UK credit outlook cut to ‘negative’. What will Osborne do?

osborne_2853802b

The decision from ‘Make-it-up-as-you-go’ Moody’s isn’t as bad a blow as it may seem.

George Osborne spent the first few years of the Coalition Government insisting that a ‘triple-A’ credit rating was vital to the UK, and we only had it because of his policies.

Then we lost it, and nothing changed at all.

It will be interesting to see what Osborne does in response, though.

Back in the day, he staked everything on that credit rating. Now it has gone up in a cloud of Brexit smoke.

Isn’t it time he evaporated too?

The UK has had its credit rating outlook cut to “negative” by the ratings agency Moody’s after the country voted to leave the EU.

Moody’s said the result would herald “a prolonged period of uncertainty”.

Meanwhile, PM David Cameron is under pressure to speed up “divorce” talks with the EU after Brussels said exit negotiations should start immediately.

EU head Jean-Claude Juncker said it was “not an amicable divorce”, but it was “not a deep love affair anyway”.

Source: EU referendum: Moody’s cut UK’s credit outlook to ‘negative’ – BBC News

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Jeremy Corbyn will NOT stand down after more than 100,000 sign petition of support

151103CorbynLeader

I signed the petition calling for Jeremy Corbyn to ignore the neoliberals and Blairites who want him to stand down.

If you haven’t, please do. It may be found here.

Jeremy Corbyn has said he will not stand down if there is a challenge to his leadership of the Labour Party.

He is facing a vote of no confidence over what some of his MPs called his “lacklustre” campaigning for Remain in the EU referendum.

He cited a petition urging him to stay on and vowed to fight to protect workers’ rights in Brexit negotiations.

He also announced a review of immigration policy and ruled out a new EU referendum if Labour wins power.

Source: EU referendum: Corbyn will fight any leadership challenge – BBC News

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Dark days for the youth of today in the 2016 UK EU referendum | Tuppence Magazine

160625 EU-referendum-vote-by-age-group

The source is actually YouGov, rather than YouGove (ha ha) – but the information is damning.

The voice of the young has been overruled by the elderly in the EU referendum – and there are plenty of reasons not to be happy about it.

Remember the controversy over whether to allow 16 and 17-year-olds the vote on the issue, on the grounds that they will be among those most affected by the outcome? They weren’t allowed the vote.

Instead, the decision to leave lies very squarely with the people who are least likely to live with the consequences – older and downright elderly people who are unlikely to be affected by the economic turmoil they have unleashed on their sons, daughters and grandchildren for the sake of – what? – a false notion of patriotism.

If you are an older person who voted ‘Leave’, now your teenagers really do have a good reason to resent you.

Thanks to mum, dad and uncle Knobhead, the 2016 UK EU referendum has narrowly swung in the favour of the Leave campaign plunging the pound to a thirty five year low and the FTSE down by 3% at the time of writing. The most annoying set of stats released to-date though confirm that it’s the older portion of the British public that were the deciding factor with more of them in the Leave camp, despite the fact that their kids and grandkids voted much more in favour of remain.

It feels like dark days for the youth of today when they’ll have to put up with the decision for a hell of a lot longer than the rents. It’s hard to foresee the extent of the ramifications of the vote leave decision in the referendum. The economy has already shown signs of volatility and with the full exit still to come, along with the prospect of Scotland possibly going its own way in the long run, we’ll be very surprised if there isn’t more fallout still to come.

Recrimination aside, it’s incredibly concerning that such a resounding proportion of the younger generation are now going to be completely ignored as a result of the vote to leave. If that isn’t tough enough to take, the fact that it’s a decision that feels incredibly final and damning means that we may well be stuck with the dark days for a long time to come.

Source: Dark days for the youth of today in the 2016 UK EU referendum

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The Brexit crash will make all of you poorer – says billionaire who has profited hugely

160625 crash

George Soros wrote this on Monday, before the EU referendum vote.

He’s known as the ‘billionaire who broke the Bank of England’ after his hedge fund profited hugely on the 1992 crash.

It is believed he has done so again after Thursday’s vote – but at least he tried to warn you what would happen! Read:

Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking. It would have at least one very clear and immediate effect that will touch every household: the value of the pound would decline precipitously. It would also have an immediate and dramatic impact on financial markets, investment, prices and jobs.

The Bank of England, the Institute for Fiscal Studies and the IMF have assessed the long-term economic consequences of Brexit. They suggest an income loss of £3,000 to £5,000 annually per household – once the British economy settles down to its new steady-state five years or so after Brexit. But there are some more immediate financial consequences that have hardly been mentioned in the referendum debate.

Sterling is almost certain to fall steeply and quickly if there is a vote to leave… After a Brexit vote the pound would fall by at least 15% and possibly more than 20%, from its present level of $1.46 to below $1.15 (which would be between 25% and 30% below its pre-referendum trading range of $1.50 to $1.60). If sterling fell to this level, then ironically one pound would be worth about one euro – a method of “joining the euro” that nobody in Britain would want.

The Bank of England would not cut interest rates after a Brexit devaluation (as it did in 1992 and also after the large devaluation of 2008) because interest rates are already at the lowest level compatible with the stability of British banks… There will be very little that monetary policy can do to stimulate the economy and counteract the… loss of demand.

Second, the UK now has a very large current account deficit – much larger, relatively, than in 1992 or 2008. In fact Britain is more dependent than at any time in history on inflows of foreign capital… After Brexit, the capital flows would almost certainly move the other way, especially during the two-year period of uncertainty while Britain negotiates its terms of divorce with a region that has always been – and presumably will remain – its biggest trading and investment partner.

Third, a post-Brexit devaluation is unlikely to produce the improvement in manufacturing exports seen after 1992, because trading conditions would be too uncertain for British businesses to undertake new investments, hire more workers or otherwise add to export capacity.

Source: The Brexit crash will make all of you poorer – be warned | George Soros | Opinion | The Guardian

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Brace yourself for the new recession, says economist

The FTSE 100 tumbled after it became clear 'Leave' would win the referendum - and has only recovered slightly. Further shocks may follow.

The FTSE 100 tumbled after it became clear ‘Leave’ would win the referendum – and has only recovered slightly. Further shocks may follow.

Richard Murphy, of Tax Research UK, wrote what follows a week before the result of the EU referendum was known – and predicted recession, with markets and the pound plummeting.

He assumed there would be another renegotiation of our EU membership (there won’t be, according to Mr Juncker) and he also assumed that both David Cameron and George Osborne would be out of a job by the weekend (only Cameron has gone at the time of writing) and any Tory administration that followed would be a ‘lame duck’. In those circumstances:

Recession is unavoidable. Investment in the UK will go on hold during renegotiation. No big business is going to sink millions or even billions into our economy without knowing what the future terms of UK trade might be. In itself this will be enough to trigger recession. Couple that with a planned withdrawal of certain parts of banking (those that need an EU regulatory base) from London and a downturn has to happen. Try as I might I cannot see where the stimulus happens. A sterling fall of 30% in recent years has not boosted UK growth so no one should respond by saying a fall in sterling us the counter-balance to all this. That will only create import induced cost push inflation, which is just about the last sort we want as it serves no domestic purpose at all.

Then, leaving aside the real risk of EU instability as a result of our vote, there is the risk of worldwide recession as global markets suffer the knock on effects of a fall in confidence in a global trading hub. This could be bad enough to make 2008 look like a picnic: that was about finance and this time the threat is to the real terms of trade, and that is much more serious.

The Labour Party would not be keen to seize power at such a time, he argues:

Do not expect Labour to want to take office, I believe they will be happy for blue-on-blue action to continue and  for the mess  to arises on someone else’s watch. The chance to say after 2020 that what they will have to do is clear up the mess they inherited, with a real justification for attributing blame in this  case, will be much too big to resist, in my opinion.

To be honest, I don’t see Labour opting out of office at any time, because the risk posed by any Conservative Government is too great.

Besides, isn’t there enough of a mess already? We’ve had the slowest (and worst) economic recovery since records began, coupled with a ‘vanity’ referendum that has caused upheaval in the value of the pound and the markets and is likely to cause the collapse of the UK as a nation made up of four countries.

Is it possible for David Cameron to have failed more utterly?

There is one sticking-point, as far as Labour is concerned, if Mr Murphy is correct:

The narrative of failure of neoliberalism has to be broadly agreed to challenge the backlash based in ingrained thinking that is still possible.

We know that there are still plenty of neoliberals in the Parliamentary Labour Party who would seek to blindly carry on following that failed philosophy if returned to office – two of them have tabled a vote of ‘no confidence’ in leader Jeremy Corbyn (very much not a neoliberal).

Mr Corbyn has rejected the call to quit, but he’ll need to clear his party of these backstabbers and bring in people who aren’t wedded to a failed and corrupt economic theory before he can hope to institute change for the better in our divided and damaged country.

Source: Tax Research UK » What will happen to the politics of the UK post Brexit?

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Is this Cameron’s last lie?

The liar: Cameron has even broken his promise to initiate decoupling procedures from the European Union immediately after a Brexit-supporting vote. [Image: Christopher Furlong/Getty Images ].

The liar: Cameron has even broken his promise to initiate decoupling procedures from the European Union immediately after a Brexit-supporting vote. [Image: Christopher Furlong/Getty Images ].


Hindsight is a wonderful thing, isn’t it?

Before the referendum result, David Cameron said he would invoke Article 50 immediately, if the UK voted to leave.

The UK has voted to leave, and Cameron has opted to quit instead. None of his likely successors have any intention of invoking the Article, which would require the EU to be shot of us within two years, in the foreseeable future.

Of course it isn’t his last lie – he won’t be replaced until September or October, and those months are still a long way away.

But, even on his way out the door, you can’t trust Cameron.

For all the drama the moment would bring, there would be no instant change. European Union citizens could still come to Britain to live and work without a visa. Trade with the single market would continue unimpeded. Brussels would continue to regulate bananas.

Instead, the process of decoupling would officially begin only when the British government chooses to invoke a previously unused provision of the bloc’s governing treaty, known as Article 50, that sets out the basics of the withdrawal process.

The most critical element of Article 50 is that, once invoked, it sets a two-year deadline for a negotiated departure. Beyond that, no one really knows how the process would work, since no country has ever left the European Union.

Moreover, it is up to the British government when to invoke Article 50, and it is not entirely clear whether Prime Minister David Cameron, who has led the campaign to stay, would stick to his stated plan to invoke it immediately if the country votes to leave.

Source: If Britain Favors ‘Brexit,’ Changes Will Come Slowly – The New York Times

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UK loses its place as fifth best-performing economy after #Brexit vote

Falling off the chart: The pound plummets as the effect of the EU referendum vote makes itself felt.

Falling off the chart: The pound plummets as the effect of the EU referendum vote makes itself felt.

To those of you who voted ‘Leave’: You’ve crashed the country.

Please tell me you’re clever enough to know this is a bad thing.

The FTSE 100 fell as much as 8.7pc when the London market opened after the UK voted to leave the European Union, an unexpected outcome that prompted the resignation of prime minister David Cameron this morning.

The blue chip index recovered slightly to a loss of 4.9pc, but the FTSE 250 – which is considered a closer barometer of the UK economy – fell by 12.3pc before paring losses back to 7.1pc.

France’s economy overtook the UK’s as the pound slumped to its weakest level in more than three decades, sending investors fleeing to the “safe haven” of gold. After jumping 8.1pc to a two-year high, the price of the yellow metal softened slightly to trade 4.5pc higher.

Source: Markets live: pound hits 30-year low as FTSE 100 recovers from 8.7pc slide to 5pc loss

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Corbyn to blame for #Brexit? Pull the other one!

Was this man really to blame for Brexit? Of course not. It's time for a reality check.

Was this man really to blame for Brexit? Of course not. It’s time for a reality check.

Okay, Brexit is happening. David Cameron didn’t want it; Jeremy Corbyn didn’t want it – but it’s happening anyway and the UK is self-destructing in the immediate aftermath of the decision. Who’s to blame?

Here’s one point of view:

At whose feet does this lie. Let me begin a bit on that.
One : Media/ right wing. Fuelling dissent and hatreds, i think you know in what areas.
Two: Media: In allowing a non MP of a right wing party to have such a huge platform for so long.
Three: Cameron. And the Conservatives, for pandering to this, and allowing the media to create a populist position to exit. Surmise the reasons yourselves.
Four: Campaign lies from Brexit/ Leave. Two main of their promises can never be fulfilled, namely the NHS spending promise, and the Immigration promise.
Five: Regional Economic Neglect by this Government fuelling a lets kick the establishment focus, rather than a national interest focus, in swages of the population.
Six : relatedly, the failure to address escalating inequality in UK demographics..which, by all reasonable looking at is down to the Conservatives
Seven: Conservative manifesto promise, to have a referendum, laid at Cameron’s door, as leading that election manifesto, presenting it, and further, allowing it to happen.
So I leave this really quite unfinished piece with
This situation CLEARLY isnt anything to do with the Right Honourable Mr Jeremy Corbyn, MP, And Leader of The Labour Party. It may have something, and no doubt it does, with the abject deference by some in the party to blairite principles of new labour, which , the membership had wholehearted rejected by electing Corbyn to Lead the party.

Source: The Virtual Gherkin: Some views on Brexit, by Jules

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Morgan Stanley bank looks to move 2,000 London staff to Dublin or Frankfurt

160624 Morgan Stanley

Remember I said foreign-based businesses were preparing to move out of the UK? It’s starting:

BBC business reporter Joe Lynam reports…

Sources within Morgan Stanley say it has already begun the process of moving about 2,000 of its London-based investment banking staff to Dublin or Frankfurt. And it has a taskforce in place.

The jobs which would be moved from the UK would be in euro clearing but also other investment banking functions and senior management.

The American investment bank needs to avail of the passporting system which allows banks to offer financial services in all countries in the EU without having to establish a permanent base in that member state.

The president of Morgan Stanley, Colm Kelleher, told Bloomberg two days ago that Brexit would be “the most consequential thing that we’ve ever seen since the war”.

Source: Morgan Stanley looks to move 2,000 London staff
ADDITIONAL: There are rumours the bank is not going to move after all:
160624 Morgan Stanley denial
Let’s just see where Morgan Stanley happens to be when the dust settles, shall we?

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Foolish ‘no confidence’ motion in Jeremy Corbyn will divide Labour when unity is vital

Jeremy Corbyn has the largest personal mandate of any Labour leader in recent decades [Image: Matthew Horwood].

Jeremy Corbyn has the largest personal mandate of any Labour leader in recent decades [Image: Matthew Horwood].

Margaret Hodge and Ann Coffey – what a pair of idiots.

Many members of the Parliamentary Labour Party will probably jump at the chance to rid itself of a leader that was imposed on it by the party membership – a membership that has more than doubled since he announced his candidacy a year ago.

If the vote goes ahead and he is ousted, though, the same party membership will be outraged and the result could be a split that will render Labour impotent for decades.

It is electoral suicide.

And these two creatures can’t – or won’t – see it.

This Writer takes solace in the fact that Mr Corbyn has said he will stand for re-election if a leadership challenge takes place, and the vastly Corbyn-supporting Labour membership will put him back on top automatically.

What then for his opponents in the party? Will they do the decent thing and quit – not just as Labour MPs but as MPs altogether, clearing the way for candidates who are more able to follow the will of their party?

Or will they carry on making a bloody nuisance of themselves?

This challenge could not have come at a worse time.

The UK needs unity and strong direction but these fake-Labour fools are offering nothing but division and dissent.

Two Labour MPs have submitted a motion of no confidence in Labour leader Jeremy Corbyn.

Margaret Hodge and Ann Coffey confirmed the move in a letter to the chairman of the Parliamentary Labour Party.

The motion has no formal constitutional force but calls for a discussion at their next PLP meeting on Monday.

It will be up to the PLP chairman to decide whether it is debated. If accepted it would be followed by a secret ballot of Labour MPs on Tuesday.

Source: MPs submit Corbyn no confidence motion – BBC News

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