http://www.bloomberg.com/news/artic...warning-as-officials-hold-rate-before-eu-vote
Just one week before the U.K. votes on its membership of the 28-nation bloc, the Monetary Policy Committee -- led by Governor Mark Carney -- said uncertainty was already having an impact and this could heighten if Britain quits.
That may mean a “materially lower path for growth and a notably higher path for inflation” as well as a rise in unemployment, officials said in a statement on Thursday that accompanied their decision to keep the key interest rate at a record-low 0.5 percent.
This is an important warning and one that will significantly impact UK earnings and lost revenue.
The economy outweighs EU fees
EU fees have become a hot potato politically, but it’s worth establishing the scale of the debate.
The size of the UK’s annual economic activity was £1,800 billion in 2015.
The annual fees to the EU in 2015 were £18 billion, but we get a rebate, after that the fees are £13 billion, plus there’s the money the EU spends money in the UK; so what it actually costs us is £8.5 billion.
So while fees for the EU club are huge, they’re dwarfed by the scale of our economy.
That doesn’t diminish them as a political issue, but it does mean they can’t be viewed in isolation.
Just a 1% economic change is £18 billion a year. The IN campaign’s worst case figure says Brexit could cost 7.5%, so that’s £135 billion.
Some OUT economists say the gain could be 4%, so £72 billion. Regardless of which is right, it shows how you think the nation’s finances will swing should outweigh your view on fees.
Basically, the Brexit campaign has been very good at pointing out the other side of the green fence about what you will gain; wages will rise, house prices will fall, no more regulation or directives on trade, trade with anyone you want anywhere in the world, control migration, reduce pressure on public services, help schools and hospitals and be able to vote out Boris and Gove if they get it wrong as we'll be a sovereign state.
What they do not mention is what if they are wrong and we are not able to grow pairs and our backs do in fact turn out to be spineless.
- What if Brazil reduces to agree to a trade deal with us and maintains 17% tariffs on hovercrafts.
- What if Japan relocates.
- What if investment banks relocate to Europe.
- What if foreign investment decides to locating in Germany France Italy or Spain
- What if aging population continues to age and a bigger tax burden is to be carried by a reduced working population
Recessions tend to be self fulfilling. They will feed off each other once expectations set in. In fact investment has already stopped along with building as big corp wait to see outcome.
Anyone who thinks after an Brexit vote they'll continue is living up in lala land.
So you can grow as many pairs as you guys like. Indeed I hope yours are as big as conkers but you know it will not make the slightest of the smallest difference to how the rest of the World will view opportunities in the isolationist UK.
Big money at stake here. Literally 100s of billions not 10s. Quite easy to lose 10 years membership fee in a few months. Not my calcuations just other peoples.
Serious thinking required. You be the judge [emoji106]
Good luck with those pairs
