UKH

Chris Grey has been a useful guide to what's happening around Brexit. Here is his view of how the next year or so will pan out in the light of yesterday's election results:

https://chrisgreybrexitblog.blogspot.com

Pretty dismal reading...

Interesting, my opinion for what it’s worth;

The dystopian paragraphs at the end are highly speculative.

The basic point about regulatory divergence and the effect that might have on trade deal negotiations with the EU next year is crucial. The much publicised trade deal with the US will be a cause of tension for precisely this reason.

The forces within the Conservative party that have brought us here are still active and empowered. Some of the authors of Britannia Unchained are in cabinet. 

Hmmm, had me until:

“But the civil service will be in meltdown after years of having been asked to deliver an undeliverable policy. Many EU nationals will have left, along with many of those UK nationals with the skills and mobility to do so.  There will be (at very best) a stagnant economy, with a decliningfiscal position and major labour shortages, especially in the NHSand social care.”

Yep sounds about right, already witnessing that.

I've got a collectable copy of that, signed by all the authors. Only slightly marred by the fact that Liz Truss spelled her name wrong. 

These forecasts usually are wrong. It will be a middle of the road outcome broadly in line with what happens in other developed economies. Some things will be good and somethings will be bad  

One thing that may encourage people to stay in the UK is the £ which has as you know increased in value. The low £ did financially hit alot of Europeans over here.

Unfortunately it’s more a description of the current state of affairs than a forecast at this point. EU net migration has already massively dropped and that’s even before end of FoM. I think it’s reasonable to expect it will go to near zero or negative by EoY 2020.

It’s massive problem for me recruitment wise. I wanted to hire in Edinburgh, but instead it’s going to be in Krakow, and the main reason really is talent availability. 

Mostly for those who are here temporarily to make a buck, especially is the so called “low skills” jobs, but it’s actually a minority. Beside the £ hasn’t really recovered that much compared to 2015.

The talent issue is a global one and is not a particular UK issue like a lot  of these things. 

Uk population is still expected to hit 75milion anyway. 

Structural problems in the EU still mean the Uk is an attractive place( youth unemployment etc).

it will not be easy either way  

Well in my sector it’s definitely become more acute in the UK.

Well no it’s not attractive at all of you have less rights, need to pay extortionate sums for visa, need a employer able to sponsor you, etc etc. These are very high barriers to overcome. 
Personally at 18 year old with no money I would certainly never have have been able to go and stay the U.K. if the current requirements for non-EU had applied to me. Not in a million years.

I guess that a lot of this depends on what sort of Cabinet Boris chooses, he possibly has a big enough majority to face down some of ERG demands/lunacy, plus he has to keep happy all those Labour voters who switched to the Tories if he wants to keep their votes next time.

People love to focus on the worse possible outcomes though personally I'm not too hopeful about the future, I'm quite worried about the future and a much more right wing government and an increase in a form of toxic nationalism.  Don't trust Boris at all but hopefully he'll prove me wrong..

Hmm... we can hope, but I'm not optimistic. I am really concerned about the bits in the Tory manifesto where they talk of changes around electoral practice like voter ID. They're trying to lock in Tory government for a generation. 

Momentum will probably see to that anyway... 

Sounds pretty spot on. Was saying much the same over a heated family brexit argument on sunday.

It will be difficult to sort the NHS out quickly due to lack of people to fill the positions. Training nurses and doctors takes time.  It will be even more difficult to sort out the Labour to Tory northern constituencies economically, realistically something that may take 10 - 20 years and would probably require more Keynsian economics than the Tories could stomach. Leaving the UK might have a feel good factor for leavers of 1 or 2 years. All of this will cause a lot of resentment; I worry who will be the next scapegoat and what politics it will lead to. 

My other prediction is Johnson won't make 5 years as PM

https://www.prospectmagazine.co.uk/politics/ivan-rogers-on-brexit-the-worst... 

another depressing article

Oh come on! That was a minor upward bounce in the value, based on hopes for a sensible (i.e., softer) Brexit. That's already been wiped out by Johnson now trying to make a hard Brexit more likely. In any case, the small increase in value of the pound immediately after the election was pretty insignificant compared with the fall from 1.55 dollars to the pound before Cameron started his nonsense.

So much for one-Britain Conservatism!

ps. Don't hold your breath either for big investments in northern England, nor in increased expenditure for the military.

pps. Many people are going to be very disillusioned by Boris.

That's what some of the tory inclined pro Europeans said (you included IIRC?) during the referendum aftermath, that it would all go with a whimper and we'd inevitably settle for the Norwegian option. Forgive me my scepticism because it's not looking likely.

It bounced to the post-brexit crash value then slumped again on the latest news Johnson's balls are still in the ERG's vise, no-deal has simply been delayed.

jk

I think growth in military spending is on the cards. It'll partially compensate for industrial decline resulting from brexit and decades of neglect. Redeployment to Ireland looks increasingly likely plus at some point in the run up to 2025 they're likely going to need a foreign war to distract from the disaster they've caused domestically.

jk

Surely his new intake are as likely to join the ERG as oppose them. He doesn't face the electorate again for five years and when he does there'll be a new scapegoat, his investors will be sat across the desk from him and on the phones already. He owes them both but he can only afford to betray one group.

jk

I follow currency at least twice a day. The headline news today about a wipeout is just headline news, its a minor tweek.

Big investment take 10/15 years plus . Anybody on either side who expects in 5 years time for us to have a new Manchester Leeds railway up and running is delusional. But according to Armitt in the National Infrastructure Plan ( yes there is one in case you did not know it) there are some projects which could have been completed to tick the boxes.

I am sure there will be some disillusioned people on a unicorn project.

Well so far there has not been another collapse in the £, far from it. Much to my disappointment.

Your probably right, I was just trying to keep a glimmer of hope alive.

The ERG are pretty hard core though and a lot of the new MP are younger and come from non-traditional conservative seats and have to keep their voters happy.  Again trying to keep some hope alive.

No but nor has there been the meaningful recovery required to attract workers back.

Also for those of us who only just make do, and there are a lot of us, that collapse in the value of the pound you're hoping for means much harder lives. Worth remembering.

jk

Then you will know that the "wipeout" today is a reversal of the upward spike immediately after the election, which could also have be described as "just headline news".

Currency fluctuations in the news like wipeout or surge are usually irrelevant. But it is clear-at the moment there is an upward trend. Predictions are $1.45 to the £. Reality is who knows.

I'd say it is relative. To the euro the pound will likely strengthen, there is no good trade news coming out of the eu for the foreseeable future. The dollar, still rumours of an end to Chinese sanctions, which if not too late might avert some level of recession and a strengthening dollar. But i wouldn't bet a penny on any of it, change is only one presidential tweet away these days! The days of some markets being driven by 7am RNSs seems to have passed. 

Isn't it? It seems highly likely that Johnson and co. do not have a clue about what's coming. 

It's all relative, they probably have more idea than Corbyn and Co. He can't even see that his time as leader is up, never mind what's happening at a UK, Europe or global level. 

Some of them do!

jk

Given the mandate that the Brexiteers asked for has been given to them and nothing now stands in their way.....I am looking forward to a bumper year of progress and good news as they promised, examples to include:

- The roughly weekly announcement of another trade deal being signed - 40 to replicate covering 70 countries all to be achieved in the next 52 weeks

- £350m of additional funds for the NHS per week from w/c 3rd February - hopefully someone has a plan how to spend this, if not guess it can be stored safely in a high interest savings account until they do

- All economic KPIs improving as a result of 'unleashing the potential of the country'

Where did you see that? I saw one from july 19 predicting $1.48 and €1.25 in 24 months time, but sentimnt then was against the dollar as a result of trading issues with china.

Here's an opposing view from earlier today;

https://www.poundsterlinglive.com/gbp-live-today/12550-pound-sterling-retre...

It was in a forecast currency update from Natwest from memory .I do treat them with a pinch salt anyway as there is an incredible variance- as you know. 

I am giving an alternative view to the doom and gloom posters saying it’s the end of the world .

my sentiment at the moment is that it is impossible to guess either way .

I think we have had similar discussions in the past. 

Your post is as relevant as Jeremy Corbyn the game in town is now all about Johnson and his crew.

Yes, it does have a bit of deja vu about it.....I think that its been long enough since the referendum for all possible scenarios have been baked in now; GBP is approx 8% lower than pre referendum  - but there are some sensitivities. The USD is now more sensitive to their domestic issues, which can lead to volatility. The GBP / Euro rate I dont think will move very much at all - not much below 1.20, not much above 1.25 for the foreseeable, unless a real curveball gets thrown. Also some potential further weakness as there is downward pressure on interest rates.

I don't agree. Nothing will happen with the Tories in the next year. Labour, in contrast, now gets to choose between far-left and moderate once again. This choice will decide whether Labour will take over when the Tories inevitably hit the next crisis (end of next year?) or not.

Not really until the Labour leadership change, they won't win any election. The ground work for 2024/5 should start now, if they don't carry out their function as an opposition party in the coming months then even more voters will leave them. They can't afford to sit idle over Xmas, they need to come out fighting and get the leadership contest sorted. 

Obviously. But there isn't going to be an election.

The coming five years might as well be a lifetime. What happens to Labour in 2020 may very well echo through into 2025 but there is still much time for turmoil. Either way the specifics of these next few weeks and months will be long forgotten when we next pick a box to tick. They have the time they need to work this through.

If I were a betting man I'd speculate Labour's chances in 2025 hinge on securing an alliance to deliver radical electoral reform and judging the English mood well over Scotland. I don't honestly think they will even try, I think this will be too bitter a pill to swallow.

jk

I didn't take you for an optimist - 10 years minimum...

I'm not. I agree with you, it'll take longer for Labour's new reality to sink in, defeat in 2025 might deliver the lesson. We'll see how the Conservatives embrace their new reality, the tension between MPs' ideology, donors' needs and new voters' hopes will not be easy to manage!

jk