Microsoft hikes U.K. prices by 22%(money.cnn.com) |
Microsoft hikes U.K. prices by 22%(money.cnn.com) |
I'm utterly fascinated by Brexit -- I'm here in Ireland and it's going to be part disaster part boom depending on how we handle it so it has very real consequences. I think the biggest damage will be that to young people in the UK who will likely be denied the ability to travel as freely to live and work across the EU and this sort of denial of opportunity won't manifest as obvious for many years.
We put up the price of our software in the UK once we heard the referendum result and May indicating hard Brexit. On both occasions Sterling dropped.
At the same time, the volatility of exchange rates are worrying businesses, but the absolute value is probably rather positive for the economy. People will buy more local and exports are cheaper. The economy seems to hold up well and will probably continue to do so until Brexit actually happens.
To be clear, I'm absolutely no fan of Brexit, but I don't think that it will have negative effects in the next 1-2 years. In the longer term this may look very different.
But I'm not so positive on the effects as you are. Britain's manufacturing output, the thing it's most likely able to export when it leaves the EU, has a large imported component in other materials, and the transaction costs there will be higher not just because of lower sterling.
Since Britain hasn't been able to compete effectively in manufacturing with Germany while in the EU, I find it hard to believe they'll be able to compete with China when they're out in the same seas. So I don't see a resurgence in manufacturing. Honestly, when you buy something, is British a sign of quality? For me, not in food, not in durable goods, not in almost anything.
And Britain's main export is services, which it doesn't have much in the way of trade agreements by default. So that gets screwed by Brexit too.
Personally, if Brexit goes through, I'll be leaving the country. I'm Irish living in London, and while I'll probably have working rights grandfathered in (the same way I can vote in national elections, from the history of our two countries), my 3 year plan is geared towards leaving. I'm still only 60% sure Brexit means Brexit, though.
I don't understand how they are calculating it to only be around 3%.
We are already noticing things to be running at around 10% in imports, and sometimes more across various things.
We import a lot in the UK; energy, food, goods.
I personally think it will be way above 3% possibly reaching double figures.
2007: Business needs to be protected from Pound fluctuation: we accepted the new norm that a $500 gadget cost £500
2016: Brexit hurt our company earnings : like I care, we are full stack OSS
We use full stack OSS too, not a penny spent on licences.
Have fun with your 22% M$.
Brexy-fans can say it's "fluctuating not tanking"; we still have to pay more for software (and less for hospital beds, staff, and so on. In big orgs these costs are gibberring).
(personally I'm betting on EUR-GBP parity by xmas, because my Cassandra gland is firing overtime)
http://www.independent.co.uk/news/uk/home-news/brexit-vote-l...
Can someone explain this part of Brexit. Nigel Farage resigns in July 2016 after he wins the vote. Why? Says he did "his job" and didn't want to be a career politician (according to Wiki)
Then earlier this month he stepped back in as party leader of UKIP after his replacement was forced(?) out/unable to garner support? Did he just get bored and want his job back? Seems like he has ample time to fly over to the States to pump up Trump.
What I'm trying to get at is this whole Brexit triggered a huge depression in the value of the Pound. Yet the Conservatives and UKIP are still in power? Or can no one do anything until the next general elections?
Also worth remembering that Britain is still de facto in the EU for a few more years.
http://www.telegraph.co.uk/business/2016/10/05/no-prime-mini...
Theresa May could have done all kinds of things to force favourable Brexit terms for the UK.
For example she could continuously lower corporate taxes for foreign investment for while not activating Article 50 and simply wait until it really hurts the EU. If the EU doesn't give in the UK continues to wait and makes a lot of money in the process, if it does then the UK also wins.
I suspect that the UK's prime minister actually wants to tank the economy to do another Brexit vote. (the EU loves this, just repeat until you get the desired result - that's one of the reasons why the EU will fail)
She really wants to join her friends at the Soviet High Command in Brussels again.
I'd argue Britain is de facto out of the EU already. Anybody planning for the future is operating under this assumption. A few concrete examples: Scientific collaborations, corporate growth plans, and policy-making has all been impacted AFAIK.
There are always two sides to a rising or falling currency. In the case of the weak Pound, it is good for exporting British companies and for tourism.
... If/when we get there, any bets Microsoft will not lower pricing?
UKIP is a single-issue party. It rarely happens for single issue parties, but, well, they won - not "to within a reasonable approximation" or whatever copout one might come up with, they won flat out. The dog caught the tail. Nobody knows what's next; this part was never in the script. There's a chance UKIP will morph into conservatives-in-the-north (where, for context, the Conservative party hasn't really been competitive for a couple of decades mostly because of the Thatcher legacy, but UKIP actually is), but I honestly wouldn't bet on it. They're simply not wired for being a 'real' party.
In answer to your wider point, I think you're reducing the problem to the value of the pound when there are many more factors at play ('sovereignty', border controls, democracy etc). Plus, many people viewed sterling as overvalued so a fall might not be too bad a thing.
It might be that, in time, the negative economic consequences of Brexit affect the Conservatives in the polls but it's too early for that.
> Then earlier this month he stepped back in as party leader of UKIP after his replacement was forced(?) out/unable to garner support?
He didn't want to be the one holding the bag once brexit had passed, so he skipped town for a while, let others handle the early fallout then came back fresh as a rose with little to no blame.
The man's a shit-weasel.
As for Farage - I don't think anyone really understands his actions or motivations - I wouldn't put too much thought into it.
So while there will be some inflation (estimated at 3% at the moment), the economy profits from the exchange rate movements. The underlying problem is that the GBP lost value because of the uncertainty, and this uncertainty is not good for the economy. However, people voted for Brexit and a lot of them are happy with the result. So this uncertainty won't necessarily lead to less consumption. Current economic data looks better than what was anticipated before.
So as long as people are happy with the current situation and the outlook, the economy could actually profit from the vote in the short term. The longer term is of course very dependent on the deal that the UK will get.
Regarding your other points: A lot of promises were made in the campaign that are completely unrealistic (£200mln a week for the NHS). Not being part of the government makes it easier to ignore those promises. Boris is probably one of the only ones who could face questions at some point, in case the deal isn't as great as he believes.
As Conservatives are already in favour of a hard Brexit, it's hard for UKIP to get many voters in that space and to gain more seats in the next election. Farage saw the chance to sell the vote as his win (although he wasn't even part of the official campaign) without having to implement any of the consequences. The party is an absolute mess. They don't seem to have a lot of competent people, so Farage basically had to take over again. I don't think he planned that. Especially as they'll have to find a motto now. Their purpose was to get the UK out of the EU. With that done, the question is why people should vote for them.
We'll see over Christmas, as the Christmas shopping is now the first time that people will really feel the rising prices. Given that more Leave voters regret their vote than Remain voters already, it'll be interesting to see polls in Jan/Feb as well.
> (£200mln a week for the NHS). Not being part of the government makes it easier to ignore those promises.
They're now faced with a letter from 40 MPs asking them to either honour the 350m/week (not 200) or explain why several Tory cabinet members misled the public during the campaign. Of course they'll do neither but that isn't the purpose either - the purpose is press. But given that a number of Leave campaigners are part of the goverment you can expect the next two years to consist of a constant stream of attempts to embarrass them over those claims...
> As Conservatives are already in favour of a hard Brexit
Some are. At least on the surface. May has a small enough majority that it is very possible she'd face rebellion over that. But then again, May presided over the Home Office for 6 years and talked up being tough on immigration and achieved pretty much nothing - quite possibly on purpose - so I'm not so convinced that she actually wants hard Brexit, but is using the same tactics of talking up how hardline she'll be to the public and pursue a softer line. Of course the problem with that this time is that her counterparts in Europe are hearing all of this too.
This is true, however a problem is when you cannot substitute expensive imports with local products. Two obvious examples: Cars and computers.
Many computers are priced in USD, so after Brexit many IT departments found they could only buy 9 servers with a budget that was supposed to cover 10 (this happened to us).
> However, people voted for Brexit and a lot of them are happy with the result. So this uncertainty won't necessarily lead to less consumption.
A lot of them are also very unhappy, it being so close and all. Completely anecdotal, but out of an office of ~60, 2 senior and 2 junior programmers decided to leave the UK post-Brexit. I think brain-drain and it's effects is much harder to predict, but quite damaging in the long run.
Wasn't there some scandal around his replacement (rumours of a punch-up)? There's also the possibility that this was his plan all along.
> What I'm trying to get at is this whole Brexit triggered a huge depression in the value of the Pound. Yet the Conservatives and UKIP are still in power? Or can no one do anything until the next general elections?
Remember that the public voted for it in a referendum - the Conservative government was opposed, at least officially.
Fluctuations in the value of the pound don't normally bring down governments.
Measuring inflation is tricky as it affects everyone differently. The RPI is perhaps a better measure for consumers in the UK and could go a bit higher. Perceived inflation will certainly be even higher, as most people focus on prices for groceries and petrol to measure inflation, the most affected goods.
UK food prices are already fairly high even tho they are already being subsidised to match cost, many items like milk are subsidised because the supermarkets are paying below cost prices to the farmers.
That said the EU losing the UK as a trading partner won't go well either, Germany will have to find another country to sell stuff too to cover the $50 bln. loss in trade deficit if the UK implodes.
The CPI is also unlikely to be able to capture hidden inflation, such as using cheaper ingredients in food to offset currency depreciation.
These are just off the top of my head. Calculating inflation is complicated.
You're right, the number was even higher. But I think it's clear to everyone that the NHS will never see that money. And most newspapers are still in favour of Brexit and won't remind politicians of that promise.
> Some are. At least on the surface. May has a small enough majority that it is very possible she'd face rebellion over that. But then again, May presided over the Home Office for 6 years and talked up being tough on immigration and achieved pretty much nothing - quite possibly on purpose - so I'm not so convinced that she actually wants hard Brexit, but is using the same tactics of talking up how hardline she'll be to the public and pursue a softer line. Of course the problem with that this time is that her counterparts in Europe are hearing all of this too.
I agree, don't think either that May really wants a hard Brexit. But it makes her popular with the people. Don't think her strategy will pay off. In the end there will always be a parliament in the EU blocking any Brexit deal that would give sth away to the UK. Belgium has shown that nicely with CETA.
I'm going to list a few other candidates for the UK's biggest problem:
* The pound plummeting like a rock.
* Xenophobia, bordering on fascism, being advocated by the press.
* The gradual, quiet, handing of the NHS to private companies.
* Ever growing demand for food banks, most notably by people working jobs that don't pay enough to fulfil basic needs.
* The only vaguely viable opposition to the government self-destructing right when they're needed most.
But sure, its definitely people complaining that are the problem.
* Xenophobia, bordering on fascism, being advocated by the press. - BBC is nothing but a continuous charity appeal.
* The gradual, quiet, handing of the NHS to private companies. - Precedes Brexit.
* Ever growing demand for food banks, most notably by people working jobs that don't pay enough to fulfil basic needs. - Precedes Brexit.
* The only vaguely viable opposition to the government self-destructing right when they're needed most. - Precedes Brexit.
Completely off-topic.
These things are still:
>"candidates for the UK's biggest problem"
Are you suggesting that "remainers being negative" is causing lack of confidence. That puts the cart before the horse somewhat.
Brexit doesn't give £350m to the NHS. Brexit doesn't get us out of ECHR (and that wouldn't be a benefit anyway, since ECHR agrees with UK on over 99% of cases). Brexit doesn't give us control over our spending. Brexit doesn't give us control over immigration.
As the irish figured out, arbitrarily low corporate taxes are just not possible in the EU. This approach would also alienate all partners that she needs to work with later in the process, so that's probably a pretty bad idea. Additionally, it would put her under massive pressure from the brexit fraction that wants migration control yesterday, no matter the costs. Last but not least, the EU could just take the stance that the continued announcements of the legal government to invoke article 50 constitute sufficient grounds to start the proceedings. The UK could certainly fight this, but well, there's sufficient ways for the EU to make the UK sufficiently miserable in turn. All in all, negotiation tactics that alienate the people on the other side are not a good idea if you're an island and the economy right across the channel is bigger than yours.
Well but sorry, you are wrong here. The Irish selectively made deals with companies, that was ruled illegal. Not having low taxes, which works great in case of Malta. (5% tax for foreign investors)
http://www.forbes.com/sites/leesheppard/2016/09/05/the-eu-ca...
> Last but not least, the EU could just take the stance that the continued announcements of the legal government to invoke article 50 constitute sufficient grounds to start the proceedings.
I suspect more countries would leave the EU if it did something highly illegal like that, but can't be ruled out. The EU is like the Soviet Union so criminality is part of its nature.
I swear I have no clue how so many people don't know basic enough history that they are so mistaken by what communism is.
A right winger would not want to expand an already bloated government to direct even more of the economy, that just doesn't make sense.
Bismarck, who was right wing under the original definition - as a monarchist, and loyal servant of of the Prussian crown - massively expanded the German government by creating the first part-public welfare state, so clearly it's not that clear cut.
Meanwhile the Tories under Theresa May are doing her best to tear down the UK welfare sector. I don't know from where you got the idea she wants to expand government.
The UK already has very low corporate taxes. If corporate tax rates was sufficient, we should have a steady stream of companies moving from the US, which has nearly twice as high corporation tax, for example.
But as it happens, low corporation tax is not sufficient.
And certainly not while uncertainty over Brexit terms is wreaking havoc on confidence, and many companies are already planning to move.
She could for example say the EU is not cooperative, the UK will stay for the next 5 years and lower taxes for foreign investments to 5% like Malta does. That would hurt the EU a lot and I bet they'd be more open for discussions after that. If not then continue with other creative ideas, the EU can't survive a remaining UK that is actively working towards hurting the EU. (the EU probably will not be able to survive anyway the way things stand right now)
From a moral perspective you couldn't even argue that it's immoral if the UK did this as highest EU officials have publicly proclaimed that they will make the UK suffer so it'll be an example for others.
Or they would just boot them out. Article 7 TFEU does exist.
Abortion laws, vice laws, surveillance laws and increased law enforcement powers to name a few things. Just look at the Republicans in the US. They are the antithesis of 'small government'.
No right winger alive today holds Bismarck or the original right wingers in French monarchy as his ideal. I see that people often cite this but I'm really mystified why they do as it adds nothing to the discussion.
Maybe you hope to convince others to like the welfare state because Bismarck did too?
> Meanwhile the Tories under Theresa May are doing her best to tear down the UK welfare sector.
Her attempts are very weak for a right winger.
> I don't know from where you got the idea she wants to expand government.
http://www.telegraph.co.uk/business/2016/10/05/no-prime-mini...
And the most you could do with this Article is take the UK's voting rights.
I'm sure the UK can come up with ways to punish the EU into submission without breaching any laws. (5% tax would be legal) Also how about vetoing almost everything. That's a political tool that has shown to be very effective for centuries.
Either way you slice it, if the UK wants access to the market at advantageous terms she will get it. The question is only how much does she want it.
Actually, "the risk of a breach" is sufficient. And given that the UK openly promotes xenophobia and racist attacks are on the rise and have been since the Referendum...
Do not expect Europe to play fairly when the UK decides to play dirty, e.g. by trying to actively damage EU member states while being an EU member state..
> And the most you could do with this Article is take the UK's voting rights.
Actually, the EU can take it all, including voting rights.
> I'm sure the UK can come up with ways to punish the EU into submission without breaching any laws.
And I am sure the EU can very easily destroy the UK's economy for the next few decades without much effort, should the need arise. All they need to do is to invoke trading sanctions with any non-EU state that trades with the EU. Let's see if China or the US would rather trade with 40-odd million Britons, or 500 Million EU citizens.
> Also how about vetoing almost everything.
Aka. "the trantruming toddler in the supermarket" - it doesn't work.
> if the UK wants access to the market at advantageous terms she will get it. The question is only how much does she want it.
I agree - and it will cost the UK dearly. After fourty years of special deals with London, the EU is fed up.
I doubt it makes sense for me to engage in a discussion with you.
Yeah, remember this News, where the UK government essentially encouraged those damn pesky foreigners to Keep their trap shut?
> http://www.bbc.co.uk/news/education-37590044
I agree, that's pretty insane - and it is rather xenophobic, if not encouraging xenophobia.
Well, it states it is a national security / foreign trade issue which I feel is accurate regarding Brexit. I don't view it as racist to not allow foreigners to influence the government on national security issues since the UK is a sovereign country that has interests which clearly conflict with the interests of many EU countries.
Most Western countries have laws to prevent that from happening, including the US. (even accepting foreign donations for election campaigns is limited or forbidden in some cases)
Another characteristic, by the way, is the thought of forcing neighbors to appease the country by means of economic or military force.
History shows us that these things usually don't work out too well.