Why is Brexit weakening the Pound?

[helpme]

Why not strengthen the pound instead? Why is Brexit bad for the pound? Can anyone explain?

 

[noirua]

Why not strengthen the pound instead? Why is Brexit bad for the pound? Can anyone explain?

The market is buying the story that the views from banks that growth will slow in the UK is a certainty. This combined with continued stories of millions of immigrants on their way assure the UK will exit the EU, at least this is today's view.
https://uk.finance.yahoo.com/news/factbox-banks-agree-brexit-bad-142635131.html

The UK covers England, Scotland, Wales and Northern Ireland. Not the Isle of Man and the British Channel Islands that are part of Britain but not the UK. Therefore not in the EU.

Scotland tends to support membership of the EU, about 5 million people. This tends to be the view of Wales who benefit from EU funding.

 

[helpme]

The market is buying the story that the views from banks that growth will slow in the UK is a certainty. This combined with continued stories of millions of immigrants on their way assure the UK will exit the EU, at least this is today's view.
https://uk.finance.yahoo.com/news/factbox-banks-agree-brexit-bad-142635131.html

The UK covers England, Scotland, Wales and Northern Ireland. Not the Isle of Man and the British Channel Islands that are part of Britain but not the UK. Therefore not in the EU.

Scotland tends to support membership of the EU, about 5 million people. This tends to be the view of Wales who benefit from EU funding.

Some reasons provided by "The Economist".

http://www.economist.com/blogs/economist-explains/2016/02/economist-explains-11
- Investors dislike uncertainty. A few months ago, they were pretty confident that Britain would vote to remain in the EU but they are less certain now; the bookmakers Paddy Power give odds of Brexit of around a third.
- Another worry is that foreign companies might be less inclined to invest in Britain if it leaves the EU, and has more limited access to the single market.
- renegotiate trade agreement deals with other countries. Could turn out to have worse terms.

 

[noirua]

Some reasons provided by "The Economist".

http://www.economist.com/blogs/economist-explains/2016/02/economist-explains-11
- Investors dislike uncertainty. A few months ago, they were pretty confident that Britain would vote to remain in the EU but they are less certain now; the bookmakers Paddy Power give odds of Brexit of around a third.
- Another worry is that foreign companies might be less inclined to invest in Britain if it leaves the EU, and has more limited access to the single market.
- renegotiate trade agreement deals with other countries. Could turn out to have worse terms.

Well, time has passed since February and now it looks as if the UK will exit the European Union. However, the polls are biased on the slant they take with some areas up to 80% to exit and others up to 70% to remain. So it depends who foots the bill for the poll and their view on which way it goes.

How does it affect Aussies? Well not that much due to distance, though investment and financial ties are a key. Exit would mean Europeans do not have an advantage over non-Europeans getting a job - must admit I've lost track of this and leave matters to paid advisors. The UK is less vigilant than Australia on legal matters and it's easy to get lost in the system here. Australia will remember you many years after leaving and the UK doesn't, even though you've been there many years.

Back to Brexit, only matters if you have assets in the UK or cash in £s. Otherwise breeze on regardless.

 

[eskep]

Well, time has passed since February and now it looks as if the UK will exit the European Union. However, the polls are biased on the slant they take with some areas up to 80% to exit and others up to 70% to remain. So it depends who foots the bill for the poll and their view on which way it goes.

How does it affect Aussies? Well not that much due to distance, though investment and financial ties are a key. Exit would mean Europeans do not have an advantage over non-Europeans getting a job - must admit I've lost track of this and leave matters to paid advisors. The UK is less vigilant than Australia on legal matters and it's easy to get lost in the system here. Australia will remember you many years after leaving and the UK doesn't, even though you've been there many years.

Back to Brexit, only matters if you have assets in the UK or cash in £s. Otherwise breeze on regardless.

A brexit will never happen within the next 4 years if it does ill eat my shoe

 

[qldfrog]

I would refine this: a brexit will not happen, regardless of the vote results.

 

[galumay]

I would refine this: a brexit will not happen, regardless of the vote results.

I think that is most likely, the economic consequences of a brexit would be devastating for the UK, the effects of the massive rise in unemployment alone would cripple the country. Its populist xenophobia at its worst.

 

[qldfrog]

I think that is most likely, the economic consequences of a brexit would be devastating for the UK, the effects of the massive rise in unemployment alone would cripple the country. Its populist xenophobia at its worst.

It has been a long while since voters have had any power/choice .This referendum will be a clear demonstration ... irrespective of the merit or not of the exit

 

[noirua]

It has been a long while since voters have had any power/choice .This referendum will be a clear demonstration ... irrespective of the merit or not of the exit

The ongoing AOL poll on the UK's EU Referendum shows 81% in favour of BREXIT and 17% for remain - the trend is gathering pace. A major financial backer of the ruling Conservative party has withdrawn. If the UK exits then France could follow quite quickly.
The problem could be that those backing remain, former PMs Blair, Brown and Major are somewhat tarnished individuals and the more they speak the worse it gets. Blair over Iraq, Brown in the Financial collapse and Major who failed on Europe and put the Conservatives out of power for many years.

 

[eskep]

The ongoing AOL poll on the UK's EU Referendum shows 81% in favour of BREXIT and 17% for remain - the trend is gathering pace. A major financial backer of the ruling Conservative party has withdrawn. If the UK exits then France could follow quite quickly.
The problem could be that those backing remain, former PMs Blair, Brown and Major are somewhat tarnished individuals and the more they speak the worse it gets. Blair over Iraq, Brown in the Financial collapse and Major who failed on Europe and put the Conservatives out of power for many years.

what most voters dont understand is EVEN if they vote out it will take at least 4 years just to negotiate the exit : the pound will fall, laws will be changed, it will be turbulent

 

[McLovin]

Its populist xenophobia at its worst.

I don't know about that, gal. The European Commission acts like some sort of high council from the middle ages. Mitterrand said in the 1980s, when they were drafting the Maastricht Treaty, that fiscal union was political suicide for every France and Germany (and no doubt Britain), but that at some point in the future a financial crisis would force the EU to integrate further. Well, it's been eight years and the EU looks more fractured and dysfunctional than ever. The problem for the EU, that it has never dealt with, is that at its core it's a steel cartel. It has had the instruments of statehood piled on top of that, but the institutions (or mandate) have never been dealt with, probably because it would be too hard to actually tell the citizens of Europe that they are ceding some of their sovereignty. Look at the underhanded way in which the Treaty of Lisbon was rammed down the throats of Europeans. Britons were promised a vote on the issue, never came. The Dutch and French rejected it so they rejigged it. The Irish rejected it, so they called another vote on it. And now the EU wonders why its so distrusted by Europeans.

IMO, the EU should be rolled back to a trade bloc with some limited free movement of labour, principally between the original Maastricht treaty countries.

 

[Rainman]

Boris Johnson said about the case for Brexit that it is not the UK that has changed. It is the EU.

As the EU's legislative tentacles have encroached further and further into the sovereignty of its member states, it is hard to argue against that.

 

[notting]

Boris Johnson said about the case for Brexit that it is not the UK that has changed. It is the EU.

As the EU's legislative tentacles have encroached further and further into the sovereignty of its member states, it is hard to argue against that.

Tentacles?

Poles say Brexit is 6% ahead.
Bets say 2:1 not going to happen.
Bets win.

 

[Rainman]

Tentacles?

Poles say Brexit is 6% ahead.
Bets say 2:1 not going to happen.
Bets win.

You omitted the "legislative" part.

EU regulations now account for 59.3% of all UK law. These regulations are transposed onto UK law without passing through Parliament. The growth in EU regulations shows no sign of slowing: https://forbritain.org/percentagelaws.pdf.

Loss of legislative sovereignty on this scale was never part of the original rationale for the UK joining the EU.

 

[notting]

You omitted the "legislative" part.

No, I chose the scare word.

If you have joined a new and complex union of course there is going to be tweaks and new laws etc to improve it. As if the Torry's would back a back step.