The world economic slowdown

The Central Banks of the USA, Euro area, UK and China have all been slowing the economies they regulate. The US economy has done the best, as the Fed has allowed substantial credit growth in the private sector to offset some of the impact of rate rises and the reduction of Quantitative easing money and repayment of bonds. As a result the US economy which started to grow at more than 3% may manage more than 2% this year. The impact of the tax cuts and fiscal stimulus administered by the government is helping.

The Bank of England has been the toughest, cutting money growth considerably, reining in car loans and consumer credit, putting through two rate rises and ceasing all Quantitative Easing. The European Central Bank has been the softest, continuing with large amounts of money creation and bond buying up to the end of last year, and flagging no rate rises for the foreseeable future. Their current interest rate of 0% is lenient.

Despite this the Euro area economy is slowing the most. Italy is in recession, reporting reductions in output in both the third and fourth quarters last year. Germany had a down quarter in the autumn and may have had another down quarter to December 31. Greek and Cypriot output remains miles below the 2007 levels, with Italian GDP also still lower than pre crisis in real terms. French growth is slowing markedly and the whole Eurozone is back in stagnation. The UK is managing slower growth, which shows underlying strength given the squeeze being administered by both the Bank and the Treasury.

China has seen a small slowdown in growth on the official figures, with reports of a sharper slowdown for manufacturing and imports. Chinese money policy has also been more restrictive than in the past, with the authorities now signalling they wish to relax a bit to avoid more damage to growth.

It is difficult to see what the Eurozone can and will do to lift things. It is a poor background for the traditional parties fighting the European elections in May, but it is the result of the disciplines of the Eurozone. All the time the Germans and the other richer surplus countries decline to send more grants and cash to the poorer parts, it reinforces the need to squeeze budgets to keep finances in control. This in turn leads to slower or no growth, which in turn means less tax revenue and a bigger budget squeeze.

The Euro, just like the Exchange Rate Mechanism it replaced, is a recession machine for the weaker economies. That is why the Italian government tried to get a different budget, and one of the reasons why populist parties around the continent are making progress electorally.

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134 Comments

  1. Mark B
    Posted February 12, 2019 at 6:04 am | Permalink

    Good morning.

    The UK is managing slower growth, which shows underlying strength given the squeeze being administered by both the Bank and the Treasury.

    Too true ! And all this despite BREXIT. 😉

    But on the plus side we have ‘bounce-back-ability’. Should things really slow we can at least loosen the strings and hopefully get some growth.

    My main concern is Germany. With the Paymaster General slowing that means there may well be less money for Zombie Economies like Poland. Poland’s economy, along with many others, are highly reliant on EU cash. The rEU27 also benefit by having the UK a captive market. Outside the EU the UK can source cheaper food and goods making things even harder.

    Taking the above into account I think we have little to fear from Leaving the EU as, in time, the EU will want to do a proper ‘deal’, a trade deal, with the UK.

    • Mockbeggar
      Posted February 12, 2019 at 10:38 am | Permalink

      The BBC radio news at 6.00 pm last night got very excited about the fact that the economy was slowing and what Carney had to say about it. Not one word was said about how it was still growing more quickly than the Eurozone countries.

    • Mitchel
      Posted February 12, 2019 at 10:49 am | Permalink

      Slightly offtopic but I haven’t seen any comment on this article in the FT last week(6/2) :

      “UK set to become a net importer of defence equipment for the first time since the Civil War,underlining long held concerns about the country’s declining manufacturing base.”

      • Chris
        Posted February 12, 2019 at 5:35 pm | Permalink

        Summon President Trump and his team for advice on how to revive those industries. The government in the UK doesn’t have a clue, and at the same time seems determined to go down the globalist new world order route which destroys sovereignty. Think EU army plans/defence policy which May et al have signed up to and committed us to.

      • libertarian
        Posted February 13, 2019 at 10:04 am | Permalink

        Mitchel

        Our manufacturing base IS NOT declining, its growing

  2. Dame Rita Webb
    Posted February 12, 2019 at 6:24 am | Permalink

    You missed out the Irish Republic. How long can they keep spending around half the government’s income trying to service their debts, while at the same time having an aim to import a million new Irishmen? Ireland is a basket case, on a par with Greece, yet as you would expect Mrs May and Ollie kowtow to Varadkar.

    • A.Sedgwick
      Posted February 12, 2019 at 9:08 am | Permalink

      Greece should have left the Euro/EU seven or so years ago, but just as our lot, except Yanis Varoufakis their Government bottled it. Italy is going the same talk the talk route. Both economies could be rejuvenated outside the EU.

      • Posted February 12, 2019 at 3:38 pm | Permalink

        ”….could be rejuvenated outside the EU..” But then their leaders, in the pay of the EU one presumes, wouldn’t get their nice big fat pay-cheques and pensions.
        Or doesn’t it work like that?

    • acorn
      Posted February 12, 2019 at 9:53 am | Permalink

      Ireland has a Current Account surplus of 12.5% (UK 4.1% deficit); a government budget deficit of 0.3% (UK deficit 2.3%). A debt to GDP of 68% (UK 83%).

      The Irish Republic is corporate America’s European campground. It is one large financial institution with a small country attached. The 33 million Irish Americans will never let the Irish Republic come to any harm; particularly from the British.

      • Dame Rita Webb
        Posted February 12, 2019 at 1:48 pm | Permalink

        You need to do some research on ‘leprachaun economics’. The economic data that the Irish present to the world, with a straight face, is about as truthful as some of the stuff that comes out of China. Have a read of this and remember it was the British taxpayer that came to Ireland’s assistance in 2008, not the Kennedy clan.

        https://surplusenergyeconomics.wordpress.com/2018/09/05/134-an-extremity-of-risk/

        • acorn
          Posted February 12, 2019 at 4:29 pm | Permalink

          That is what happens in a small country which suffers large flows of capital in and out and an unstable tax base. Iceland was a similar case. Its financial sector was many times larger that countries GDP. The UK, pre 2008, had a financial sector seven times the size of the UK GDP.

      • a-tracy
        Posted February 12, 2019 at 2:42 pm | Permalink

        Then we should raise the rate of interest back to the original agreement and overturn the discount Osborne gave.

      • Jagman84
        Posted February 12, 2019 at 8:32 pm | Permalink

        Just imagine how much wealthier Eire would be, outside of the EU. No stifling rules and regulations and moderation of competition to get in the way. It’s a great pity that they have an EU quisling at the helm.

    • billR
      Posted February 12, 2019 at 10:03 am | Permalink

      What is this thing about Veradkar..he’s leader of a minority government..there will be a GE in Ireland in a few months time and somebody else will be there..don’t know what the fuss is about. Ireland, population 4.5 million, is doing OK, fighting its way against the odds, and even with a no deal brexit bearing down.

      • mancunius
        Posted February 12, 2019 at 11:06 pm | Permalink

        Actually, a no-deal brexit will send the RoI agri-market into a tailspin.
        It will be humiliating for them to be once more on the take from Brussels just to keep themselves going – Joe Healy, head of the (RoI) Irish Farmers’ Association pointed out last week that once the UK has adopted WTO tariff schedules, Irish beef is no longer competitively priced for Britain, as RoI beef margins are so low, and we’ll be getting our meat more cheaply from elsewhere. So the EU is going to spend a mega-billions subsidising RoI beef they can’t sell.
        Plus RoI lorries can no longer rely on using the UK as a land-bridge to the continent, and the EU-imposed round route to the Netherlands via the French coastal Channel takes three days, and costs three times as much.

        • stred
          Posted February 13, 2019 at 10:42 am | Permalink

          Once outside EU regulations, we should ban the transport of live animals over 100 miles. The Irish transport cattle to Spain in hot temperatures to be slaughtered in conditions that may not be up to British standards of welfare. Most Irish would agree that they should export refrigerated meat instead. The same goes for British.

    • Tad Davison
      Posted February 12, 2019 at 10:45 am | Permalink

      Varadkar has done further damage by being so obstinate towards the UK, and the British won’t forget him in a hurry. He shouldn’t now be surprised if the people of the United Kingdom turn away from southern Irish produce, but I wonder if the main beneficiaries of this grand EU project – the Germans – will ever take up the slack and keep Ireland afloat? But for Varadkar, there could yet be a silver lining in the shape of a bright future as a highly-remunerated EU commissioner. I certainly wouldn’t bet against it.

      As far as Theresa May goes, she already is a basket case, but the Tories could turn things to their advantage by purging her and her kind, and giving us the type of government the people are crying out for. The future is in their own hands, but because of the sheer number of these pro-EU toadies in the Tory party, they will soldier on with this nonsense. Sometimes it is impossible to make others see they are in fact the architects of their own downfall.

      I am intrigued to know more about the new Brexit party that could well hoover up the votes of all those made ‘homeless’ by the antics of the four main Westminster parties in whom many people no longer have confidence.

      Tad

      • HarveyG
        Posted February 12, 2019 at 3:13 pm | Permalink

        Veradkar is not obstinate towards the UK or anyone else..he’s just being Veradkar, young, youthful, stylish, decisive, confident, a modern man, a medical doctor, a Taoiseach, a committed european, an Irish government leader who is only looking after his own, something we don’t have in the UK at this particular time

        • stred
          Posted February 13, 2019 at 10:51 am | Permalink

          He seems to have a plan to import 2 million extra future citizens to live in social housing outside the main towns like Dublin and Cork. This is in accordance with the UN Migration Pact and should help Mrs Merkel out. It’s to improve diversity. Presumably, the voters will thank him for being a committed European, modern man, young and decisive, particularly after their beef and dairy industries are buggered after he refuses a trade deal with zero tariffs and the French and Germans don’t like Cheddar. Are the bookies taking bets on him being around. He may be ‘looking after his own’ job with the Commission.

          • dittoagain
            Posted February 13, 2019 at 5:50 pm | Permalink

            One in six in the Irish Republic is foreign born, more percentagewise than England

        • Edward2
          Posted February 13, 2019 at 3:42 pm | Permalink

          Sounds good.
          Apart from the fact that if there was an election today he would be voted out.

  3. Anonymous
    Posted February 12, 2019 at 6:58 am | Permalink

    All UK woes are down to Brexit *uncertainty*.

    So who made Brexit uncertain ?

    • Know-Dice
      Posted February 12, 2019 at 9:02 am | Permalink

      And ongoing uncertainty if the Withdrawal Agreement is signed.

      With a “transition period” followed by an “implementation period”….

    • Stephen Priest
      Posted February 12, 2019 at 9:26 am | Permalink

      So who made Brexit uncertain ? – Remainers.

    • Mark B
      Posted February 12, 2019 at 10:16 am | Permalink

      A Remain PM, Government, Parliament, Civil Service and MSM.

      • Caterpillar
        Posted February 12, 2019 at 4:39 pm | Permalink

        + a remain BoE Governor

        • Caterpillar
          Posted February 13, 2019 at 12:15 am | Permalink

          And May continues to run down the clock ramping up uncertainty and lack of preparation. The choice is BRINO with no representation or Remain with representation. Brexit supporting MPs need to back a long extension now so that we get a vote in the May European elections – without this a real Brexit is doomed. JRMogg’s waffle about letting in the far right is misplaced, we need to be able to vote for the new single issue Brexit parties.

    • Andy
      Posted February 12, 2019 at 4:45 pm | Permalink

      Awwww. Welcome to your new reality.

      Brexit is now to blame for everything. You get no credit when things go right – and you get criticised when they don’t. You can not win.

      Fair? No. But exactly the same as you did to the EU and its predecessors during our membership. Brussels was to blame for everything bad. Brussels was responsible for nothing good.

      It goes without saying that these same rules must apply to Brexit. I find it highly amusing that most of you do not realise this. You will not believe how draining it will be.

      What is clear is that there is precisely no way now for you to avoid defeat. Brexit will be undone. The question is whether it takes 5 years or 25. I do not mind – so long as we get to pay all your pensions in Euros!

      • Edward2
        Posted February 12, 2019 at 10:41 pm | Permalink

        You define democracy.
        If everyone in the UK wants to re join then perhaps it will happen.
        We waited over 40 years to have a referendum.
        It will be a similar period before you get another one.
        Assuming the EU still exists.

      • libertarian
        Posted February 13, 2019 at 10:10 am | Permalink

        Andy

        You might want to turn your attention to the EU and find out what is actually happening to the institution you want to belong to.

        Aside from the financial and economic mess, aside from the damage caused by the Euro , aside from the flatlining jobs market, aside from the horrendous youth unemployment in the EU

        The EU Ombudsman has delivered their final verdict on the utterly scandalous appointment of Juncker’s man Martin Selmayr to the top job in the European Commission, concluding that “Selmayr’s appointment did not follow EU law, in letter or spirit, and did not follow the Commission’s own rules”

        Going well then, still at least your kids can join the EU Army and try to repair both German tanks.

        • hans christian ivers
          Posted February 14, 2019 at 3:26 pm | Permalink

          Libertarian,

          It gets increasingly more pathetic, you should really know better. But do you ?

  4. Lifelogic
    Posted February 12, 2019 at 7:27 am | Permalink

    Your conclusions are quite right. The EURO is indeed a recession machine for the weaker economies. Just as sensible people predicted it and the ERM would be.

    The UK banks are also absurdly restricted (by regulation) in property lending with a requirement to stress test all the property holdings of people with more than 3 properties. This means many banks just are often simply not interested due to all the work involved they stick to people with fewer.

    Margins & fees are also not very competitive and terms can be very restrictive. Often loans only available on 5 year maximum terms. One high street Bank is paying less than 0.5% on deposits while ripping of customers (even very solid ones) for circa 68% “interest” they call it a “Daily OD fee” so as not to declare the real % rate on overdrafts. More than 136 times more than they pay. Where is the competition authority? Bank spreads for solid customers use to be about 2.5% now they about 5% at best and up to 67.5% often.

    On top of this we have an expensive greencrap energy policy, daft restrictive employment laws. the highest, attacks on the gig economy, the new probate tax. absurdly complex and totally idiot levels of taxation all round from grim reaper Hammond. Particularly the moronic levels of stamp duty and taxation of “profits” that are not even being made for property letting businesses. Thus killing supply and pushing up rents for tenants.

    Yet the government is still borrowing tens of billions of pounds this while providing fairly dire public services (often worse than useless in many cases).

    Can someone tell this government that we cannot all work for government or as lawyers, tax planners, HR, Heath and Safety or other government red tape compliance consultants. Some people need to actually produce good or services of real value for people.

    Just the new “making tax digital” racket will cost my businesses about £2000 PA more than the old system (in new software and peoples time) what is the point of this lunacy and total waste of money? Does someone in government have shares in accounting software companies?

    • Lifelogic
      Posted February 12, 2019 at 10:30 am | Permalink

      So May would win (only just) an election held today the papers claim. Well they thought that last time until May did her robotic, stuck record, I am an idiot act and published her socialist punishment manifesto. Imagine if they had a proper low tax, small government, cheap energy, pro Brexit leader – they would be miles ahead.

      Thank goodness Corbyn is so useless, but is, at least, still a leaver. As surely he still is.

      • A.Sedgwick
        Posted February 12, 2019 at 4:45 pm | Permalink

        Many of us would find it impossible to vote Conservative with May still as PM.

        • libertarian
          Posted February 13, 2019 at 10:11 am | Permalink

          A S

          Its not just May, the Tory party has show themselves to be incompetent, detached from reality and a socialist lite tax and regulate party

          If there was ANY alternative they would be toast

  5. Sakara Gold
    Posted February 12, 2019 at 7:30 am | Permalink

    Trump’s imposition of tariffs on Chinese exports has disrupted global supply chains and increased costs for many large US companies. Coupled with the humongous and unprecedented levels of gl0bal debt as well as well as the Fed’s gradual rate rises this has increased costs and hence reduced profitability for many constituents of the large US indexes.

    The S&P 500 is trading on a forward p/e of about 16. Personally, I do not think it wise to pay this much for slowing growth. Investors should be caution untill the dust settles and global growth resumes

  6. Dominic
    Posted February 12, 2019 at 7:37 am | Permalink

    When politics subjugate the economically productive we all suffer.

    • Norman
      Posted February 12, 2019 at 8:32 am | Permalink

      This is certainly the case in Zimbabwe, the former bread basket of Africa. A recent charity report (Barnabas Fund) speaks of hyper-inflation, over 90% without jobs, and those in rural areas depending on what they can grow on their small patch of land (rains permitting). It is pitiful to see the abject hopelessness on the faces of this once thriving nation, including little children.

    • Lifelogic
      Posted February 12, 2019 at 11:42 am | Permalink

      As it invariably does.

  7. oldtimer
    Posted February 12, 2019 at 7:43 am | Permalink

    What you have not commented on are the truly massive debts accumulated over the past decade as a consequence of QE. These are to be found in all the big economies at state, business and consumer levels. Those that have decided to borrow on such an epic scale as well as those holding their paper are in bad shape to absorb a sharp rise in interest rates and costs. Both China and the USA face this predicament. There is no easy or painless way out for either. I read that the US government is increasing its national debt at c$1 trillion a year, US companies are borrowing to buy back their shares to improve returns and that US consumers are typically buying cars on 60 month terms with minimal deposits. This cannot and will not end well.

    • A different Simon
      Posted February 12, 2019 at 9:38 am | Permalink

      Oldtimer ,

      Monopoly currency issuers ; i.e. govts , govt controlled central banks should not be borrowing money from the market . They should be printing instead and spending that money into the real economy where it can circulate and do some good – not buying banks trash for cash .

      Debt levels are due to :-

      -i) banks puffing up asset prices (as they always do) by extending credit by creating NEW EXOGENOUS MONEY THEMSELVES OUT OF THIN AIR .

      Rather than blame borrowers for this , remember that behind every irresponsible borrower there is an irresponsible lender .

      ii) Govts of Obama and Gordon Brown bailing out the financial system without adhering to the first rule of bailouts ; that the debt has to be written down first .

      In essence , we are not suffering from the 2008 crash , what we are continuing to suffer from the 2008 bailout and govts decision to sacrifice the real economy to save the banks .

      For some reason J.R. doesn’t seem to accept that there needs to be widespread debt relief . Debts that can’t be repaid won’t be repaid .

    • Chris
      Posted February 12, 2019 at 5:45 pm | Permalink

      President Trump’s policies will, I believe, lead to the restructuring of the Federal Reserve. Maganomics is focusing on developing the “Main Street” economy, and keeping it separate from Wall Street, so that any crashes in Wall Street will no longer bring down Main Street i.e. the ordinary people. There is fascinating info on this on the Conservative Tree House website. What is excellent is that P Trump has a first rate team of economic advisers who are effecting a quiet revolution. People in the UK seem to have little idea of what is going on and certainly our media and BBC are not going to advertise P Trump’s success and his determination to restructure the economy to benefit all the population and not just the big banks and multinationals.

      If you are in any doubt as to P Trump’s achievements to date, see this for starters:
      https://www.whitehouse.gov/trump-administration-accomplishments/

  8. hans christian ivers
    Posted February 12, 2019 at 7:57 am | Permalink

    Sir JR,

    Can we just look at the facts in more detail.

    UK Growth in December – 0,4% so are we managing slower growth?

    A number of EU countries particularly as you point out Italy is having significant problems, but there are also impressive growth stories from eastern and central Europe and Spain and Portugal.
    But overall Europe is slowing down in spite of the fiscal policies have risen about 0.4% across Europe this year, but the question is it enough with the US spending four times as much on tax cuts, which are leading to major deficits.

    So, those are the facts as they stand for the moment.

    • Kevin Lohse
      Posted February 12, 2019 at 4:35 pm | Permalink

      Governments do not spend money on tax cuts. They don’t collect the taxpayer’s money in the first place. There is no such thing as government money, there is only taxpayer’s money.

      • A different Simon
        Posted February 12, 2019 at 8:05 pm | Permalink

        Quote “There is only taxpayer’s money” .

        Kevin , please tell me you don’t really believe that do you ?

        Where do you think the taxpayers money came from originally ?

        There is new endogenous money which is issued by the monopoly currency issuer HM Govt .

        Also new exogenous money which is created by those organisations to which HM Govt grants a banking license when they advance a loan .

        Stop listening to the taxpayers alliance and beware of falling into the trap of trying to apply the household finances analogy to those of the finances of currency issuers .

        • Edward2
          Posted February 12, 2019 at 10:42 pm | Permalink

          I see you are a Magic Money Tree believer Simon.

        • libertarian
          Posted February 13, 2019 at 10:13 am | Permalink

          Different Simon

          It might help if you understood the basics of what money actually is.

  9. agricola
    Posted February 12, 2019 at 8:00 am | Permalink

    As long as the euro remains a common currency across 19 nations ,minus the financial controls necessary across those 19 nations it will fail for many of them. Common currency works in the USA and UK because each one is a political and financial entity where the good areas share the wealth created with the not so good areas. I do not sense a willingness inthe wealth creating largely northern areas of the EU to share it with those areas in the south that need it. The largely authoritarian EU is at present failing to convince it’s people and in some cases their national governments that a unified EU is a good idea. Remain would have us stay in this atrophied totalitarian entity.

    • hans christian ivers
      Posted February 12, 2019 at 10:22 pm | Permalink

      Agricola,

      What is your definition of totalitarian?

  10. Nig l
    Posted February 12, 2019 at 8:12 am | Permalink

    The EU’s objective politically continues to be all non Euro members to switch to it as a precursor to a centralised tax regime, which of course we would be ‘battered’ to accept if we stayed in.

    Something the Remaniacs conveniently overlook.

  11. Caterpillar
    Posted February 12, 2019 at 8:15 am | Permalink

    Despite its debt position the UK is in a reasonable position for (investment based or investment encouraging) fiscal stimulus. The US is still benefitting from a fiscal tailwind. The obvious steps are still spped the roll out of HS2 Old Oak Common to Curzon Street (using UK firms where possible), bring forward a Manchester to Leeds HS link (these two infrastructural projects are key, they can be linked later and cross London later). Bring the Corporation tax cut forward to the first day out of the EU (redesign of tax system needed but can be done later). Move the additional stamp duty on second homes to start at third homes – it’s too big a friction for people relocating. And as we know, lower import tariffs and up threshold for duties. (Energy?)

  12. Ian wragg
    Posted February 12, 2019 at 8:18 am | Permalink

    We can only deduct that the whole global slowdown is due to Brexit.
    Hammond was spouting on TV how Brexit uncertainty is slowing growth so it is obvious to us economically illiterate plebs it affects the whole world.
    It looks like if the WA gets time limited the ERG will roll over and vote for Vassal statehood.
    Do you think that the Tory Party can survive such a betrayal.

    • Chris
      Posted February 12, 2019 at 5:48 pm | Permalink

      They do not deserve to survive, IW. What utter contempt the majority of Tory MPs have shown for us and for democracy.

    • BenD
      Posted February 12, 2019 at 8:25 pm | Permalink

      What we have at the moment is ‘brexit uncertainty’ and following 29 March ‘real brexit’ will set in- the outcome of that nobody knows especially if we leave with no deal.

      Mrs May was telling the HoC today that talks with the EU are ongoing, yes we know that, but talks are not negotiations, and as Verhofstadt has repeated again- Negotiations on the WA are closed- the next meaningful talks leading to negotiations will be if the WA is ratified and then start only after we leave 29 March. Mrs May is playing a dangerous game her beef is not with the EU it seems but with the ERG. She’s winding the clock down on the ERG- don’t think the Tory party is going to survive this- but the big question is ‘why’?

  13. George Brooks
    Posted February 12, 2019 at 8:20 am | Permalink

    This is where the EU’s vast over-spending is going to bring the Euro down and regretfully many of the weaker countries with it.

    In 6 weeks time we have the opportunity to get clear of this mess otherwise it will drag us down as well. We are a huge market for the stronger economies within the EU and they need us on the outside to help them survive.

    That WA and Backstop will kill our chances of getting clear of the storm that is to come and must be voted down. No more weasel amendments to screw up a clean break

  14. Denis Cooper
    Posted February 12, 2019 at 8:33 am | Permalink

    Last night I annoyed my wife by calling her in to watch Ed Conway on Sky News standing in front of a chart clearly showing the UK economic growth rate to have peaked in 2014 and rather erratically declined since then , with no obvious break in the pre-existing downwards trend at or around or since the time of the EU referendum, and yet in effect denying the evidence that he himself was presenting to viewers by representing that the slowdown in growth must be attributable to our decision to leave the EU taken two years later in June 2016.

    A chart much like this, set to show the pattern over the past ten years:

    https://tradingeconomics.com/united-kingdom/gdp-growth-annual

    Her reaction was that I had shown her this before, which could well be correct as the same brazen anti-Brexit lie has come up again and again, for example here in December:

    http://johnredwoodsdiary.com/2018/12/11/a-managed-exit-without-signing-the-withdrawal-agreement/#comment-980145

    “… the economically deleterious effect of Brexit has been so powerful that it has warped the time space continuum, and it started to inhibit growth even before we had voted to leave the EU, in fact even before the Act was passed to enable an EU referendum to be held, in fact even before we had a majority Tory government capable of getting such a referendum Act passed … ”

    Which exchange had even acorn admitting:

    “Denis, I would say the UK declining growth is 85% Osborne / Hammond classic neoliberal austerity, and 15% Brexit. I have another post that explains it.”

    To which I responded:

    “Noted.

    But are you sure that it is 15%, not 5% or 25%?”

    I have been upbraided for calling somebody a liar, but the fact is that our politics and our mass media are replete with unscrupulous incorrigible liars.

    • Chris
      Posted February 12, 2019 at 5:53 pm | Permalink

      The media here, as in the USA, is for most part an arm of the deep state aka the globalists/the global cabal intent on pursuing the One World agenda of which the EU is a necessary component part, enabling destruction of sovereignty, centralisation of power and wealth to an unaccountable political elite, and demanding mass immigration and large movements of labour to feed ever hungry multinational corporations with the cheap labour that their business model requires.

    • acorn
      Posted February 12, 2019 at 7:11 pm | Permalink

      Denis, my gang has refined our current assessment of the UK economy. Conservative Party neoliberal austerity, is doing even more damage to the UK economy than we surmised earlier; but, the same ideology pertains within the EU and is doing similar damage, magnified by the fact 19 members of the EU, are using the same currency. That currency, the Euro, only suits the German economy; all the other members get screwed. Get rid of the Euro and the EU member states can learn how to fly with their own currencies, within the original EEC concept.

      Sadly, the latest Treasury Committee report demonstrates just how little our Punch & Judy MPs understand a fiat currency economy and how it should be operated to maximise the use of resources.

      President Trump will boost the US budget deficit from 3.9% of GDP to 5.0% for fiscal 2019. Circa $1 trillion. He is doing exactly what is required to counteract the damage his trade war with China, is doing to US domestic companies that import loads of stuff from China.

      That budget deficit is irrelevant. It will all end up being saved by the private sector. The US Treasury will never run out of US Dollars. Likewise the ECB will never run out of Euro. They are both currency issuers. They never have to borrow their own currencies from anybody; but, they pretend they do to suppress the demands of the proletariat.

      • Denis Cooper
        Posted February 13, 2019 at 7:00 am | Permalink

        It is worth recalling that the Tory Theresa May’s favourite big business lobby group, the CBI, for whom she is prepared to do whatever she can possibly get away with, including in all likelihood sacrificing our national interest through a covert policy of collusion with Leo Varadkar over the Irish land border, would have had us in the euro as well if the Tory archtraitor John Major had not been stopped in his tracks by more patriotic members of his party.

      • Edward2
        Posted February 13, 2019 at 7:50 am | Permalink

        Interesting idea born from your last paragraph acorn.
        The government could make every adult a millionaire by just creating the money and putting it electronically in our bank accounts.

        • acorn
          Posted February 13, 2019 at 1:21 pm | Permalink

          They could but to keep inflation under control it is forced to limit it to state pensions and benefits.

          • Edward2
            Posted February 13, 2019 at 3:44 pm | Permalink

            Your theory either works or it doesn’t.

      • libertarian
        Posted February 13, 2019 at 10:16 am | Permalink

        acorn

        More damage to the economy? Really so these 32 million jobs and 830,000 unfilled vacancies are damaging the economy, they are the result of no trade, no work and no business? OK acorn if you say so

        You need to stop drinking the Koolaid and discover the government doesn’t do anything that helps, ever it just interferes

        The economy consists of people producing goods and services and selling them to willing buyers . Thats all.

  15. Adam
    Posted February 12, 2019 at 8:59 am | Permalink

    As Euro leaders are squeezing themselves out of office, let’s export old mangles to increase their performance. More power to the UK giving the EU the elbow!

  16. Woody
    Posted February 12, 2019 at 9:11 am | Permalink

    The euro is a construct that only helps the german economy and to a lesser extent france, as the lower the euro exchange rate against other currencies is then the more competitive on the world stage their products appear .. hence germany is keen for more and more of the less affluent eastern nations to join .. their poorer economies devalues the euro. It cannot last.

    • Martyn G
      Posted February 12, 2019 at 8:13 pm | Permalink

      Indeed. And what that means is that Germany once again arises (politically, financially and industrially) as the ruler of Europe. Which is exactly what they intended to achieve and not by war. It might all unravel at some point but I believe that Germany will do all that it can, regardless of effects on other nations, to protect and preserve itself.
      Few recall that in 1941 Germany bombed Dublin to persuade them that it would be far better to remain neutral, rather than join in the war, because that was in Germany’s best interests. That will never happen again, of course, but in historical terms it is interesting to speculate that ‘what goes around, comes around’…..

  17. libertarian
    Posted February 12, 2019 at 9:20 am | Permalink

    Morning my little angry remainer friends

    More bad news

    Rolls-Royce Motor Cars to recruit a record number of apprentices in 2019 – the Goodwood-based luxury car manufacturer achieved the highest sales in the marque’s 115-year history last year and announced plans to create 200 new jobs

    £28m EPSRC Future Electrical Machines Manufacturing Hub in Sheffield set to put the UK at forefront of global electrication revolution – the University of Sheffield AMRC-led project includes Rolls-Royce, Airbus, Siemens, GKN & McLaren

    UK debut of Airbus’ new BelugaXL set for 14th Feb – powered by Rolls-Royce Trent 700 engines, the fleet will transport aircraft parts, including wings made in Broughton, across Airbus’ European sites

    Major expansion of Aycliffe Business Park set to create 3,000 jobs – the County Durham site is already home to 500 businesses, including Hitachi Rail’s train assembly plant

    Oh my word Andy we’re all gonna die as Brexit kicks in…. not

    • Andy
      Posted February 12, 2019 at 4:57 pm | Permalink

      Ah ha! A few new jobs. But no mention of the many which have gone as a fire t result of your Brexit.

      Still as an economically inactive pensioner I know you have little interest in ensuring our economy and our planet is left in decent shape for future generations.

      You are alright and, for you no doubt, that is all that counts.

      • Edward2
        Posted February 12, 2019 at 10:46 pm | Permalink

        There is always a churn of jobs.
        Some are lost and many others are created.
        The figures for recent employment and unemployment have been very good.
        Far better than your Project Fear supporters.

      • libertarian
        Posted February 13, 2019 at 10:20 am | Permalink

        Ah ha

        We have the highest number of people in employment EVER at 32 million we have 830,000 unfilled full time vacancies.Unemployment is now just 4% and falling. You are probably the dimmest person on this forum, you have no knowledge on insight into what is happening around you. No wonder you need to be told what to do.

        Thanks for your insults , but of course you can’t even get that right

        I’m not a pensioner, I own and manage 9 businesses , I employ 100’s of people and I trade internationally . Meanwhile you do up houses using cheap foreign labour

        • libertarian
          Posted February 13, 2019 at 6:50 pm | Permalink

          ps

          wage increases are over 3%

          Inflation is just below 1.8%

          Brexiteers did what the Bank of England’s and our government haven’t been able to do for a decade with ONE vote at the ballot box.

        • hans christian ivers
          Posted February 14, 2019 at 3:17 pm | Permalink

          Libertarian,

          Interesting argument , this is probably the most pathetic form of argument and considering you are not always right, you should really try and keep a more healthy tone

  18. Bryan Harris
    Posted February 12, 2019 at 9:23 am | Permalink

    “The Euro, just like the Exchange Rate Mechanism it replaced, is a recession machine for the weaker economies” – YES, totally.
    This was another example of the EU elite in a hurry – Perhaps the weaker nation’s economies would never have converged with Germany, due mostly to so much industrial muscle being located in France and Germany – but that’s how the EU works, or doesn’t.
    The problem is that the weaker EU nations will never be able to come to a level footing with Germany because they just do not have the industry. Greece was stripped of certain industries because they already existed elsewhere in the EU.
    The EU is never going to be about fairness. The only thing the EU elite can promise is that when all nations, as an EU state are bankrupt, then everything will be equal.

  19. ian
    Posted February 12, 2019 at 10:05 am | Permalink

    It only goes to show that central banks around the world are nearly a busted flush, the last turn of cards coming up, Italy government already making moves to do away with it central bank as they see it as the course of all their problems with over two trillion pounds in debt and growing.
    The depression that the central banks have been fighting for the last 19 years for the elite and governments is coming to a close in the next few years, the few at the top have seen massive increases in pay while the workers hardly anything, even in local gov the pay raises at the top have gone up by 4 or 5 hundred per cent whereby their workers pay has increased by a lot less over that time and in some cases less than 40% and in most boardrooms the increases are in the thousands of percents, they call it globalization with climate change tact on.

    I wonder where they get all the money from and who is going to pay back all the debt?

  20. Everhopeful
    Posted February 12, 2019 at 10:47 am | Permalink

    Just imagine if we had adopted the Euro!!

    I wonder if Remainers try to argue that had we so done we would be in a better position?

    Remainers must have to draw on their endless supplies of cognitive dissonance when pondering the currency-in-name-only of the EU.

  21. Mr Ison
    Posted February 12, 2019 at 10:51 am | Permalink

    Call it out for what it is.

  22. Denis Cooper
    Posted February 12, 2019 at 11:07 am | Permalink

    Off-topic, I read that Theresa May is expected to tell MPs today:

    “… We now all need to hold our nerve to get the changes this House has required and deliver Brexit on time. By getting the changes we need to the backstop … I believe we can reach a deal that this House can support.”

    Firstly I suggest that she refreshes her memory by reading the Brady amendment, which did not call merely for “changes” to the backstop but for its replacement, which can only mean its entire removal:

    http://johnredwoodsdiary.com/2019/01/28/parliament-and-the-people/#comment-991670

    “At end, add “and requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border; supports leaving the European Union with a deal and would therefore support the Withdrawal Agreement subject to this change.””

    Secondly I suggest that all those on all sides who have been pretending that the Irish government might agree to a time limit or a unilateral right of termination for the UK should cease and desist from propagating such nonsense:

    http://johnredwoodsdiary.com/2019/02/09/the-irish-border-2/#comment-994468

    “And nor will the Irish agree to any time limit or sunset clause for the backstop, or to the UK having a unilateral escape clause; of course they won’t, if you want to have somebody permanently shackled you don’t agree to the shackles being fitted with a time lock so they will spring open after so long, nor do you agree to give your prisoner a key to his shackles. That is so obvious that it was very stupid to even suggest such things.”

    And thirdly I suggest that all those who pretend that the Irish government might support “alternative arrangements” which did not include the same or very similar legal effects as the backstop should cease and desist from propagating that nonsense:

    http://johnredwoodsdiary.com/2019/01/28/parliament-and-the-people/#comment-991670

    “… my question is what kind of “alternative arrangements” they could be, given that the Irish government has ruled out the use of technology or indeed anything that would even “imply a border on the island of Ireland” … And given that the UK government agrees with the Irish government that this fabricated problem, a molehill at the border built up into a mountain, should be used as a pretext to keep as much of the UK under as much EU law as possible for as long as possible … ”

    And fourthly I suggest that all those who suggest that this little difficulty could be sorted out in our future relationship with the EU should cease and desist from propagating that nonsense as well:

    http://johnredwoodsdiary.com/2019/02/09/the-irish-border-2/#comment-994468

    “It should be obvious that the Irish government would NEVER willingly agree to any future replacement for the present backstop which did not have a similar legal effect of keeping us subject to swathes of EU laws. This is not a problem which could be solved through our future relationship with the EU, as some airily claim, because the Irish government would have the power to veto any future relationship which freed us from the shackles of the backstop.”

    http://johnredwoodsdiary.com/2018/12/04/lets-take-control-of-our-economy/#comment-978333

    “Here is something that Leo Varadkar said in the Irish Parliament recently …

    “… the best outcome would be for the UK not to leave the European Union at all … An alternative solution would be for the UK to stay in the Single Market and the customs union … ”

    and of course to a large extent that alternative solution is what Theresa May is agreeing to give them, to our detriment, so why should they ever agree to some other, less favourable, alternative arrangement to keep the border open?

    Ireland would have a veto over any future treaty between the EU and the UK which might replace the ‘backstop’, just as Wallonia had a veto over the EU deal with Canada; so why should it ever willingly release the UK from the rules of the EU Customs Union and the EU Single Market which work in its favour?”

    • MickN
      Posted February 12, 2019 at 2:01 pm | Permalink

      I think a toll of say £500 for every lorry from Ireland that uses the UK as a shortcut to the continent after Brexit would seem extremely fair to me. If ever a politician has overplayed his hand it is surely Verukka. It also seems that he is almost as popular in Ireland as Macron is in France.

    • Know-Dice
      Posted February 12, 2019 at 2:37 pm | Permalink

      Denis, I think we all know that Mrs May/The EU will come up with a small tweak that means nothing and she will expect all the lemmings to vote for her Withdrawal Agreement.

      The Withdrawal Agreement is rubbish from start to finish & The Political Declaration is a wish list that will never be delivered, let alone all the extra delay…

      And as you say there is no incentive whatsoever for the ROI to agree anything that would let the UK out of the Backstop.

    • Stred
      Posted February 13, 2019 at 8:50 am | Permalink

      The government website advising businesses how to carry on after April 1st is interesting. Pretending to be a lorry driver driving loads to the EU reveals that I would need an ECMT permit whether there is a deal or no deal. However, these are limited in number and it is too late to get one for 2019. The Commission is thinking of waiving this but it needs approval of the EU Parliament and Council. We don’t require anything different for EU drivers to come here. These people are our friends?

  23. Butties
    Posted February 12, 2019 at 11:07 am | Permalink

    Missing from all of this is what are “The Limits to Growth”? Club of Rome report of the 1960’s refers.

  24. Butties
    Posted February 12, 2019 at 11:10 am | Permalink

    If you did an accountancy of all World Debts who actually is in debt and what are we proposing to do about it?

  25. Bryan Harris
    Posted February 12, 2019 at 11:16 am | Permalink

    Sorry – This is slightly off-topic, and too long, but I wanted to share my response to my MP regarding the much hyped speech by Ivan Rogers, denigrating our ability to survive a No-Deal:
    ~~~~
    https://www.ucl.ac.uk/european-institute/sites/european-institute/files/sir_ivan_rogers_lecture_ucl_22012019.pdf….
    ~~~~~~~
    I attach my comprehensive reply:
    ~

    Thank you, again, for the link you sent. I can now see how Parliament has been led astray in the Brexit deliberations. The content of the link is typical of the efforts made by the establishment to defraud us with propaganda,

    This speech by Ivan Rogers is comprehensive, in that the extensive rhetoric is full of hyperbole, insubstantial in many aspects, but with a great deal of conjecture that does not rely on too many facts.

    Much of his argument is based on the concept that we would lose a large proportion of the trade we do with the EU, and would definitely lose £90B in exported services, stating; ‘This is as much as our exports to our next 8 biggest export markets put together’, which is deceptive given that we are limited by EU rules and tariffs, certainly on imports. We could increase our export capability 10x after Brexit, free of EU constraints.

    He insists that simply due to it’s size, the EU would dominate us in any case in terms of standards, but forgets that the world is a large place, and counties adhere to these restrictions for the EU only. None of this constrains us from setting our own superior standards for other countries we export to or import from. We have shown that we can affect EU standards by declaring that on a future date only electric cars will be sold in the UK. He forgets, also, that there are many countries out there all too eager to trade with us, without imposition of alleged merit, or standards as the EU call them.

    Being an avid Europhile, he fails to present a balanced view, and indeed doesn’t follow through on his many assumptions, simply stating them as facts. The style of the speech delivers possibilities as though they there the only result, but frequently omits alternative outcomes. It seems that he wants to map all the contours of our current relationship with the EU and try to replicate them whilst claiming we have in some technical sense left the EU, in tandem with so many others. The self evident situations he speaks of become confused as he attempts to justify that description of them.

    While making much of what we would lose with a no-deal, Rogers seems to think that the innovation that has kept Britain surging ahead, constantly, is dead and buried, and that we would never recover from such a ‘disaster’. He clearly welcomes the approach by the EU to punish us at every turn, but forgets that we can retaliate. His dismissive words show how clearly he has been taken in by the EU, and adheres to their practices; ‘we will never be a global rule setter’, for example is another of his put-down quotes.

    With a clean Brexit, we would be able to set our own tariffs, and could certainly ‘punish’ the EU for any hurtful measures, or blackmail, they impose on us. If the EU tried to put a stop to our services industry, we could raise import duties on luxury EU goods accordingly. That concept doesn’t sound too friendly, perhaps, but it would soon get the EU around a conference table. As for further negotiations, just what are the things we can get the EU to agree in April and May that we cannot get them to agree in February and March? Now we hear that 100,000 German jobs are at risk from Brexit – That should focus minds in Brussels. https://www.welt.de/wirtschaft/article188506313/Brexit-100-000-Jobs-in-Deutschland-bei-hartem-Ausstieg-in-Gefahr.html

    The most offensive aspect of Roger’s speech is that it draws us away from what Brexit is truly about. It puts constant emphasis on what we would lose. It emphasizes everything bad that could happen, and totally ignores the benefits of us becoming our own national state again.

    For too many years, we have suffered bullying from the EU. How many times have we cringed as a nation when one of our PM’s was slapped down or humiliated by the EU elite?

    How many times have we seen our own standards overridden by inferior EU ones, or legislation imposed on us that made us worse off, or was totally unnecessary?

    Why do we have to suffer the imposition of the socialist political correctness we get from the EU, and aren’t we sick of providing funds for infrastructure in Spain and Portugal, while ours crumbles? I’ve lost count of the Spanish airports built with our taxes that had to be mothballed.

    We all know how the EU works, how inept it is, how dictatorial it is, while bestowing favours on some. It is far from fair, decent or honest. Why do we want to stay shackled to such a tiresome, contrary, ruthless and unjust despotism, when we could have a real future, making our own decisions?

    How is it possible that so many want to reject this great opportunity to redefine our position on the world stage, and remain bound to the whims of an oppressive regime that cares nothing for us or democracy? Is it because they have failed to consider at all what our future would be like if we get sucked into this awful stasis agreement.

    It is hard to believe that our MP’s would so easily surrender our future, when they know all too well what is coming, and the plans the EU have made already, never mind the secret ones;

    – ever more restrictive laws;

    – overcrowding of our land with ever more immigrants;

    – an EU army, with subscription;

    – the UK paying ever more of our taxes and resources to support corrupt EU spending.

    Never mind that our infrastructure is failing, the NHS is already buckling under the strain, and we are all expected to pay ever more taxes to support this lunacy.

    We now hear that May is ramping up support for her ‘deal’, which is bad enough – but leaving the final vote to take place on March 26th suggests other things are afoot. What should be clear to all in Parliament, despite aggressive scare stories like this from Rogers and others, is that the end game is due. We cannot go on negotiating for ever more. The government has had more than 2 years to make sure a no-deal Brexit will not cause problems. It is time we bit the bullet.

    ~

    • Denis Cooper
      Posted February 12, 2019 at 4:01 pm | Permalink

      I’m afraid he is typical of the breed of senior civil servants which has emerged by a process of natural selection over the past half century, during which period anybody who overtly exhibited patriotism/nationalism/euroscepticism would be far less likely to rise through the ranks. However as Steve Baker found out we are not allowed to say anything like that about our wonderful impartial civil service which is always working so hard and so well in the national interest.

    • Rien Huizer
      Posted February 12, 2019 at 5:14 pm | Permalink

      @ Bryan Harris

      The Rogers peech you refer to did not say that the UK would lose all of its services exports to the UK, only that it would ne affected negatively and depending on the type of future arrangements (imo ranging from hostile/competitive to friendly/cooperative) the current surplus would decline somewhat or a lot. It is very hard to get more detail about those services exports. For instance the treatment of banking charges (interest, fees etc) that are not really reflective of a service and probably not location-specific, versus the treatment of, say consulting fees. There is a feeling in the UK that “the City” is a unique “English” pillar of strength. But, like Sunderland for Nissan cars, it is a location for mainly foreign owned financial firms. If London becomes less attractive as a location, they will move and that gigantic supporting system of law firms, consultants, experts etc would have to move too. Keep in mind also that a very high proportion of the workforce in the City is foreign. We (my friends and associates) have not been able to get a picture of what is likely to happen under various scenarios. Likely is that a not-deal brexit would be managed by temporary measures agreed between the UK and EU supervisors (banking, insurance, securties etc). Long term it appears that an unrepaired no-deal would require the City to find other markets. The financial technology is extremely portable but regulatory and tax environments play a more important role than proximity. At least less so than in the past.

      As to manufacturing and farming, the adjustments would be enormous and I believe that that is widely underestimated. Not trhat people would not be able to buy fresh produce and that kind of nonsense, but that farmers would be wiped out by the preferred US form of FTA and multinationals manufacturing in Britain for the EU market would simply run their facilities down or relocate quickly. When a location loses its appeal, very predictable things happen, but, as with manufacturing in the US Midwest, the locals tend to be too optimistic.

      Anyway, I do not want to criticize your work, it must have taken a lot of time and research…

    • Andy
      Posted February 12, 2019 at 5:42 pm | Permalink

      Who to believe …..

      Sir Ivan Rogers – who knows more about Europe and trade in his fingernail than you all do combined – or you?

      Tough one.

      • Edward2
        Posted February 12, 2019 at 10:47 pm | Permalink

        I’m with Denis

      • Bryan Harris
        Posted February 13, 2019 at 8:48 am | Permalink

        I may not be an expert on trade, but it is easy to pull apart the bias that people like Rogers portray…. not to mention his half-truths

    • Chris
      Posted February 12, 2019 at 7:02 pm | Permalink

      I believe Rogers’ stance may be supported by one Richard North? North was apparently scorned/rejected by the Brexiteers, (at least Flexcit was not accepted) and I think since then he has ensured that he has been a powerful force against those who want Brexit. I would like to think I am wrong, but I fear I am not.

      • Denis Cooper
        Posted February 13, 2019 at 6:39 am | Permalink

        You are not wrong.

    • James
      Posted February 12, 2019 at 7:44 pm | Permalink

      Bravo Bryan, well said.

  26. Toy Banks
    Posted February 12, 2019 at 11:34 am | Permalink

    “Greek and Cypriot output remains miles below the 2007 levels”
    They availing themselves of EU open borders export their capital on two legs.
    Usually the more enterprising or intelligent “money”

  27. Mr Ison
    Posted February 12, 2019 at 11:37 am | Permalink

    Aye, i know, the days when public service broadcasters did their bit, now, not so much.

    I’d also like to suggest cycling proficiency in our schools, more cycling equates to less reliance on foreign fuels.

  28. Rien Huizer
    Posted February 12, 2019 at 11:48 am | Permalink

    Mr Redwood,

    There is nothing the EUR can and should be doing about cyclical variations. One should keep two things in mind. First, the EUR regime protects taxpayers against predatory governments, be they socialist or otherwise “redistributive”. Having a system similar to a gold standard (ie a currency beyond the control of politicians is a very good complement to well en forced property rights. Second, if one looks at what this cyclical downturn represents, it is mainly three things. In germany and other Northern countries, the adjustments going on in the car industry affect current output. Also, labour consitions are extremely tight in the most industrialised regions (in essence a band running from the Benelux delta, alongh the Rhine and tributaries, the Danube and across the alps to Northern Italy. It takes time to move employment towards regions where labour is apparently abundant. Finally, the very close integration between the German and Chinese car industries suffers from efforts underway in China to reduce demand for certain types/makes of cars. That affects Japan and Korea too. Finally, the fluctuating probability of a problematic (from business perspective) brexit reduces current demand for capital goods and industial services and not only in the UK.

    Assuming that the UK will enter into a two year transition period, China implements spending discipline and reverts to 7% growth and the car industry reverts to producing cars that match customer expectations (less diesel, more petrol, hybrid and electric) one should expect reversion towards a trend of 2% growth per member of the labour force. For countries with a shrinking active populations (ie assuming no significant immigration) that trend will be below 2%, obviously. Monetary policy is completely ineffective against thse causes of fluctuation and would only risk monetary and exchange rate turbulence.

    The fiscal stance of some EU countries could be looser. However, countries aiming for a smaller role of government debt in funding government production and also a lower level of government production, will follow policies that others might call “austerity”. As it appears, electorates in Germany, Holland and the Nordics are very happy with such an approach, while the southern government must complete their marker reforms before they can be released from the stability pact. One reason why the French policy of being close or over the SP targets, is that France is reforming in a dramatic (and long overdue) way, as indicated by social pain reflected in the yellow vest phenomenon. Italy othe other hand, has a much more hedonistic approach (until the 5 star pehomenon will have been discredited as charlatanesque and fraudulent as appears to be the cause) is still far removed from fiscal discipline.

  29. Drum beat
    Posted February 12, 2019 at 11:51 am | Permalink

    “the Germans and the other richer surplus countries decline to send more grants and cash to the poorer parts”
    Marry, the rising AfD-type parties throughout the EU and the Left disintegrating into Greens as in Germany particularly, instability is here on all tiers of analysis.
    All is compounded interactively to the overall negative with virtually deserted countries such as Greece, Latvia, Lithuania and others.

    Germany, she cannot tolerate severe recession. It is not an orderly course of life for them. Traditionally they do much more than moan about it.

    Trouble building in the EU with reports from Sweden of internal disintegration the like of which we have not seen since the 1930s. At the moment Sweden reminds me of the movie Cabaret, though the powerful young singer in this case is a tad younger and practicing the folky tune for the first performance. We shall hear it soon no doubt. Also a fantango from another EU state is likely though by definition we shall not hear it. Not yet

    • Mitchel
      Posted February 12, 2019 at 4:26 pm | Permalink

      The other day I was reading a review of a book by the great historian of the Soviet Union,Sheila Fitzpatrick,about her late husband who was Latvian.Hard to believe now but Riga(the capital) was the fourth largest city in the entire Russian Empire and one of the largest cities in Eastern Europe a hundred or so years ago.

      Ukraine’s population had already declined by c20% since the dissolution of the Soviet Union even before the Crimea/Donbass events and has almost certainly fallen significantly further since.No-one seems to know because no census has been taken for many years.

      With Europe in decline and Russia turning to Asia,the region is becoming a wasteland albeit one equipped with very nice EU-funded new roads,railtracks and bridges!

      • stred
        Posted February 13, 2019 at 10:18 am | Permalink

        Ukranian seems to be the second most common language in our local park, the first being Essex.

  30. Martin
    Posted February 12, 2019 at 12:24 pm | Permalink

    Slowdown might be the best, could be good for the soul, allow people to pay off domestic and personal debt, give us a chance to learn not to borrow so much and then to work harder if we want to buy something, just like back in the 1950’s.

    Back i the 1960’s I remember it took a ship 45 days to get from UK to Australia or NZ, that was at the grand speed of 14 knots and I know that ships travel at faster speeds today, but nevertheless not that mush faster. So with 45 days to go before leaving the EU, presumably the time is coming soon when a British ship will leave our waters for OZ with EU membership rules only to arrive in OZ without EU membership and so then not protected by EU OZ trade deals. I suppose that ship might then have to go to anchor for a period of time until it’s all worked out according to WTO rules

    • Edward2
      Posted February 13, 2019 at 8:04 am | Permalink

      Perhaps UK and Australia and New Zealand will just agree to carry on using the same rules for imports and exports they currently use.

      Whilst also agreeing to have discussions on what changes (and improvements) they all might want to see.

  31. Denis Cooper
    Posted February 12, 2019 at 12:25 pm | Permalink

    This is interesting:

    https://www.irishexaminer.com/breakingnews/business/haulier-times-from-ireland-to-eu-may-triple-903493.html

    “Haulier times from Ireland to EU may triple”

    That’s because:

    “The landbridge is the quickest route to market, and three times quicker than container shipments. After Brexit, the landbridge will be compromised, because of multi-agency checks at ports and new administrative red tape, which ultimately increases costs.”

    That’s us here in Great Britain, as far as Irish hauliers (and politicians) are concerned we are just a convenient “landbridge” to the continent. However:

    “… hauliers will have to operate under the Common Transit Convention (CTC) … ”

    and that introduces complications, such as:

    “If there are no offices of transit, how will French authorities know that the Irish products have travelled under the CTC? Essentially, the trust in the chain is broken.”

    Well, of course we already know from Michel Barnier that we will no longer be trusted once we have left the EU:

    http://johnredwoodsdiary.com/2019/02/08/the-eu-talks-are-not-going-anywhere-lets-table-a-free-trade-agreement/#comment-994295

    so it will make no difference whether or not we set up offices of transit, that is of course unless their operations are “subject to the EU governance structures”.

    On the other hand presumably trust will still remain strong between Ireland and France, as they will both still be EU member states and so both still “subject to the EU governance structures”; so how about getting the Irish parliament to pass a new Irish law to make it an offence for hauliers taking consignments of goods from the Republic to the continent to circumvent any aspect of the CTC system, with the French authorities and the Irish authorities then co-operating closely to enforce that new law?

    Then they could just ignore our untrustworthy trading authorities while using the roads that we have paid for to carry on with their continental trade.

    • acorn
      Posted February 12, 2019 at 4:55 pm | Permalink

      I am confused here Denis; the UK signed up for post-Brexit CTC membership last December?

      “The UK is currently a member of the CTC while it is in the EU, and has successfully negotiated membership in its own right after Brexit. This would apply to any new trading relationship with the EU or in the unlikely event of a no deal.

      https://www.gov.uk/government/news/uk-to-remain-in-common-transit-convention-after-brexit

    • Sir Joe Soap
      Posted February 12, 2019 at 5:08 pm | Permalink

      Yep can’t see how it can work for Ireland. You can’t have a watertight single market structure on the island of Ireland only for it to be severely compromised by some untrustworthy British oik swapping real chicken on its way from Ireland to France for chlorinated chicken overnight at Membury services!

  32. ian
    Posted February 12, 2019 at 12:48 pm | Permalink

    In answer to Caterpiller reply yesterday.

    Brexit was never going to be just one vote and is done, that was quite clear the day after the vote when the first rat left the ship and retired and run for the hills.

    Most people in the UK have decided to make Brexit their last stand against the ruling classes and elite with their puppet politicians, central bank and treasury that make thing happen for them alone while taking away your freedoms with your standard of living and services.

    Brexit was always going to be a long haul due to the fact that you have 470 MPs against it and 550 lords on top of the rest of the establishment, councils, media and so on, even if you end up winning this round for Brexit and leave the EU nothing much is going to change due to your voting habits. A new party has started for Brexit already which is a start, anybody in Tory party associations thinking they be able to pick the next leader of the party will be disappointed, they only slaves to the elites puppet politicians they run around after.

    Brexit is a life long ambition of the people of the UK and will carry on for many years, it will get easier as time goes by as the depression take hold and people want the puppet politician gone.

    None voters have won every election the country has ever held if they were a party and at the next election i see even fewer people wanting to vote for the same old politicians and parties with another win for none voters, none voters refuse to give the green light to parties and their puppet politicians control by the elite in this country and won’t sanction the way this country is run by the ruling class, but the time will come when even they cannot take any more and vote for freedom in any way they see fit, you see, by 2030 you will be right in the middle of the depression that central banks have been trying to hold back for the elite as they have been amassing their wealth on the backs of the people and leaving them to pay off their debt with nothing jobs due to globalization and climate change crap, its a rerun of the last century depression of the twenties and thirties.

    So yes I see more trade deals to be done with other countries as time goes on, but the irony is, nobody in the working classes will have any money to buy things with as central banks and treasury end up a busted flush, last time they went to war to get rid of millions of people and give rest something new to think about, but this time it more like big brother as they are taking over the army’s and the police force on the pretence of protecting themselves from invaders, but it really about protecting themselves from their own people and is happening in all western countries and the EU as they take over the 27 arm forces in Europe.

    • Chris
      Posted February 12, 2019 at 7:06 pm | Permalink

      I believe, ian, that President Trump will upset the dynamics of the cosy political elite. The battle is not only here in UK and Europe mainland, but global, and P Trump is putting some very strong/powerful markers down both in the US and wider world. I believe he will be our saviour, ultimately.

  33. Ronald Olden
    Posted February 12, 2019 at 12:51 pm | Permalink

    WHY SHOULD GERMANY send its’ surpluses to countries which wilfully refuse to put their houses in order?

    Germany has surpluses because it, and its’ government and consumers behave responsibly and act in their own long term national interest. It is not in anyone’s national interest to borrow – borrow – borrow and spend – spend – spend the way John Redwood is always demanding we do even more of here.

    The proper place for Germany’s and other successful economies’ own surpluses are in repaying their own usually modest National Debt and in cutting taxes.

    If these debt ridden wrecks refuse to live within their means, they should leave the Euro or not have joined it in the first place. Thye dodn need to [put taxes up. They need to CUT spending.

    France will be the next is this line up of ruin. It’s national debt is around 100% of GDP, has a population which flatly refuses to live in the 21st Century, insisting on electing a President who says he wants to. and rioting when he tries to do what they say they want.

    • A.Sedgwick
      Posted February 12, 2019 at 5:05 pm | Permalink

      You are outlining why the EU is doomed. Had the Euro never existed the DM would have been much higher and surpluses much less. The other large economies of the EU have always been “idiosyncratic” and were arm twisted to keep the federal faith with many blind eyes accepting their admissions with obvious results of mass unemployment particularly for young people. A fact Remainers seem quite happy to ignore. One thing for sure the EU are not all in it together.

    • Edward2
      Posted February 12, 2019 at 9:24 pm | Permalink

      Because Germany benefits from an overall Euro exchange rate which gives it a 30% advantage.
      It gains this due to the currency markets valuing the Euro well down because of the poorer performing nations and the negative risks of Euro nations like Greece and Italy.
      It gives Germany many billions advantage every year.
      If you look at a proper union like USA the central federal government transfers money from rich states to poor states.
      The EU recoils from doing this as Germany’s current reluctance to continue funding shows.
      This is the crucial weakness inherent in the Euro.

      • margaret howard
        Posted February 12, 2019 at 11:44 pm | Permalink

        Edward2

        “The poorest countries received about 25% of overall EU expenditure in 2014, according to the European Commission.
        Bulgaria is the poorest member state in the EU (as measured by GDP per capita), followed by Romania, Croatia, Poland and Hungary.
        Together, these countries received about 25% of overall EU expenditure in 2014, according to European Commission figures.
        Poland is the largest net recipient.
        It received €13.48bn (£10.41bn) in 2014 and was followed by Hungary, Greece, Romania, and Portugal.
        A large share of this EU money is invested through the European Regional Development Fund, European Social Fund or the Cohesion Fund.
        These support a large variety of regional and local projects.”

        https://www.bbc.co.uk/news/uk-politics-eu-referendum-36322484

        How much do rich New England states, for instance, give to say, Alabama, Louisiana etc?

        Reply Reply In single currency single countries like US and UK the transfers are many times the EU levels through a unified welfare and local government system

        • Edward2
          Posted February 13, 2019 at 8:13 am | Permalink

          Margaret
          I am well aware of the transfer of funds from the 9 members who pay in to the other 19 who don’t pay in.
          The point I was making was how the Euro creates a huge advantage for Germany but austerity and unemployment for many others.

          When member states have some good economic news you say it is because of the EU but when they have bad news you say it is the fault of the individual member nations.

  34. Mr Ison
    Posted February 12, 2019 at 1:19 pm | Permalink

    Aye John, your leader wants her deal and her successor in opposition, it’s never been about Britain or the Labour party or the Conservative party for her.

    It’s only the money.

  35. Davek
    Posted February 12, 2019 at 1:25 pm | Permalink

    Listening to the PM today she’s still talking about negotiating on the WA with the EU..She wants to reopen negotiations withbthem..the mond boggles

    • Know-Dice
      Posted February 12, 2019 at 3:01 pm | Permalink

      She is just proving that Einstein was right –

      “Insanity is doing the same thing, over and over again, but expecting different results.”.

      Or maybe that should be changed to “Insanity is believing that a British Prime Minister can negotiate with Brussels and achieve any meaningful change”…

    • Andy
      Posted February 12, 2019 at 5:45 pm | Permalink

      No she doesn’t. She wants to run down the time until the choice is effectively only her deal.

      The Commons has already indicated a no deal will not happen. So it’s May’s deal or no Brexit.

      Brexit means May’s deal. Rubbish – isn’t it?

      • Edward2
        Posted February 12, 2019 at 10:49 pm | Permalink

        Poor analysis Andy.
        Brexit is written into law.
        On the 29th March we leave.
        If her deal cannot get voted through Parliament it will happen by default.

      • mancunius
        Posted February 12, 2019 at 11:31 pm | Permalink

        Spelman’s no-deal amendment (passed by only seven votes) is not binding, nor is it legally enforceable, as it would need the repeal of the Withdrawal Act 2018. That is simply not going to happen except in your vivid imagination.

        And as the UK leave date of 29 March depends on a treaty with 27 sovereign foreign powers, the Commons has no more unilateral power to insist on an extension of Art. 50 than it has to order warmer weather.

    • hardlymatters
      Posted February 12, 2019 at 7:26 pm | Permalink

      She said today that talks with the EU are ongoing and yet Guy Verhofstadt asks what talks? He said he knows nothing about talks, so somebody is telling porkies

  36. ukretired123
    Posted February 12, 2019 at 3:23 pm | Permalink

    The UK has been able to regulate itself independently unlike the southern EU countries who have to follow the ‘one size fits all’ economies of northern EU.
    This is another example of why we need to take back control of everything else the EU currently dictates to us, our borders, our immigration policy, our laws and our contributions direct and indirect.
    Remainers need to visit the southern Euro areas and see the hardship inflicted upon them to believe just how unfair the EU system actually is. Failing that, the yellow vests testify to what is happening on the ground. I am surprised Jeremy Corbin hasn’t been raising this on behalf of the UK, but then JC seems to be on a fence unlike his previous criticism of the EU.

  37. margaret howard
    Posted February 12, 2019 at 4:17 pm | Permalink

    JR

    ” one of the reasons why populist parties around the continent are making progress electorally. ”

    Lucky Europeans! Having proportional representation where minority parties can play a part in politics.

    Meanwhile we are lumbered with an undemocratic, brutal, primitive first past the post system of 2 parties who dominate forever with millions of voters disenfranchised.

    Reply Our system allows third parties to do well if they are popular, whilst the populists as with the Italian governing coalition and the parties in Poland and Hungary poll enough of the votes to do well were they in a FPTP system

    • graham1946
      Posted February 12, 2019 at 7:37 pm | Permalink

      Reply to reply

      Sir John,

      Unusual for you to twist facts.

      Even you with an axe to grind (keeping the legacy parties in perpetual musical chairs) about FPTP cannot believe that tosh. Popular parties can thrive under FPTP?

      What about 4 million votes for UKIP and one MP against less than that for the Scots Nats, Plaid, DUP, Lib dems who all together polled less. Democracy it ain’t.

  38. Den
    Posted February 12, 2019 at 4:51 pm | Permalink

    The rain in Spain is now falling on the EU parade. Do the Southern EU States,with ultra high youth unemployment, not now see their folly in joining the Euro zone?
    It was devised by a German (As the EMU) for the benefit of Germany, as it would remove the FX penalty that the old D Mark carried over all other European Currencies. With no high exchange rate to temper their exports within the EU and ultra low interest rates hande to members, Germany boomed and kept on booming while the Southern States suffered without the FX currency hedge to maintain their competitiveness.
    Same ol’ story with the EU. They believe that one size will fit all and still do nothing about it but permit even more borrowings, to cover the current account and trade deficits. Therefore, it can only end badly and I trust it will not affect the British Taxpayers.
    However, given with our weak leadership that is dominated by the Europhile Mandarins, I shall not hold my breath. But can we afford an EU Bail out as well as HS2? LOL.

  39. Dunedin
    Posted February 12, 2019 at 7:20 pm | Permalink

    The weaker EU economies will be in an even worse state when they cannot export their unemployment to the UK.

    • margaret howard
      Posted February 12, 2019 at 11:36 pm | Permalink

      Dunedin

      Which weaker EU economies? On the whole they are doing rather well with the euro area at 1.20% growth against our 1.30%

      Doing particularly well are Spain and Netherlands at 2.40%, Poland at 5.10%, Ireland at 4.90%, Portugal 2.10% and even Greece doing better than us at 2.20%.

      https://tradingeconomics.com/

      Reply The Netherlands is a strong econ9my. Greece still has GDP 20% below 2007 levels with mass unemployment. Im glad we are not copying that.

      • margaret howard
        Posted February 13, 2019 at 5:40 pm | Permalink

        Reply to rely

        Why do you have to compare yourself with those at the bottom rather than the top? GREECE?

        Reply You were talking about the poorer members of the area!

  40. Original Richard
    Posted February 12, 2019 at 7:24 pm | Permalink

    To repeat something (approximately) that I saw recently concerning the Euro, but I don’t remember where :

    “I’ve been wondering, what that special place in hell looks like, for those who created the Euro without even a sketch of a plan how it would work with differing and weaker economies.”

    • margaret howard
      Posted February 13, 2019 at 5:42 pm | Permalink

      Original Richard

      Odd then that the euro has replaced the pound as the world’s reserve currency.
      Furthermore in the last two decades the pound has dropped like a stone in value to the euro. Why?

      • Edward2
        Posted February 13, 2019 at 7:30 pm | Permalink

        I’m not sure where you get your stats from Margaret
        Since 2012 the pound has gone up against the euro.

        During the time the Euro has existed the pound has moved from 1.60 to nearly 1.00
        All due to brexit obviously.

        • hans christian ivers
          Posted February 14, 2019 at 3:24 pm | Permalink

          Edward 2

          You really need to look a this over the long term.

          Since the EURO was created it ahs gone form 1.50 to 1.15 r the Pound, that tells it’s own story and you should really know better

  41. Chris
    Posted February 12, 2019 at 9:00 pm | Permalink

    Tory Brexiter MPs may well be alarmed by this (re Olly Robbins and his Brexit plans):
    https://blogs.spectator.co.uk/2019/02/what-olly-robbins-has-revealed-about-mays-brexit-plan/

    The last sentence by Peston in the above article, if true, indicates that OR through the arrogance that comes with power may have just boasted too loudly. My initial reaction is how dare this man determine what type of Brexit we are going to have i.e. that Brexit does not necessarily mean Brexit at all? Why does he apparently have the power to override what we voted for?

    • rose
      Posted February 13, 2019 at 3:20 pm | Permalink

      Because the PM seems to like having a taller, younger man around telling her what to think and this is the one she has chosen for the time being.

  42. Lindsay McDougall
    Posted February 13, 2019 at 1:19 am | Permalink

    For the UK, a temporary slowdown is likely for the next two years, as trade with the EU-27 becomes more difficult and trade with other countries takes time to build. If only EU rules had allowed Liam Fox to sign new trade deals in advance of our leaving, the pain would have been less. We must keep our eye on the ball. The non-EU economy is growing nine times faster than the EU economy.

  43. Peter Martin
    Posted February 13, 2019 at 7:48 pm | Permalink

    “The Central Banks of the USA, Euro area, UK and China have all been slowing the economies they regulate.”

    Why does anyone think a central bank can successfully regulate an economy over the longer term? All they can reasonably do to stimulate the economy is encourage credit creation – primarily by lowering interest rates. If an individual borrows money it doesn’t give them any extra purchasing power over the longer term. Any increase in the shorter term is offset by a decrease in spending power later.

    So, inevitably, a period of high growth caused by private credit creation will be counterbalanced later by a period of low or negative growth due to debt deflation.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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