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The UK Economy & Brexit: what does it mean? Christian Spence - - PowerPoint PPT Presentation

Jan 05, 2023 318 likes •501 views

Sefton Economic Forum The UK Economy & Brexit: what does it mean? Christian Spence Head of Research & Policy Greater Manchester Chamber of Commerce www.gmchamber.co.uk/ research www.gmchamber.co.uk/ research UK Output and Consumer

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www.gmchamber.co.uk/research

The UK Economy & Brexit: what does it mean?

Christian Spence Head of Research & Policy Greater Manchester Chamber of Commerce Sefton Economic Forum

www.gmchamber.co.uk/research

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UK Output and Consumer Demand ONS data

Source: ONS Preliminary Estimate of GDP, October 2016 Source: ONS Retail Sales, September 2016

  • 8
  • 6
  • 4
  • 2

2 4 6

  • 20
  • 15
  • 10
  • 5

5 10 15 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 Q2

GDP and Sectoral Growth Rates

Manufacturing Construction Services GDP (RHS) 80 85 90 95 100 105 110 115 120 2007 APR 2009 APR 2011 APR 2013 APR 2015 APR

Retail Sales

Value Volume

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UK Demand QES UK Sales

Source: LSCC QES Q3 2016 Source: LSCC QES Q3 2016

  • 60
  • 40
  • 20

20 40 60 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LiverpoolManufacturing NWManufacturing UKManufacturing

  • 60
  • 40
  • 20

20 40 60 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LiverpoolServices NWServices UKServices

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International Demand QES Export Sales

Source: LSCC QES Q3 2016 Source: LSCC QES Q3 2016

  • 40
  • 20

20 40 60 80 100 120 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 LiverpoolManufacturing NWManufacturing UKManufacturing

  • 40
  • 20

20 40 60 80 100 120 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 LiverpoolServices NWServices UKServices

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Labour Market QES Employment (this quarter)

Source: LSCC QES Q3 2016 Source: LSCC QES Q3 2016

  • 60
  • 40
  • 20

20 40 60 80 100 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 LiverpoolServices NWServices UKServices

  • 60
  • 40
  • 20

20 40 60 80 100 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 LiverpoolManufacturing NWManufacturing UKManufacturing

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Confidence & Investment QES Investment

Source: LSCC QES Q3 2016 Source: LSCC QES Q3 2016

  • 60
  • 40
  • 20

20 40 60 80 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015

Plant & Machinery

LiverpoolManufacturing NWManufacturing UKManufacturing

  • 40
  • 30
  • 20
  • 10

10 20 30 40 50 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015

Plant & Machinery

LiverpoolServices NWServices UKServices

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Costs & Prices QES Price Intentions

Source: LSCC QES Q3 2016 Source: LSCC QES Q3 2016

  • 20
  • 10

10 20 30 40 50 60 70 80 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 LiverpoolManufacturing NWManufacturing UKManufacturing

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  • 10

10 20 30 40 50 60 70 80 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015 LiverpoolServices NWServices UKServices

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  • Costs & Prices QES Price Pressures

Source: LSCC QES Q3 2016 Source: LSCC QES Q3 2016

10 20 30 40 50 60 70 80 90 100 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015

Raw Materials

LiverpoolManufacturing NWManufacturing UKManufacturing 10 20 30 40 50 60 70 80 90 100 Q2 2007 Q2 2009 Q2 2011 Q2 2013 Q2 2015

Exchange Rates

LiverpoolManufacturing NWManufacturing UKManufacturing

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Brexit and the Future of International Trade

Sefton Economic Forum

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Brexit and the Future of International Trade

1.Continuing relationship with the EU

  • Article 50 negotiations
  • Exit options
  • “Soft” and “Hard” Brexit?

2.The future of international trade

  • Tariffs vs. Regulations
  • Bilateral vs. Multilateral
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  • 1. Continuing Relationship with the EU

What are the options?

  • EEA/EFTA based-option – (Something similar to Norway)
  • Full participation in single market – nothing much changes in terms of trade.
  • No direct say over EU matters, but we would gain a seat on global regulatory bodies.
  • The framework required is already in place (an “off-the-shelf” option)
  • Bilateral Deals – (Something similar to Switzerland)
  • Multiple bilateral deals with the EU on specific aspects of trade.
  • More scope to tailor specific arrangements.
  • Must accept some EU law in return – bargaining involved.
  • Time and effort intensive – would be a start from scratch.
  • Something more bespoke
  • Could be significantly time and effort intensive
  • Would likely be based upon existing framework
  • Could be difficult to negotiate
  • World Trade Organisation – all ties with EU severed
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www.gmchamber.co.uk/research

  • 1. Continuing Relationship with the EU

“Hard” Brexit? Or “Soft” Brexit?

  • Not particularly useful terms – no clear definitions.
  • Government seems to be leaning towards “hard” at this point.
  • But are they increasingly seeing it as the finishing line instead of a

first step? Transitional arrangements are key.

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  • 2. The Future of International Trade

Tariffs Vs. Regulation

  • What do we mean by “trade deal”?
  • The trade deals we keep hearing about only deal with monetary tariffs.
  • These are the 53 that the EU has with non-EU countries.
  • These are the ones being spoken about by Liam Fox (mostly).
  • Non-tariff barriers (NTBs) are the real issue…
  • The EU has around 38 NTB deals with the USA and 63 with China, but none

specifically on tariffs.

  • The WTO option would see us lose these agreements, WTO rules alone are

not enough.

  • If you are not talking about regulation, you are not talking

about trade…

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  • 2. The Future of International Trade

Bilateral Vs Multilateral

  • Bilateral trade deals (between two countries) are increasingly outdated
  • Globalisation is increasingly multilateral (agreements that apply to all who are

signed up)

  • Through global regulatory bodies, a global single market is taking

shape.

  • United Nations Economic Commission for Europe (UNECE)
  • Codex Alimentarius – setting global food and agriculture standards
  • International Labour Organisation (ILO)
  • The EU is increasingly a rule-taker not a rule-maker
  • The future of trade is in International Regulatory Cooperation
  • Britain can be at the forefront of this movement outside the EU – a real
  • pportunity to lead global trade.
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Final Thoughts

  • Brexit is a process, not an event…
  • Article 50 gives us an initial negotiation of 2 years
  • Where should we be at the end of this?
  • What would the next steps be?
  • Can a bespoke arrangement be achieved in this time?
  • Securing EU Trade relations is vital
  • We need a solid footing from which to progress…
  • International trade is changing…
  • Britain could become the leader in International Regulatory

Cooperation…

  • It’s time to think big…
  • What other opportunities are there to be had?
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Stay up to date! For weekly updates and reading lists see our “Last Week In Brexit” blogs at: WWW.GMCCEUREF.CO.UK Follow our EU specialist, Alex Davies, on Twitter: @GMCC_Alex

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The UK Economy & Brexit: what does it mean?

Christian Spence Head of Research & Policy Greater Manchester Chamber of Commerce christian.spence@gmchamber.co.uk | @GMCCResearch

Sefton Economic Forum

www.gmchamber.co.uk/research