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UK as an "Emerging Economy"?

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woodhutt

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A not very appetizing extract from Bank of America economic strategists.

London (CNN Business)
"Brexit and the coronavirus pandemic are reshaping the UK economy. Could it end up looking more like Turkey, Mexico and Argentina than France, Germany and the United States?

Some analysts on Wall Street are beginning to wonder whether a volatile currency, declining global clout and a reliance on foreign investors could relegate the United Kingdom to "emerging market" status.
Companies warn 'huge gamble' on Brexit could add to Britain's growing jobs crisis
Bank of America suggested in a recent note to clients that it may be time to treat the British pound as an emerging market currency, citing Brexit and worsening debt dynamics as a result of Covid-19.
"We believe [the pound] is in the process of evolving into a currency that resembles the underlying reality of the British economy: small and shrinking," wrote BofA strategists Kamal Sharma and Myria Kyriacou."

For the full piece go to
https://edition.cnn.com/2020/07/10/busi ... index.html

Pete
 

lurker

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In an attempt to start a slightly more practical discussion......
I think we need to turn our national hand towards making stuff.

We still have the ability to engineer and manufacture if we put our national mind to it.
We ought to become more self reliant .
Regarding raw materials, we spend a fortune sending waste abroad to pollute 3 rd world countries when a bit of effort could see it all reused.
 

Terry - Somerset

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Japan may be a better aspirational comparator post Brexit - a leading global economy beset by a number of issues.

The problems are somewhat different, GDP per capita is similar to UK, overall size of the economy is in the same league!

What actually happens with the heady mix of Brexit and CV-19 is anyones guess - but it makes good sense to have at least some regard for how others see us!
 

woodhutt

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Thank you lurker and Terry. :)
This is a 'General Chat' / 'Off Topic' post and is intended to stimulate discussion but it seems to have raised some hackles which was not my intention.
It is sometimes interesting and informative to read how outsiders view a situation. How do other forum members see the issues raised in the article and how would they address the widening debt gap?
 

Trainee neophyte

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woodhutt":1e7d0shz said:
Could it end up looking more like Turkey, Mexico and Argentina than France, Germany and the United States?
I hardly think Germany, France and USA are exemplary economies the UK should aspire to. I also think a better list of examples might be Venezuela, Zimbabwe and Weimar Germany.
[youtube]2Owuk3cZGtQ[/youtube]
 

Cheshirechappie

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A lot of clever beggars wrote off the UK economy in the 1970s, too ("managed decline", and all that). Turned out that wasn't the case.

Nobody can forecast the future accurately, but challenges bring opportunities. I wouldn't mind taking a small bet that the UK economy outperforms a few of it's 'competitors' over the next decade or so.
 

rafezetter

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woodhutt":3fk08q89 said:
Thank you lurker and Terry. :)
This is a 'General Chat' / 'Off Topic' post and is intended to stimulate discussion but it seems to have raised some hackles which was not my intention.
It is sometimes interesting and informative to read how outsiders view a situation. How do other forum members see the issues raised in the article and how would they address the widening debt gap?
Well, on the "debt gap" the USA might be well to keep it's mouth shut. While the UK is indeed struggling with certain issues, we aren't suffering shutdowns of govt services that the USA has and last I looked the USA is also heavily in debt to China, one of it biggest adversaries in terms of pretty much everything representing all that the USA abhors (but will happily take it's money).

and for total clarity before anyone accuses me of being a USA hater, my biological mother is American, and her father flew Liberators in WW2, and I've always considered myself as much American as British.

It does make me wonder if there is some political manouvering going on here, after all the "special relationship" UK / USA might mean that Trump / "extremist right wing pro USA" supporters are wary that the UK might try to dissuade him or them, using that "relationship" as the leverage, should he or they try something stupid, (or even more stupid) and rope us along with the USA.

There's also the whole "we don't need those limeys - we are the most powerful nation on earth" BS that I've been seeing more of in conversations with some of my American gaming partners. (which I usually shut down with - "why does the USA owe so much money to China then?")

Ofc this COULD also be just about the financial markets, but world politics is always manouvres within manouvres.

edit: It's just struck me there's a very easy way to settle this - I'll just email my Father and Brother, my Father being a person who's closely followed the worlds politics for 50 years, because his career in financial markets and investments depends on it in large part, and my Brother who's the same, earning a 6 figure salary and travelling the world assessing exactly this: emerging markets.
 

Woody2Shoes

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Cheshirechappie":j7xe5o1h said:
A lot of clever beggars wrote off the UK economy in the 1970s, too ("managed decline", and all that). Turned out that wasn't the case.
.......
We had the enormous windfall of north sea oil - and a couple of 'lucky' oil price spikes to trigger exploitation of it. For a decade or two the £Sterling was effectively a petro-currency. We haven't got much to show for it....
 

Cheshirechappie

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Woody2Shoes":1mjsuy8b said:
Cheshirechappie":1mjsuy8b said:
A lot of clever beggars wrote off the UK economy in the 1970s, too ("managed decline", and all that). Turned out that wasn't the case.
.......
We had the enormous windfall of north sea oil - and a couple of 'lucky' oil price spikes to trigger exploitation of it. For a decade or two the £Sterling was effectively a petro-currency. We haven't got much to show for it....
Don't really see how this is particularly relevant. North Sea oil windfall was one factor among many in the recovery from the nadir of the '70s, and the challenges we face now (and consequently the opportunities) are completely different to the problems the UK faced then.
 

Woody2Shoes

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Some interesting background:

https://www.ons.gov.uk/economy/economic ... 2019-09-02

https://assets.publishing.service.gov.u ... conomy.pdf

I remember reading recently, but can't find the quote, that the purchasing power of Sterling has fallen several-fold vs the DM/Euro since the 1970's - that's partly because North sea oil and gas have dwindled and partly because we're now simply all selling each other hamburgers/nail extensions/brightly-coloured-plastic-objects made overseas. At least - post-brexit - we'll be free to offer hamburgers/nail extensions etc. to our international friends around the world.
 

D_W

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I can guarantee you that almost nobody in the US is worried about any economic agreement with any other countries.

if there's anything close to that with us, it's economic cooperation with japan and not the UK. The "special relationship" is posturing and and military / strategic consensus and may have some wrinkles.

when you get to the group of folks in this country who complain and produce nothing (university art professors, etc, who "worry about" what other people think about them), they're usually upset that friends in france and belgium might think something the government does is a reflection on them.

it isn't. I go to my job during the day, I spend time with my kids at night. if the government does something dumb, it's the government. If I talk to a friend in Scotland, I'm not talking to Prince William and never confuse the two.

As for services that we've had to shut down? Care to elaborate? I work with the government on a fairly regular basis (i'm in private industry). I've dealt with nothing other than a voicemail at the IRS and DOT that says that the offices are closed and to leave a voicemail. This is a departure of zero from normality because the IRS and DOT will not answer the phone when they're in the office - they just don't as a matter of policy unless you're dealing with the general number (they will answer you there and route you - if you get further in than "where do I get tax form X", they send you to the voicemail of someone you could have called directly, and that person calls you back).

That's how it works. I literally called the DOL yesterday and went through their help number (it took about 3 minutes of wait time, they referred me to someone else and i'm waiting for them to call me back.). In "normal" times, the same thing occurs. If I call a number directly and someone is in the office, they don't answer and never have (at the IRS, DOL, treasury unless you're using the general number - but again, instead of leaving a voicemail, the service representative arranges the call for you and you wait the same amount of time).

Sometimes I hear a dog or a kid in the background now, which doesn't seem that unreasonable.

We have a debt problem. Most of the world does. It seems that people dwell on it only when their favorite candidate isn't in office.

I have no idea if people in the UK think something about their government should make them embarrassed when talking to someone from the US. We don't care, so why should you be embarrassed. we don't have this weird "we're all together" association that some parts of the world have with their government, and if you try to do consensus building in the US, your idea had better have merit because you don't get the euro style "we have to all have the same answer" thing. I've noticed it with our (my, personal, not figurative) european friends - they pose something to you and they stare at you..."right? don't you agree?". What's the deal with that. There's a simple principle - we can be friends without agreeing on everything or doing the exact same things.

As to our economic troubles, I see in the last two decades, we've seen the rise of amazon, apple, tesla, google, space x, etc. Our per capita GDP is 50% higher than the UK. If you asked anyone anything over here about that, it would be a suspicion that the UK is past the point of being able to innovate and that the government do-all structure has made everyone far too comfortable by disincenting success and risk.

Ireland appears to be pretty successful at growing their economy, but it's a point of interest for us in the states and not really much of a lesson as it's about a fiftieth of the size of the US economy.

Our government has been basking in non-achievement since at least the mid to late 1980s, but the economy hasn't suffered for it yet, and I'd imagine that the accommodation of the jobless and disabled here is probably better than than most places despite the one issue americans have trouble admitting. The downside protection in this country is socialist. The one condition is that you generally cannot get it until you're actually poor (as in, you may qualify for free medical coverage, free income, free or near free housing, free food, etc, but you will not be allowed to build up a pile of assets and then get those - you are required to spend those down before the government foots the bill for you). Somehow, we've structured that without taking away the top side incentive to innovate and create economic growth, but the structure in my mind is by refusing to pay the current bill and kicking it toward the future.
 

D_W

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by the way, the notion posed by CNN that anyone would view the UK as an emerging economy is nonsense.

But it's the kind of stuff CNN is doing.

Don't confuse our news with your news over there. Fox and CNN are more like your newspapers, and nothing remotely close to the BBC.

If you want something that's similar to BBC, you have to use our similarly governmental funded news service - NPR.

You'll find a lot less of the ridiculous clickbaiting that you see in opinion articles or titles in our mainstream news (it's pretty much universal, but CNN made a very deliberate and public choice to more or less be the yin to the foxnews yang. I'm sure both are horning in on the tabloid business and hurting that segment).

We would consider the UK and most of western europe an overmature economy.

So is the united states economy.
 

doctor Bob

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woodhutt":1elo4chc said:
It is sometimes interesting and informative to read how outsiders view a situation. How do other forum members see the issues raised in the article
Load of Boolloxs. This is my interesting and informative view.
 

rafezetter

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D_W, my comment about services shutting was the Govt shutdowns of which there have been two that I am aware of in the last 10(ish) years, with services like Police, Park Rangers and Reservists etc others not getting paid, and even some places managed by these staff closed - how far or little that impacts things I can't say, but I do know it's a reality not (if ever) seen in the UK. (about the only time it might have would the the 70's when he had huge inflation and allsorts of issues)

Infact a quick google shows there have been NINE since 1980 with FOUR of those affecting ALL agencies across the country, with the largest two affecting some 800,000 employees, the last of which was only this last December 2018/feb 2019 and cost the govt 5 BILLION, so I have to say I'm a little suprised to see you write that I need to elaborate, as though I'm just making it up as it was national news over there.

Otherwise yes seems you are right about pretty much everything else and this CNN headline being little more than clickbait - my father said as much, he did go on to say more and go into quite some detail as to the intricacies and the WHY the UK won't be seen as an "Emerging Market" EVEN with brexit looming, and an interesting fact that the doomsayers screaming of the loss to the UK economy have already revised thier predicted 8% overall loss over 15 year period down to 4%, which makes it essentially negligable and lost in the general noise of fluctuating markets on a daily basis; aka a non event.

All of this has (and should have been in the article) to be taken in relative terms against all the other countries suffering from the effect of the pandemic as well.
 
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