The British Prime Minister Theresa May's resignation looks likely to make the UK's looming departure from the EU even more difficult, with some suggesting a hard or "no-deal" Brexit is now almost inevitable.
While there remains a good number of hard core Eurosceptics who relish the idea of leaving the EU, there are many even within the Conservative party that think the referendum has brought only chaos.
Speaking in March this year Charles Walker, the Conservative MP for Broxbourne, told one Chinese television news crew that he expected only more chaos to follow after MPs rejected the Withdrawal Agreement for a second time.
He also expressed regret at there ever having been a referendum. "To the day I die I will curse myself for ever thinking that a referendum was a good idea," he told the BBC [New European].
Many others within the party might also be regretful, even if they don't express such thoughts publicly.
The vote to leave the European Union has cost the party two prime ministers, a loss in public support and a reduced majority in the parliament.
Indeed, while many hard-line Eurosceptics and Brexiters refuse to accept it, the country has lost more than just a couple of prime ministers.
Cost to the country
The British pound tanked the day after the referendum and has yet to recover. And following the Theresa May's announcement to stand down as PM, the currency became volatile once again as a no-deal Brexit risk was seen to rise.
While many Brexiters have insisted a weaker pound would increase Britain's exports, due to them being cheaper, there is little sign that exports have risen at all in the last three years.
In fact there is more a sign that the British economy and its manufacturing base is flailing.
Economic contraction
The latest surveys of business activity, used as an early warning indicator by the Bank of England, showed the economy stalling in the first quarter and at risk of sliding into a downturn, after the weakest performance in the private sector in almost seven years.
The surveys have proven gloomier than official figures over the past few months, although still paint a worrying picture for the path ahead, as British firms put spending decisions on hold.
According to the survey from IHS Markit and the Chartered Institute of Procurement and Supply, both the construction and service sectors plunged into reverse in March, while manufacturing was only able to expand because of emergency stockpiling in the run-up to Brexit.
Trillions of assets left the UK
Ahead of the original date the UK was set to leave the European Union more than £1 trillion in assets had reportedly been shifted out of London to hubs in the European Union [Reuters].
And while Britain did not in fact leave on 29th March, it is unlikely these assets will return - at least in the short to medium term.
Relocations & slowing investment
The continuing uncertainty surrounding Brexit, and fears of a no-deal Brexit, has slowed investment and some businesses have either relocated completely or moved some of their operations abroad [Independent].
Business investment has fallen for the past four quarters and the new Brexit date is likely to prolong the uncertainty, the FT reported in April [FT].
Global slowdown
Brexiters might point to the fact that there is a global slowdown and that the Eurozone is slowing too. This is partly true. However, over the last decade the Eurozone has strengthened [BBC], and growth in the eurozone jumped to +0.4% in the first quarter of this year, stronger than the meagre 0.2% recorded in Q4 2018 [Guardian].
On the other side of the pond, the US is seeing an economic decline [Reuters].
Brexit costs Tories two leaders
While there remains a good number of hard core Eurosceptics who relish the idea of leaving the EU, there are many even within the Conservative party that think the referendum has brought only chaos.
Speaking in March this year Charles Walker, the Conservative MP for Broxbourne, told one Chinese television news crew that he expected only more chaos to follow after MPs rejected the Withdrawal Agreement for a second time.
He also expressed regret at there ever having been a referendum. "To the day I die I will curse myself for ever thinking that a referendum was a good idea," he told the BBC [New European].
Many others within the party might also be regretful, even if they don't express such thoughts publicly.
The vote to leave the European Union has cost the party two prime ministers, a loss in public support and a reduced majority in the parliament.
Indeed, while many hard-line Eurosceptics and Brexiters refuse to accept it, the country has lost more than just a couple of prime ministers.
Cost to the country
The British pound tanked the day after the referendum and has yet to recover. And following the Theresa May's announcement to stand down as PM, the currency became volatile once again as a no-deal Brexit risk was seen to rise.
While many Brexiters have insisted a weaker pound would increase Britain's exports, due to them being cheaper, there is little sign that exports have risen at all in the last three years.
In fact there is more a sign that the British economy and its manufacturing base is flailing.
Economic contraction
The latest surveys of business activity, used as an early warning indicator by the Bank of England, showed the economy stalling in the first quarter and at risk of sliding into a downturn, after the weakest performance in the private sector in almost seven years.
The surveys have proven gloomier than official figures over the past few months, although still paint a worrying picture for the path ahead, as British firms put spending decisions on hold.
According to the survey from IHS Markit and the Chartered Institute of Procurement and Supply, both the construction and service sectors plunged into reverse in March, while manufacturing was only able to expand because of emergency stockpiling in the run-up to Brexit.
Trillions of assets left the UK
Ahead of the original date the UK was set to leave the European Union more than £1 trillion in assets had reportedly been shifted out of London to hubs in the European Union [Reuters].
And while Britain did not in fact leave on 29th March, it is unlikely these assets will return - at least in the short to medium term.
Relocations & slowing investment
The continuing uncertainty surrounding Brexit, and fears of a no-deal Brexit, has slowed investment and some businesses have either relocated completely or moved some of their operations abroad [Independent].
Business investment has fallen for the past four quarters and the new Brexit date is likely to prolong the uncertainty, the FT reported in April [FT].
Global slowdown
Brexiters might point to the fact that there is a global slowdown and that the Eurozone is slowing too. This is partly true. However, over the last decade the Eurozone has strengthened [BBC], and growth in the eurozone jumped to +0.4% in the first quarter of this year, stronger than the meagre 0.2% recorded in Q4 2018 [Guardian].
On the other side of the pond, the US is seeing an economic decline [Reuters].
The loss of momentum came even before a recent escalation in the trade war between the United States and China which could have a significant effect on the US economy.
Insulation against a global economic slowdown
While the trade war started by Trump is certainly having an effect on the Chinese economy, China is unlikely to suffer in the medium to long term. Growth is currently 6.9% and even if that were to shrink by half as some economists are predicting [Forbes], China's growth would still remain higher than most other major economies.
That is more than double that of the UK's overall current 1.5% growth rate and a third higher than the US growth rate which stands at a little over 2.2% [Sky News / Guardian].
The bigger a trade block the more insulated it will be should there be a global downturn. For small country and those not part of a large trading block, the risks are higher.The world economic slowdown and Brexit uncertainty have already combined to inflict damage to investment and output in Britain.
Insulation against a global economic slowdown
While the trade war started by Trump is certainly having an effect on the Chinese economy, China is unlikely to suffer in the medium to long term. Growth is currently 6.9% and even if that were to shrink by half as some economists are predicting [Forbes], China's growth would still remain higher than most other major economies.
That is more than double that of the UK's overall current 1.5% growth rate and a third higher than the US growth rate which stands at a little over 2.2% [Sky News / Guardian].
The bigger a trade block the more insulated it will be should there be a global downturn. For small country and those not part of a large trading block, the risks are higher.The world economic slowdown and Brexit uncertainty have already combined to inflict damage to investment and output in Britain.
Escalating trade war
And things could get much worse if the US-China trade war escalates.
President Trump's targeting China's flagship mobile company Huawei has angered the Middle Kingdom to such an extent that there is talk that China could respond with more than just an increase in tariffs on US goods. And other countries could become embroiled as Trump has threatened countries that do business with Huawei [Guardian].
China is currently the largest holder of US government debt. It now owns $1.12 trillion in US Treasury bonds. If China decided to sell off its US government debt holdings as a form of retaliation in the ongoing trade war with the US and President Donald Trump, it could upend global financial markets and drive US interest rates higher.
Many have dismissed such a possibility - which has often been referred to as China's 'nuclear option' - for the fear it could not only upend the global economy but also China's own economy.
China is already make plans to be more self-sufficient and less reliant on foreign markets. And if push comes to shove, China might close its doors, just as easily as it opened them to the West some thirty years ago.
Only last week investors received some unnerving news after China sold $20 billion of securities with a maturity exceeding one year in March, according to US government data. The sales amounted to China's largest retreat from the market in more than two years and could indicate Beijing's readiness to up the stakes if Trump pursues his trade war against the second largest economy in the world [FT].
Many economists do not believe China would go for a large sell of of US treasuries. But not everyone is so sure. "It depends on what the goal is," says Torsten Slok, chief economist at Deutsche Bank Securities in New York. "If the goal is to disturb the US Treasury market, then they may not care about inflicting self-harm." [SCMP]
Brexit risks further isolation
And things could get much worse if the US-China trade war escalates.
President Trump's targeting China's flagship mobile company Huawei has angered the Middle Kingdom to such an extent that there is talk that China could respond with more than just an increase in tariffs on US goods. And other countries could become embroiled as Trump has threatened countries that do business with Huawei [Guardian].
China is currently the largest holder of US government debt. It now owns $1.12 trillion in US Treasury bonds. If China decided to sell off its US government debt holdings as a form of retaliation in the ongoing trade war with the US and President Donald Trump, it could upend global financial markets and drive US interest rates higher.
Many have dismissed such a possibility - which has often been referred to as China's 'nuclear option' - for the fear it could not only upend the global economy but also China's own economy.
China is already make plans to be more self-sufficient and less reliant on foreign markets. And if push comes to shove, China might close its doors, just as easily as it opened them to the West some thirty years ago.
Only last week investors received some unnerving news after China sold $20 billion of securities with a maturity exceeding one year in March, according to US government data. The sales amounted to China's largest retreat from the market in more than two years and could indicate Beijing's readiness to up the stakes if Trump pursues his trade war against the second largest economy in the world [FT].
Many economists do not believe China would go for a large sell of of US treasuries. But not everyone is so sure. "It depends on what the goal is," says Torsten Slok, chief economist at Deutsche Bank Securities in New York. "If the goal is to disturb the US Treasury market, then they may not care about inflicting self-harm." [SCMP]
Brexit risks further isolation
But what has all this got to do with Brexit? With the global economy currently displaying signs of unpredictability and volatility, it is important to create as much insulation as possible.
If Britain cuts itself off from its biggest trading partner, that being Europe, and worse, crashes out without a deal and falls back on WTO rules, it would find itself in a very dangerous place if, as has been predicted, another global recession returns.
Even if a global recession does not immediately materialise, trade deals are not going to be easy to draw up as the unease grows over Trump's trade war and concerns over global growth. And even if trade deals are able to be negotiated, they are far less likely to be favourable for Britain than to those with which it is negotiating.
Britain could find itself in some very choppy waters indeed as it would be forced to appease two of the biggest economies in the world with which it does significant trade, outside of the eurozone, and which are currently fighting each other in an ever growing trade war.
With Theresa May's departure the prospect of such scenarios are more real than ever. Most of the main Tory leadership contenders lean towards a no-deal Brexit, especially the favourite Boris Johnson.
The talk heard from several of them is that they could 'renegotiate the Withdrawal Agreement', something the EU has repeated time and time again will not be done.
Speaking on College Green soon after May announced her departure, Mark Francois said he'd prefer to leave with a deal, but that if one could not be negotiated by 31st October than Britain could leave on WTO rules for a time and then negotiate a deal with the EU soon thereafter.
Boris Johnson, speaking in Switzerland, spoke similarly suggesting the Irish backstop could be dropped and that if a deal with the EU was not reached by October then Britain would simply fall back on WTO rules.
And so where do we go from here? "Oblivion," joked Alastair Campbell as he walked from College Green. It might have been a quip, but Halloween may be far more frightful than many might have thought.
tvnewswatch, London, UK
If Britain cuts itself off from its biggest trading partner, that being Europe, and worse, crashes out without a deal and falls back on WTO rules, it would find itself in a very dangerous place if, as has been predicted, another global recession returns.
Even if a global recession does not immediately materialise, trade deals are not going to be easy to draw up as the unease grows over Trump's trade war and concerns over global growth. And even if trade deals are able to be negotiated, they are far less likely to be favourable for Britain than to those with which it is negotiating.
Britain could find itself in some very choppy waters indeed as it would be forced to appease two of the biggest economies in the world with which it does significant trade, outside of the eurozone, and which are currently fighting each other in an ever growing trade war.
With Theresa May's departure the prospect of such scenarios are more real than ever. Most of the main Tory leadership contenders lean towards a no-deal Brexit, especially the favourite Boris Johnson.
The talk heard from several of them is that they could 'renegotiate the Withdrawal Agreement', something the EU has repeated time and time again will not be done.
Speaking on College Green soon after May announced her departure, Mark Francois said he'd prefer to leave with a deal, but that if one could not be negotiated by 31st October than Britain could leave on WTO rules for a time and then negotiate a deal with the EU soon thereafter.
Boris Johnson, speaking in Switzerland, spoke similarly suggesting the Irish backstop could be dropped and that if a deal with the EU was not reached by October then Britain would simply fall back on WTO rules.
And so where do we go from here? "Oblivion," joked Alastair Campbell as he walked from College Green. It might have been a quip, but Halloween may be far more frightful than many might have thought.
tvnewswatch, London, UK
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