MercoPress. South Atlantic News Agency
OECD suggests “reversing the Brexit process” would boost the UK economy
Reversing the Brexit process would boost the UK economy, the international economic body, the OECD has said. A new referendum or a change of government leading to the UK staying within the EU would have a “significant” positive impact on growth, the OECD said. Read full article
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Disclaimer & comment rulesOn the contrary Brexit seems to have boosted the British economy? There seems to be a continuing blizzard of unhelpful negativity from the remoaners. Great thats its being ignored.
Oct 18th, 2017 - 08:33 am - Link - Report abuse +1Governor Bank of England 18 October
Oct 18th, 2017 - 10:04 am - Link - Report abuse +1This morning, BoE Governor Mark Carney discussed the risks of a hard Brexit during his testimony to the UK Parliamentary Treasury Committee. There was renewed weakness in Sterling during his testimony.
Ironically, given the fall in Sterling, Carney explained why Europe’s financial sector is more at risk than the UK from a “hard” or “no-deal” Brexit. We wonder whether Juncker and Barnier appreciate the threat that a “no-deal” Brexit poses for the EU’s already fragile financial system?
When asked does the European Council “get it” in terms of potential shocks to financial stability, Carney diplomatically commented that “a learning process is underway.” Having sounded alarm bells about clearing in his last Mansion House speech, he noted “These costs of fragmenting clearing, particularly clearing of interest rate swaps, would be born principally by the European real economy and they are considerable.”
Calling into question the continuity of tens of thousands of derivative contracts, he stated that it was “pretty clear they will no longer be valid”, that this “could only be solved by both sides” and has been “underappreciated” by Europe. Moving on to the possibility that there might not be a transition period, Carney had a snipe at Europe for its lack of preparation “We are prepared as we should be for the possibility of a hard exit without any transition…there has been much less of that done in the European Union.”
Maybe it’s Europe, not the UK, that needs the transition period most.
@TV
Oct 18th, 2017 - 11:22 am - Link - Report abuse +1Brexit can't possibly have boosted the economy, because it hasn't happened yet. All the predictions about what it will do remain just that - predictions.
The fall in the pound last year seems to have given the economy a temporary boost, but GDP growth figures for 2017 are pretty low compared to other G7 countries.
Anyway, when they say productivity growth had come to a “standstill”, that is not the same thing as GDP growth. There is a nice report about it here:
http://researchbriefings.files.parliament.uk/documents/SN06492/SN06492.pdf
It shows productivity more or less stopped growing after the great recession and has still not regained its peak in 2007. And here is why that is a problem:
”Productivity – how much is produced for a given input (such as an hour’s work) – is directly linked to living standards, with a country’s ability to improve its standard of living over time almost entirely dependent on productivity growth.
Productivity is also crucial in determining long-term growth rates of an economy. In other words, stronger productivity growth leads to stronger GDP growth. This, in turn, increases tax revenues and lowers government budget deficits. Of course, lower productivity growth
results in the opposite: lower GDP growth and higher budget deficits.”
And as the article says, differing levels of productivity in different parts of the country tend to lead to inequalities, which may well have contributed to the Brexit vote. It's something our government needs to sort out irrespective of Brexit, but they haven't managed to tackle it so far.
Having been a Production Engineering Manager at one time I have plenty of practical experience of work study and improving productivity. I believe the official figures are simply wrong. I wonder what they are actually measuring? Perhaps its the degreed demotivated swathes of burger flippers and call centre workers that can easily be replaced by automation? Perhaps these people would be better deployed doing something that actually added value to our national economy?
Oct 18th, 2017 - 11:40 am - Link - Report abuse +1I believe you, and if I was a manager and you told me my plans for the business would drastically decrease productivity, I would listen to you. But when it comes to the overall picture for the whole country, you only have your own experience and that of people you know to go on. I trust the people whose job it is to create national figures and averages to do it correctly, a lot more than I will ever trust one person's experience.
Oct 18th, 2017 - 12:25 pm - Link - Report abuse -1Now imagine I was that manager and you told me my idea would decrease productivity drastically, and I said I thought you were simply wrong, and that I was tired of listening to experts. And then when I asked other experts on productivity, they all said the same thing, but I decided to go ahead anyway. Would you think that was a wise decision or a foolish one?
My point is that we have too many people deployed in very low added value work, and, there are too many idling away in public services that add little value. Those things will affect the crude measurements of productivity that I suspect are being made. Its the difference between Waitrose and Aldi, (UK way of working and German way of working) and its dramatic. Productivity is easily measured. I wonder if its being done correctly?
Oct 18th, 2017 - 04:06 pm - Link - Report abuse +1“My point is that we have too many people deployed in very low added value work, and, there are too many idling away in public services that add little value.”
Oct 18th, 2017 - 04:45 pm - Link - Report abuse 0Yes, and this is probably why productivity isn't rising for the country as a whole. It's an average, it doesn't mean no improvements are being made anywhere.
I suspect part of the problem is that wages have been stagnant, since where labour is cheap there is little incentive to make each individual employee more productive through eg training. It is indeed the difference between the Asda model and the Aldi model; many unskilled workers vs few skilled workers.
If you want to know how they are measuring productivity, you could take a look at the study I linked. Then you'd be better able to discuss how valid their results are rather than just speculating.
Looks like we will just walk away and prepare for WTO rules anyway. As I have said in the past you cant negotiate with the Germans. Their loss as well as ours but they have most to loose.
Oct 19th, 2017 - 07:42 am - Link - Report abuse 0Any manufacturing company will be continually looking for increases in efficiency, our rate of progress may be slower but I just dont believe they are as bad as is being portrayed. Cant prove it but then their method based on gross figures doesnt really give a true picture either. I suspect increased margins and back office staff increases are muddying the waters.
Yes it does, but we have by far the most to lose. I just can't respect anyone who sticks their head in the sand and ignores reality, and that's the truth. It doesn't matter how clever you are otherwise, if you refuse to recognise the truth then you cannot make wise decisions.
Oct 19th, 2017 - 10:06 am - Link - Report abuse 0As for their figures, you are missing the point. It doesn't matter whether it's back office staff and increased margins, or a failure of innovation, the dire consequences for the country are the same either way. The causes only matter when we come to try and fix the problem.
Well, thats your take on it, not mine. Most of the dire predictions have proved false, project fear failed. Our currency needed to devalue, and thats proved beneficial for equity investors like myself and exporters whilst UK property investors have caught a cold and those owning property overseas have done ok. Suits me fine.
Oct 19th, 2017 - 11:34 am - Link - Report abuse 0The media point their figures at the shop floor where efficiency seeking is relentless, I suspect they are pointing at the wrong target. Another case of mismanagement.
No they haven't. We are still in the EU. The predictions are still predictions.
Oct 19th, 2017 - 12:44 pm - Link - Report abuse 0I don't expect you change your mind on wanting to leave, I just want you to acknowledge the true consequences, known and unknown. You can't make good decisions unless you know the real facts.
As for efficiency, I can't remember seeing anything blaming the shop floor. The only article I have read that mentioned it was one comparing the French and British economies, which said French employees are much more productive than British ones, but France has a higher level of unemployment so the result is the same GDP per capita. Their explanation was that it is lack of demand that is causing the slow economic growth in both countries, and the differing employment laws simply caused the pain to be felt in different areas. (High unemployment in France, low wage growth and low productivity in the UK.)
It's an interesting idea, at any rate.
There are few facts. Having worked in Germany and France on many occasions in all sorts of manufacturing enterprises my observation is that the Germans generally work harder and more efficiently than us but the French! :-))) thats ludicrous they are so often disorganised and bolshy, plus nothing gets repaired and seldom works properly.
Oct 19th, 2017 - 01:05 pm - Link - Report abuse 0By implication its the shop floor that is the target of criticism by British Management often comprised of Accountants. In Germany, so many businesses are family owned and run by family members who have practical experience as well as an appropriate technical education. They are far better at running businesses, reinvest and think long term. We suffer from management by myopic bean counters who can only tell you what happened, not what can happen. We need more Dysons.
“There are few facts.”
Oct 19th, 2017 - 01:24 pm - Link - Report abuse 0Then there is even less excuse for getting them wrong. You know perfectly well we haven't left the EU yet and therefore the predictions CANNOT have been proved false.
And you were an expert in something, so surely you have come across amateurs who thought they knew better than all the experts and refused to listen to you?
The point in France is that it is very hard to fire people, so employers are very reluctant to hire people. This means they try to get more out of their existing employees, by training them, getting better equipment, pushing them to work harder or longer hours, etc. Whereas in Britain they can just hire more people and pay them low wages, so they don't demand as much from each employee. It's the Asda model vs the Aldi model again.
Also, it's obvious Germany is running its industry better than us, but Brexit isn't going to do a damn thing to fix it. The problem is with our own recent governments and society (which value academic education over technical skills, and managerial roles over everything else), not with Europe.
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