.

HAMMOND'S REVENGE

The Chancellor has announced the Cross Whitehall Briefing (CWB) prepared in January 2018 is undergoing some "refinement" ready for the meaningful vote to take place in the House of Commons later this year - or next. The CWB is the secret briefing with various economic forecasts (HERE - page 16).  The original April 2016 forecast by the Treasury (HERE - page 7) was that GDP, in the event of moving to WTO rules, would suffer a drop of 7.5% after 15 years. By January this year in the CWB, it was 7.7% by 2033-4, so very close if not identical. Obviously, nothing had changed the Treasury view in eighteen months.

THE ECONOMY - STILL BETTER THAN WE THOUGHT

Something very strange is happening to the economy. We are limping along, not quite at the bottom of the G7 growth table as we were but still not good. Yet, unemployment has hit a new record low of 4%. We should accept this is a problem for those of us who thought Brexit would start to appear in the economic statistics in a far more prominent way and well before now. But, somehow we are still growing and this allows Brexiteers like Ross Clark to write an I told you so piece like this (HERE).

THE ECONOMY

As we approach the second anniversary of the EU referendum, the economy looks like it's finally beginning to see the impact of Brexit. It has been slowing for some time going from the top of the G7 growth league to the bottom and there was hope for a "bounce" after an even slower start to 2018. However, it doesn't seem as if that's going to happen.

DEATH BY A THOUSAND CUTS

One wonders how long we can go on limping towards the exit without the economy taking a serious southward turn. East European fruit pickers are said to be "shunning" the UK (HERE) while the other day Lloyds of London announced the moving of staff to Brussels (HERE) and  Japanese bank Nomura (HERE) said they have been granted a trading license by the authorities in Frankfurt. This week we learned the Dutch government were advising their companies to avoid using British parts in goods for export since after Brexit they will no longer be considered local content (HERE). 

FDI CHICKENS ARE COMING HOME

Almost exactly a year ago on 27th April 2017, The Telegraph (HERE) hailed a big increase in Foreign Direct Investment (FDI) into the UK when the OECD published the latest figures. It was apparently a sign of confidence in the UK economy. The total was an impressive £197 billion. The piece reminded readers of the concerns expressed by the remain campaign that FDI would be impacted by the referendum result.

THE ECONOMY SLOWS

The economy grew by just 0.1% in the last quarter (HERE), about a sixth of the speed we were managing before the referendum and the weakest growth for five years. In 2016 we were at the top of the G7 growth league, now we're at the bottom - in spite of the European and world economies both being in far better shape that they were two years ago.

THE ECONOMY SUFFERING

The economy continues to perform badly. The BCC have issued a warning that the economy is treading water and has been since the start of the year (HERE). Meanwhile there is concern about the car industry with a lengthy report (HERE) on the BBC website. It is rather sobering and should concern Brexiteers as well, but it probably won't because they either won't read it or won't believe it.

THE ECONOMY

The economy is starting to be affected by Brexit, according to this report (HERE) by the Chartered Institute of Procurement and Supply (CIPS). About 11% of manufacturers say they have already lost contracts, 58% are planning price increases and over a fifth are planning job cuts to offset the costs of Brexit.