Tag Archives: Brexit

Some people have been saying that sterling's fall has nothing to do with the Brexit vote. Sterling was already falling before the vote, they say, because of the UK's wide and growing current account deficit. So I thought I would fact check this.Here is the UK's current account deficit since 1987, courtesy of ONS: Well, ok, it has rarely been anywhere near balance in the current century, and it has been trending downwards since 2011.Now let's look at sterling. Here is sterling's...

Sterling is falling. Predictably, the financial press describe its slide as a "pounding" and gleefully tell us that sterling is the worst-performing currency after the Argentinian peso.But some people are cheering. Falling sterling is good for exports, isn't it? So if the pound keeps falling, the UK's large trade deficit will start to shrink, reducing the UK's dependence on external financing and hence its vulnerability to a "sudden stop".Sadly, it's not that simple. Falling sterling is not...

Well, this is fun. YouGov has asked the public which countries the UK's new trade negotiators (if and when they are recruited) should prioritise in their quest for free trade deals.Unsurprisingly, the US and the EU (considered as a whole trading bloc) came top of the list. But as ever, the devil is in the detail. These charts show the difference between the public's perception of the importance of a country versus its exports and GDP rankings: Now, of course the exports ranking is the...

There has been a huge amount of analysis about the reasons why British people voted to leave the EU. Some of it is very good: some of it less so, saying more about the biases of the writers than it does about the motivations of the British (no, I won't link any of those posts here!). I confess, I have added to the literature myself. I leave it to you to judge into which of these categories my contributions fall.But in all the vast verbiage written on this topic, there appears to be a...

The result of the EU referendum was a considerable shock - not just to the UK, but to the EU and indeed to the whole world. Just how big a shock it was is evident from the fact that the OECD has suspended its forecasts until September. It usually only does this for "significant unforeseen or unexpected events", such as a major earthquake or a tsunami. Brexit is a shock to the global economy of a similar order. And it has permanently changed the world. Whatever the future holds, we can be...

By William K. BlackJuly 5, 2016     Bloomington, MN NYT Editorial Decrying BREXIT – Part 7 The NYT editorialized against the BREXIT vote, just in case the six columns it printed attacking the vote might not make it clear where the editorial board stood.  The editorial explained what it saw as the basis for the vote. It was a cry of anger and frustration from more than half the country against those who wield power, wealth and privilege, both in their own government and in Brussels, and...

By William K. BlackJuly 5, 2016     Bloomington, MN The sixth column that the New York Time published on the same date condemning the vote in favor of BREXIT can be dealt with briefly.  It too attacked the legitimacy of democracy, which it presented as a threat to “representative government.” Steven Erlanger – Part 6 Steven Erlanger quoted with apparent approval this revealing quotation in his column condemning BREXIT. Bronwen Maddox, former editor of Prospect Magazine and the new director...

The Governor of the Bank of England's opening remarks at the release of today's Financial Stability Report were stark: At its March meeting, the FPC judged that “the risks around the referendum [were] the most significant near-term domestic risks to financial stability.” Some of those risks have begun to crystallise. The Governor was admirably calm and balanced in his press conference. But nevertheless there was a degree of schadenfreude about his remarks. Prior to the referendum, the Bank...

By William K. BlackJuly 5, 2016     Bloomington, MN Jim Yardley – Part 5 Jim Yardley wrote a column entitled “Populist Anger Upends Politics on Both Sides of the Atlantic.”  Yes, anyone in the UK who supported BREXIT is just like an American supporter of Donald Trump because they are angry.  Indeed, it’s “the same” as every non-establishment politician and political supporter throughout Europe and the U.S. The same yawning gap between the elite and mass opinion is fueling a populist...

By William K. BlackJuly 4, 2016     Bloomington, MN This is the fourth column in my seven-part series discussing the seven-barrel shotgun blast of articles that the New York Times published attacking the vote by those who favored BREXIT.  This column addresses Paul Krugman column on BREXIT. Paul Krugman [Part 4] Paul Krugman also wrote an attack on “populist[s].” It seems clear that the European project – the whole effort to promote peace and growing political union through economic...