Cyprus-Forum.com

[Tim Drayton]

BTW: I am still waiting for you to tell me how the UK economy makes 'billions and billions' out of the financial system.

From a parliamentary report:

"In 2014, financial and insurance services contributed £126.9 billion in gross value added (GVA) to the UK economy, 8.0% of the UK’s total GVA."

"This measure suggests that the financial sector contributed £65.6bn or 11.5% of total government receipts in 2013-14."

http://webcache.googleusercontent.com/s ... clnk&gl=cy

[Tim Drayton]

the fact is the Sterling started falling from the last quarter of 2015 both against the Euro and the US$. In fact against ever major currency e.g the Jap YEN
http://www.x-rates.com/graph/?from=GBP&to=EUR&amount=1
It's obvious this fall was due to other factors other than the question of brexit. if you have a look at charts then the devaluation of sterling after the referendum perfectly matches the path/trendline by which it was getting devaluated from say Oct Nov last year!!
It only stabilized a few months before the referendum and then started falling again! No so strange.
The referendum result just triggered the previously existing downfall of Sterling seeking a new stabilizing point.
Like I said before if it continues to fall non stop then seek the reasons to a really BAD ECONOMY (pre-existing)

The pound started sliding against the euro at the end of last year and the reason universally cited for this was uncertainty over the referendum. Remember that the pound shot up in the markets on the day of the referendum on the expectation that there would be a narrow victory for remain. This all suggests to me that the referendum was a major factor.

8 months before the referendum is a very long time to start a constant currency downfall Tim. Uncertainty reached it's peak 1-2 months before the referendum yet surprisingly it stabilized during that period. I don't agree with you that it shot up,on the average it just stabilized.
I can only agree that the expected referendum played a role but I suspect there were other more important reasons. MOST PROBABLY because the economic bubble started bursting. Notice it did not fall Vs the Euro alone. It fell against all major currencies
Notice exactly the same happened in Cyprus.The economic bubble started bursting from 2007. What happened in 2013 with the Banks and the haircut was just the final blow. In a nutshell the referendum was most likely the final blow to the UK economy caused by a pre-existing economic problem.

I see the parallels, yes:

An analyst at Bernstein said RBS and Lloyds had £19bn and £13bn of commercial property loans respectively. Shares in RBS have fallen to levels they traded at in 2009, pushing back the point at which the government can sell its 73% stake at a profit. Lloyds is also trading well below the level at which the government can profit by selling its 9% holding.

Raul Sinha, an analyst at JP Morgan, said: “While the major UK banks have £69bn of exposure we highlight smaller banks and building societies have exposure of £17bn but at higher loan-to-values.” Commercial property lending by banks is down from £150bn in 2011 with foreign investors now accounting for 40% of the funding for the sector.

https://www.theguardian.com/business/20 ... n-the-city

Property bubble financed by the banks about to burst. Banks' collateral about to collapse in value, possibly threatening to take them down. Bank and property company shares being hammered on the stock exchange. I fail to see how leaving the EU will make things better, though. The expectation that financial companies will start relocating to the continent is hardly going to shore up the commercial property market, is it?

[miltiades]

"The financial services sector is responsible for 9.6% of national output, while associated professional services contribute a further 4.9%. The UK is the world’s largest exporter of financial services, generating a trade surplus of over £47bn in 2011. The industry contributed £63bn in tax to the exchequer in 2011-12 – 11.6% of tax receipts"

An indispensable money earner for the UK. One can not help but wonder if this sector will decline outside the EU or .....increase and thrive!!!

[Tim Drayton]

"The financial services sector is responsible for 9.6% of national output, while associated professional services contribute a further 4.9%. The UK is the world’s largest exporter of financial services, generating a trade surplus of over £47bn in 2011. The industry contributed £63bn in tax to the exchequer in 2011-12 – 11.6% of tax receipts"

An indispensable money earner for the UK. One can not help but wonder if this sector will decline outside the EU or .....increase and thrive!!!

I believe, indirectly, the contribution is greater. It is the financial sector that props up the whole of the London economy. For example, a high-earning city trader may get some builders in to do some work on that dilapidated mansion he bought with his last bonus. Those builders spend some of the money at Lordo's cafe in Shirley. Lordo's business thrives and he decides to get new pots and pans for his kitchen. Who does he get them from? The money goes round and helps other sectors. London attracts lots of tourists because it is a go-ahead place. Take away the city, and the house of cards collapses.

The city first developed when Britannia ruled the waves and Britain was the workshop of the world to serve the financial needs of the country and empire. It now survives by inertia because so much expertise has developed there. But it now mainly exists as Europe's main financial market. There are aspects of the city's business that can only be carried out because of passporting - the arrangement, thanks to our EU membership, that permits financial services to be marketed throughout the bloc from London. The sector can only decline outside the EU, unless we get some kind of Norway or Switzerland style deal (i.e. we have to accept all of the EU's rules and regulations plus free movement for all EU citizens without any longer having any voice or influence in the EU, which quite frankly is stupid). The only question is how much it will decline. There are many parts of the city's business that can technically carry on in London. Will companies chose to keep doing that business here, or if they have to take part of their business to the continent, will they opt to move everything there? Only time will tell.

As I have said before, I lived through the Thatcher years in horror, and I wish we hadn't gone through the deindustrialisation that has left once proud industrial cities to wither on the vine while the phenomenal success of London keeps the whole ship afloat, but I am sure that if London now sinks the whole country goes with it.

[miltiades]

" "Over half of the property fund sector is now on ice, and will remain so until managers raise enough cash to meet redemptions. To do that they need to sell properties, and as any homeowner knows, that is not a quick or painless procedure," said Laith Khalaf, senior analyst at fund supermarket Hargreaves Lansdown (HRGV.L).

"These funds are therefore likely to be closed for weeks and months rather than simply a matter of days," he wrote in a note to clients before Aberdeen's announcement. "
Well at least we now have .....our country back as well as our NHS better off by 50 million per WEEK !!!!

The affects will be severely felt over the next month or two, I wonder if our elected MPs will let the nation commit hara-kiri !!!

[Tim Drayton]

Can UK trigger Article 50 without asking Parliament?

http://www.bbc.com/news/uk-politics-uk- ... u-36703799

I think this is a key question which will determine if and when Article 50 is invoked. Obviously, it can only be settled by legal experts.

[miltiades]

An interesting letter by Professor A C Grayling to all 650 MPs.

" Professor A C Grayling’s letter to all 650 MPs urging Parliament not to support a motion to trigger Article 50 of the Lisbon Treaty, 1 July 2016.

" In order for the UK to begin the process of leaving the EU, Parliament has to vote in favour of invoking Article 50. It is possible that complex constitutional issues might have to be settled in advance of such a vote, for example repeal of the 1972 European Communities Act. This is a matter that legal expertise is required to settle. But the key matter in the end is a vote on whether to initiate the Article 50 procedure.

Parliament as presently constituted has a substantial majority in favour of remaining in the EU. Given the following factors:"

" that the referendum was advisory only and non-binding,
that the majority for ‘Brexit’ was small (3.8%),
that there are major questions about the circumstances of the respective Remain and especially Leave campaigns regarding probity of information, claims and promises made to voters,
that a serious risk of break-up of the UK impends upon a ‘Brexit,’
that the economic consequences of a ‘Brexit’ are not in the UK’s favour,
that a ‘Brexit’ would damage our neighbours and partners in Europe,
and that the future of the young of our country is focally implicated in the decision,"

https://www.nchlondon.ac.uk/2016/07/01/ ... july-2016/

[Tim Drayton]

The boss of investment bank JP Morgan has warned that he may move thousands of jobs out of the City, if Britain loses full access to the single market.

Jamie Dimon told Bloomberg that it’s crucial that firms in London retain the ability to ‘passport’ into other EU countries and sell financial services there.
If that passporting rule is broken, then JP Morgan staff will be packing their bags.

Dimon explained:

“If we have that passport after Brexit, we likely would not have to make any change at all.
But I think the European Union will not accept that. It will put more conditions on the U.K. and might force banks to become smaller in London.”

https://www.theguardian.com/business/li ... etail-live

[Tim Drayton]

A revealing graph, wouldn't you say?

[repulsewarrior]

England it appears, is a one horse town. Britain it seems is made up of one horse villages. (if) There is no city, anymore.

i expect this revelation will awaken great efforts at innovation (regionally), on many different levels. Having an economy as large as France, Britain (united) has this potential,

...but it is the people themselves, having spoken, that must innovate and lead as it appears that those in government are not leaders.