IMF: Brexit vote is already damaging UK economy

https://www.ft.com/content/06c2d3f4-e56d-11e7-97e2-916d4fbac0da

The International Monetary Fund said on Wednesday that Britain’s vote to leave the EU is already damaging the UK economy, as it defended its gloomy outlook for the UK after Brexit. Speaking at the end of the fund’s two-week mission to assess the health of the UK economy, Christine Lagarde said the economy was performing much as the Washington-based international organisation predicted before last year’s EU referendum.

Pulling no punches, the IMF’s managing director said: “We feared that if Brexit was decided upon, it would most likely entail a depreciation of sterling, an increase of inflation and a squeezing in wages and a slowdown and probably a reduction of investment.” “I know that some people at the time said, ‘Oh, it’s those experts,’ . . . but what we are seeing is that narrative we identified as a potential risk in May 2016 is actually being rolled out as we speak,” she said. “This is what we are seeing. It’s not experts talking, it’s the economy demonstrating that.”

In its report on Wednesday, the IMF said there was no doubt that Britain was already paying a price for last year’s Brexit vote, as economic growth rates have declined in the UK but climbed in Europe, the US and Japan. The IMF cut its UK growth forecast for 2017 from 1.7 per cent to 1.6 per cent, and said growth would slow further next year. “Despite a strong recovery in global growth and supportive macroeconomic policies, the impact of the decision to exit the European Union has weighed on private domestic demand,” the fund said in its end-of-mission statement. “Business investment growth has been lower than would be expected in the context of strong global growth and high levels of capacity utilisation, owing to heightened uncertainty about economic prospects.”

The fund was supportive of the Bank of England’s decision to raise interest rates last month, as well as the UK government’s tax and spend policies. But it said that with pressures on public spending rising, any future deficit reduction should come from tax increases, rather than further spending cuts. However, the IMF also warned that Brexit was likely to worsen the public finances if output was dented by more than 1 per cent of national income. “The losses associated with just a 1 percentage point decline in long-run output would therefore more than offset the gains from any net savings from lower contributions to the EU budget post-Brexit,” the IMF warned. “Taken together, this means that the UK may in the future face difficult decisions about the desired size of its public sector, as well as the mode of delivery and financing of public services.”

The IMF said there were both upside and downside risks to the UK economy in the years ahead, largely based on progress in ensuring an orderly Brexit. Ms Lagarde welcomed the progress in the Brexit negotiations so far and urged both the UK and the remaining 27 EU countries to negotiate a “standstill” transition period as quickly as possible. Philip Hammond, UK chancellor, said on Wednesday that he shared the fund’s view that Britain needed to have a transition deal in place quickly.

———

well what do you expect the imf to say?

“the IMF said there was no doubt that Britain was already paying a price for last year’s Brexit vote, as economic growth rates have declined in the UK but climbed in Europe, the US and Japan. The IMF cut its UK growth forecast for 2017 from 1.7 per cent to 1.6 per cent”

global puppeteers are not going to announce a successful break up of the puppet troupe..

“The International Monetary Fund said on Wednesday that Britain’s vote to leave the EU is already damaging the UK economy”

401

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~ by seeker401 on January 2, 2018.

8 Responses to “IMF: Brexit vote is already damaging UK economy”

  1. haha! Good picture. That is basically what she is telling everybody. Do not even have to listen to her words.

  2. btw seek. It is not Jan. 2. It is Jan. 1. Your dates are wrong.

  3. http://www.imf.org/en/news/articles/2017/09/28/sp092917-central-banking-and-fintech-a-brave-new-world

    Some quotes IMF’s Lagarde’s September 2017 speech at the Bank of London, the topic: 20 years from now:

    – “Cars have disappeared, because people are moving about in hovering drones, or “pods,” which elegantly avoid each other in the morning rush hour.”

    These pods?

    – “For instance, think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country—such as the U.S. dollar—some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0.”

    – “One possibility is the break-up, or unbundling, of banking services. In the future, we might keep minimal balances for payment services on electronic wallets. The remaining balances may be kept in mutual funds, or invested in peer-to-peer lending platforms with an edge in big data and artificial intelligence for automatic credit scoring. This is a world of six-month product development cycles and constant updates, primarily of software, with a huge premium on simple user-interfaces and trusted security. A world where data is king.”

    – “The Bank of England is already leading the way by including large broker-dealers and central counterparty clearing houses. All this, of course, has regulatory implications. More counterparties imply more firms falling under the central bank’s regulatory umbrella—which is the price to pay for liquidity on a rainy day.”

    Such as Amazon and others becoming banks?
    https://seeker401.wordpress.com/2017/12/28/amazon-gets-into-banking-and-other-2018-predictions-from-cfra/

    – “Reaching across borders will be critical as the focus of regulation widens—from national entities to borderless activities, from your local bank branch to quantum-encrypted global transactions.”

    More globalism.

    – ” I am convinced that the IMF has a strong role to play in this respect. But the Fund will also have to be open to change, from bringing new parties to the table, to considering a role for a digital version of the SDR.”

    Decentralization is now code for more globalism.

    – “One thing is clear: we always have more data. Some estimates suggest that 90 percent of the data available today was generated in the past two years. This is not just information on output, unemployment and prices, but also behavioral data on the quirks and irrationalities of the homo economicus. Thanks to smartphones and the internet, this data is now abundant, ubiquitous, and increasingly valuable as we pair it with artificial intelligence.”

    That is right. Not just cryptocurrencies are mined, but personal data is easily minable and there’s lots of it in the digital world.

    • For instance, think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country—such as the U.S. dollar—some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0.”

    • whatever she says, is going to happen..listen to her words carefully..

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