Reply to: Brexiters plaintive fall back argument: "You can't predict the future"

[sasguru]

PWC do.

https://www.pwc.co.uk/economic-servi...uk-economy.pdf



see 2.4

"Based on our modelling of the five types of impact discussed above, we estimate that the level of real (i.e. adjusted for inflation) UK GDP in 2030 could be around 1.2% lower in the FTA [i.e. soft Brexit] exit scenario than in the counterfactual (i.e. without an EU exit) and around 3.5% lower in the WTO [i.e. hard Brexit] exit scenario. After adjusting for
population changes in the different scenarios, we estimate that average real GDP per capita could be between 0.8 and 2.7% lower in 2030 in the two scenarios.

We looked at the impacts over the period to 2030 as this is a time horizon over which the short-term uncertainty relating to post-exit arrangements should have largely
dissipated and the UK economy would have had time to adapt to a new relationship with EU countries.
As set out in Table 2.1, these longer term impacts on real GDP are driven primarily by trade and migration effects.
Limitations on free access to the EU Single Market, and the resulting tightening in trade terms with the EU, would be expected to reduce exports and GDP. The migration impacts could lead to a lower number of working individuals in the UK, which would havea negative impact on GDP, although the effect on GDP per capita would be smaller as shown in the final row ofTable 2.1
The estimated impacts vary over timeas illustrated in Figure 2.1 and Figure 2.2. There is a significant short-term impact of around 3% to 5.5% of GDP by 2020 due in large part to the effect of uncertainty, and then a longer term impact of between around 1.2% and 3.5% on GDP in 2030 once the initial impact of uncertainty has faded away. "


I've highlighted the PWC prediction under a hard Brexit (i.e. WTO) and it seems substantial and long-lasting - reduction of 5.5% of GDP in 2020 and a slight improvement to a fall of 3.5% by 2030. Let's round these figures DOWN to 5% and 3% respectively:

SO lets take the 2020 figure - fall of 5% of UK GDP (about 2.6 trillion) = a whopping 135 billion a year
If we take the 2030 figure - fall of 3% of UK GDP per year = 81 billion a year

To get some perspective the UK contribution to the EU after rebate is 8 billion a year.

Not sure how this is good news to be honest, lets say 100 billion odd being wiped off UK GDP year on year for 10 years and beyond
This will essentially consign the UK to the bottom rung of EU countries.

But I find it encouraging that Brexiters are starting to engage with numbers and figures rather than brain farts.

[vetran]

No answer from vetran? I wonder why.

I was busy doing your missus, don't be surprised if she is in a good mood this afternoon.

Actually I had something important to do.

[vetran]

WIll the economy bounce back after a hard a.k.a real Brexit do you predict?

PWC do.

https://www.pwc.co.uk/economic-servi...uk-economy.pdf



see 2.4

[sasguru]

WIll the economy bounce back after a hard a.k.a real Brexit do you predict?

No answer from vetran? I wonder why.

[sasguru]

no its an economy in uncertainty. Once / if Brexit is organised then the economy may bounce back.

WIll the economy bounce back after a hard a.k.a real Brexit do you predict?

[vetran]

This is not an economy in rude health.

no its an economy in uncertainty. Once / if Brexit is organised then the economy may bounce back.

[Bean]

Welcome back. DId you go to sign on?

Nope, something called a life. You should look into it sometime.

[Bean]

Yes, but in your case, you're incapable of understanding the distinction - and that makes you stupid.

Unfortunately, you are not in a position to make that assessment.


Assguru didn't say that though, did he - he said 'not knowing', which is ignorance, not stupidity and therefore, it was stupid of him to use 'stupid' incorrectly and I stated as such.


Besides, he's basically admitted what I was getting at - that most normal people, don't claim to be able to predict the future, in any meaningful way related to the term;

If I could predict exactly, I would be a billionaire by now

HTH BIDI

[NotAllThere]

Not knowing the distinction between two things, would make someone ignorant, not stupid - ...

Yes, but in your case, you're incapable of understanding the distinction - and that makes you stupid.

[sasguru]

Still, it wasn't a bad attempt and I genuinely mean that.

Thanks. If I could predict exactly, I would be a billionaire by now. One can see trends based on causes, however.

With regards to the UK, I'm not surprised at a lower growth rate. Partly because recessions always come and go, the economy goes up a bit, goes down a bit, goes up a bit.

That is being disingenuous. There was a sharp fall in growth rate from top of the G7 to bottom immediately after the Brexit ref. No one argues about the cause.
1.x% growth rates are well below the UK post war average. The UK has never been bottom of the pack in a growth phase of the world economy, at least post 80s.

My prediction: The UK economy will continue to move onwards, slightly lagging behind the EU average, until the deal is announced at which point it will pick up. Regardless of what the deal is.

I suspect there won't in the end be a "real" Brexit, in which case you'd be right. Hard Brexit will lead a sharp acceleration of the current malaise though.

The government will inject a large economic boost in terms of tax cuts and increased spending in 2019/2020 in time to win the next election. It will be titled "The BREXIT dividend" ( regardless of whether there is a dividend, as that is utterly irrelevant ).

Ah yes the Trumpian short term fix.

[tomtomagain]

This is not an economy in rude health.

Not an economy in a recession either.

Still, it wasn't a bad attempt and I genuinely mean that. As you know, predicting is a mugs-game, especially about the future.

The US is pushing ahead, Trump's massive set of tax cuts seem to have done the trick. I expect he'll cut even more to make sure he gets a second term. After that, it will be someone else's hangover to deal with.

With regards to the UK, I'm not surprised at a lower growth rate. Partly because recessions always come and go, the economy goes up a bit, goes down a bit, goes up a bit.

And partly because we are in "Peak-Uncertainty" with regards to BREXIT.

BREXIT is 90% hot air and noise - from all sides.

My prediction: The UK economy will continue to move onwards, slightly lagging behind the EU average, until the deal is announced at which point it will pick up. Regardless of what the deal is.

The government will inject a large economic boost in terms of tax cuts and increased spending in 2019/2020 in time to win the next election. It will be titled "The BREXIT dividend" ( regardless of whether there is a dividend, as that is utterly irrelevant ).

And you can hold me to that.

[sasguru]

Let's look back at someone's prediction and give it a review.


Here's a random one I found that was made in July 2017 in this thread.



So what happened? Well, the BoE raised rates in November. ( A rise is on the cards for Thursday, I'm not going to predict whether it happens though :-) )

The pound, rather than plummeting, has remained stable against the USD.

Rather than rising, inflation has fallen from 3% in Jan 2018 to 2.4% today.

Consumer consumption has been up and down, although seems to be relatively "flat" overall. The high-street has of course been having a torrid time. But that's due to the ever-increasing impact of online retailing.

Well clearly we haven't had a recession, and I don't know what defines a "proper" one, it doesn't look like we'll have the 2 quarters of negative growth required this year to go into recession.

This bit is interesting :



The EU/USA are currently growing more quickly than the UK. Whether this is because of BREXIT uncertainty or Trumps massive tax-cuts or the fact that some EU countries have finally turned a corner from their post-2008 crisis is not clear.


All in all, not a bad prediction really. It was just mostly wrong that's all.

About half-wrong. Growth in 2018 is nothing to write home about: while the US is on an annualised rate of 4.x% we are on 1.x% if we're very lucky.
Point is Brexit has had a marked effect in growth : from top of the G7 mid 2016 to bottom now.
So I'd say a pretty good prediction, if not quite recession, growth this year really is bumping along the bottom. 0.1% in 1st quarter, unconfirmed 0.4% in 2nd quarter.

Re consumption: looks like the British consumer is borrowing to fund this:

https://www.theguardian.com/money/20...time-on-record

This is not an economy in rude health.

[tomtomagain]

Let's look back at someone's prediction and give it a review.


Here's a random one I found that was made in July 2017 in this thread.

Doesn't look like BOE can raise rates now. Problem is the US has a policy of "normalising" i.e. raising interest rates.
Which means the pound will plummet even further against the dollar and inflation will rise further as commodities are priced in dollars.

Or the BOE can raise interest rates regardless of the weak data.

Either way consumption - the primary driver of the UK economy - is going to fall.
Caught between a rock and a hard place.

I predict proper recession by next year or earlier - while the rest of the rich world will be growing.

So what happened? Well, the BoE raised rates in November. ( A rise is on the cards for Thursday, I'm not going to predict whether it happens though :-) )

The pound, rather than plummeting, has remained stable against the USD.

Rather than rising, inflation has fallen from 3% in Jan 2018 to 2.4% today.

Consumer consumption has been up and down, although seems to be relatively "flat" overall. The high-street has of course been having a torrid time. But that's due to the ever-increasing impact of online retailing.

A proper recession by next year ( 2018 ) or earlier.

Well clearly we haven't had a recession, and I don't know what defines a "proper" one, it doesn't look like we'll have the 2 quarters of negative growth required this year to go into recession.

This bit is interesting :

- while the rest of the rich world will be growing

The EU/USA are currently growing more quickly than the UK. Whether this is because of BREXIT uncertainty or Trumps massive tax-cuts or the fact that some EU countries have finally turned a corner from their post-2008 crisis is not clear.


All in all, not a bad prediction really. It was just mostly wrong that's all.

[sasguru]

Not knowing the distinction between two things, would make someone ignorant, not stupid - you stupid cretin

Come on, give the pigeons some more peace and list some examples for us to chortle at

Welcome back. DId you go to sign on?

[Bean]

Au contraire, it is. Some things are predictable, some are not. Not knowing the distinction is what makes you stupid.

Not knowing the distinction between two things, would make someone ignorant, not stupid - you stupid cretin

Come on, give the pigeons some more peace and list some examples for us to chortle at