brexit. Everyone in the media try to ignore the elephant in the room. But, brexit.
I know several companies who are winding down, because they can't export. Just too much trouble and money. It is everywhere, and nobody talks about it.
brexit.
brexit.
It was talked up by as either a glorious thing or a monumentally cataclysmic event when it hit in 2020 and in the end it was... mildly negative. It was skilfully played up as a wedge issue for 5 years.
The elephant in this room isnt Brexit it is war.
(and idiotic energy policy)
The answer is Brexit. Brexit wasn’t mildly negative. Brexit has been catastrophic.
https://www.bankofengland.co.uk/working-paper/2019/the-impac...
The Bank of England estimates that Brexit has knocked off 2-5% of UK’s productivity across the board and that’s only one of the 3 impacts they’ve discovered (including an 11% drop in investment).
Confirmation bias is dangerous. As a continental European following UK media a lot Brexit is talked to "death" by some singular media personalities, it is not discussed at all in a broad sense.
It is fascinating for me to watch how a society decided collectively to "get on with it". And by that I mean: move forward pretending brexit did not happen and the present is not influenced by it. It feels like a sketch from monty python or fawlty towers where everybody pretends a clearly obvious thing does not exist.
I live in Germany and the war and energy politics have a much bigger impact here than in the UK. Sure not all of what you have going on there is attributable to Brexit and a lot of it has to do with the questionable quality of your political leadership — but pretending worse trading terms with the majority of your trading partners will somehow not inpact the economy of a nation takes a special kind of mental gymnastics.
The truth is that the UK was in a very priviledged spot within the EU before it left and it made good use of that position, both in a political and economic sense.
One may wonder how people got this so wrong?
"The truth is that the UK was in a very priviledged spot within the EU before it left and it made good use of that position, both in a political and economic sense"
Well, it's not really the case unfortunately. The UK was in a seriously under-privileged position inside the EU because its services based economy hardly benefited from the single market, which focused primarily on free movement of goods (benefiting Germany) and people (primarily benefiting eastern Europeans), but not on free provision of services (which would have benefited UK business). Instead services provisioning remained a patchwork of local regulations and barriers to entry.
As a consequence, leaving the EU single market didn't impact most British businesses to the extent predicted (by pro-EU economists, see my other comment), as they either weren't massive exporters to Europe to begin with, or were having to deal with local red tape and varying rules anyway.
There's a discussion of this problem here: https://euagenda.eu/upload/publications/untitled-46447-ea.pd...
This situation remained in place for decades because despite what the media may have claimed to people elsewhere in Europe the UK had essentially no influence, no ability to change anything and its "privileges" such as they were primarily consisted of opt outs of EU policies. But those opt outs were negotiated long ago, no more were in the offering and the ones that existed were under more or less permanent attack even when written into apparently watertight treaties. For example the EU was constantly attempting to force financial services out of London and the UK had to go to court, I think several times, to get these attempts blocked. Regulations were often interpreted in overtly political ways, again, specifically to damage the UK (see how "equivalence" rules aren't actually about equivalence, by universal agreement). It was often an antagonistic relationship despite being a member.
So the reason people don't talk about Brexit much in the UK is because the process was so drawn out and the eventual impact so minimal compared to COVID that there's really just not much to actually say.
And its continental neighbors are way more exposed to Russian gas than the UK is.
And yet the UK is doing significantly worse than its European neighbors. It’s the only major European country whose economy has not recovered to pre-pandemic levels.
What the UK is facing right now is uniquely UK. The most likely culprit is Brexit. The other possible culprit could simply be the absolutely corrupt and unstable governments it has had over the past couple of years. We know, for example, that Liz Truss’s month or so in charge cost the UK at least 50 billion dollars simply through immediate effects of the terribly I’ll-advised mini budget.
No it isn't. This impression is created by the long stream of headlines posted here from the pro-EU part of the UK press (the pro-Brexit outlets tend to get systematically flagged), but it isn't actually true.
UK performance last quarter: https://tradingeconomics.com/united-kingdom/gdp-growth-annua...
"The British economy expanded 2.4% year-on-year in the third quarter of 2022, the lowest reading since the contraction in Q1 2021, but slightly above market expectations of 2.1%, preliminary estimates showed. Household spending slowed sharply (0.8% vs 4.3% in Q2), business investment rose less (3.5% vs 5.2%) and government expenditure stalled. Meanwhile, exports jumped 18% and imports increased at a slower 7.2%"
Growth is normal-ish for this sort of west European economy, though below the USA, both imports and exports are up but exports are up more.
How about Germany, historically considered an economic power? https://tradingeconomics.com/germany/gdp-growth-annual
"The German economy expanded 1.3% year-on-year in Q3 2022, slightly better than a 1.2% rise in the preliminary estimate, and following a downwardly revised 1.6% growth in Q2. It is the smallest annual growth rate in three quarters"
Oh. Significantly lower growth than the UK.
Just a few days ago a very similar story was posted to HN about food price inflation, and once again all the top voted comments immediately blamed Brexit and claimed the UK is in unusually dire straits, even though inflation in the UK is no different to other similar countries in western Europe. Many posts made extremely strong factual claims about the supposedly terrible performance of the UK that were just made up and when this was pointed out people started retreating to positions like "there must be something worse and it'll definitely be because of Brexit". I spent some time on that thread pointing out false claims, like here:
https://news.ycombinator.com/item?id=33682546
One of the comments in that thread asks, "Is the OBR's own analysis of Brexit evidence enough for you?". Their cited OBR report didn't contain any analysis - just an assumption that Brexit would reduce trade intensity by 15%. No working or sources were given for that number, it was just made up. This is typical for the topic. EU-related economics is just a large pile of confirmation bias.
Now take this story. It's paywalled so most people are going to be riffing on the headline. The headline is phrased as fact but it's actually just reporting on a prediction - economic modelling - once again from the OBR. This is presented as if it's unquestionable, but it's actually very questionable. The FT reports it because it's an extremely pro-EU biased outlet so it's telling their readers what they want to hear (the FT offices were literally flying the EU flag in the past, maybe still do).
Governments in general have a poor track record of economic prediction, and the UK civil service and OBR specifically have made unusually poor economic predictions for anything related to Brexit. It's not a neutral collection of dispassionate experts by any means. They keep being proven wrong by events, like when they said half million job losses would occur immediately after the referendum if Leave won, yet they don't engage in any kind of public post-mortem or learning processes. Nor, sadly, do too many HN commenters. If you're reading about the UK economy on HN at the moment then lots of the comments will be factually wrong. There are many people who are ideologically committed to EU rule, and that colors their perceptions of everything.
And if we aknowledge that fucking up your trade relations like that has an impact, maybe discussing that fuckup is what people who want the good of their own country would do?
What is the plan here? Pretending Brexit is anything else than the exceptionally horrible british tabloid media manipulating gullible people into stupid decisions for political gain? Pretending that Brexit is anything else than an embarrassment on the international stage? How is that going to help?
I cannot shake the feeling that stubbornly pretending something embarrassing does not exist is extremely british in a certain sense. While this is great fun within the fictional bounds of a monty python sketch however, it prolongs the agony in such a large scale issue. Time to sober up and aknowledge reality.
I’m hoping the UK joins the United States. We’ve already started to merge our military industrial base and have a long, shared history. Maybe they would receive preference for US LNG/coal shipments too as a result.
This is unrealistic bordering absurd, you just came out of Brexit sold under the pretense of increased freedom and sovereignty. The UK didn't even like the special deal it had with the EU, unique concessions that no other country in the Union would get because the Union acknowledged that the UK was worthy enough to be in with those rather than out without them.
It'd be ludicrous to believe that coming from this sentiment the population would agree in joining the US, losing most of its sovereignty to become a 51st State under control of the USA Federal Government, like extremely ludicrous. The cherry on top would be the humiliation to the UK's nationalists in becoming a vassal of a former colony, I don't see this having any chance whatsoever to happen, not now, not in the next 50 years.
I gotta ask, what fosters this hope of yours? I haven't seen a Brit so deluded in wishful thinking as this take, it's a bit baffling, sorry to say.
The UK cannot maintain its current standard of living without a very large partnership of some sort. Once living standards get bad enough people will be open to non-traditional options.
The EU can’t offer much energy, national security, or manufacturing support these days and U.S. is the only other reasonable option. A partnership, statehood, or something similar with the U.S. would immediately position the UK as the most powerful and desirable region in Europe IMO.
It would also not be one state, more likely 4. England, Scotland, Wales and Northern Ireland. They would each get a voice in the USA Federal government. Opportunity of a generation IMO.
Nothing.
The UK literally relies on the EU energy market (and vice versa), with lots of imports and exports between the two. There isn't enough of it, but there's already a codependency there. National security is debatable, but as a part of the EU the UK would be leader among equals (big army and nukes), so cooperation would be on an equal footing. Manufacturing of what, specifically?
National security - the UK is THE leader in Europe. The EU seems unwilling to field a credible military deterrence. That’s not being equals IMO. Slowly that’s changing now… but the UK is already integrating its military industrial base with the U.S. so that ship has sailed.
Manufacturing - I used that word as a catch-all for providing goods and services.
If anything, each of those 4 states in increasingly looking to find an alliance that works for them individually. The UK exited the European Union, and that is in turn weakening the United Kingdom's Union. What a surprise.
For example, a quick Google search revealed (I’m sure you can get newer figures) that North Sea oil provided over 60% of UK’s oil needs in 2012 and over 50% of its gas needs.
https://www.bbc.com/news/uk-scotland-scotland-politics-26326...