Macroeconomics: UK economy, IB Economics

The British Chambers of Commerce have argued for a return to a more stable trading environment and closer relations with our trading partners in the EU. It would seem that there are, self-evidently, costs of Brexit. It's fascinating, though, to see that they stop short of calling for a reversal of Brexit.

I won't though. Brexit has been a disaster, but that's what you get when you allow a campaign based on lies to appeal to an audience of idiots.

No prizes for guessing what William Keegan's written about in today's Observer. Brexit.

However, for all its absence from the General Election campaign, he's not wrong. Britain would gain from rejoining the EU. 

Just another day in Brexitland and another story for the costs of Brexit folder: the flower industry is counting the cost of the new customs checks, delaying the shipping of fresh flowers from the Netherlands and increasing costs. 

To quote the great economist, Phil Tufnell: "What a time to be alive!".

New post-Brexit customs checks have come into force, and represent yet another cost of Brexit. Higher prices and less consumer choice, exactly what Leave voters chose. Proof that turkeys sometimes vote for Christmas.

As the article notes, a the co-owner of a flower company expects the border checks "to cost his business between £200,000 and £225,000 per year."

This Observer piece nails its colours to the mast: the introduction of customs checks three plus years after Brexit is going to be associated with a number of costs, increasing prices and inflation.

And, I would note, that this isn't yet full border checks - it's "inspections of some goods". So, for all the Leavers out there: where are the corresponding benefits? 

Who would have thought it? Can we have some Brexiteers onto the Today programme, Newsnight and other current affairs programmes to defend this?

Yet another delay to erecting trade barriers: we're not ready, they risk serious disruption and so on. And if they cause disruption in the short-run, what are the compensating benefits in the long-run? 

Another one for the costs of Brexit file. 

More costs of Brexit, less choice, and fewer small businesses. It's what we voted for apparently. 

I can scarcely think of anything meaningful to write here but the notion that Brexit is going to add £250m to food producers' costs because of a requirement to label meat and dairy products sold in the UK as "not for EU" is just typical of the nonsense that the post-Brexit environment has created. 

Oh dear! It seems that Brexit isn't actually the bed of roses that we were promised. Farmers across Europe, including those in the UK are objecting to post-Brexit imports from places like Australia and New Zealand, which have drastically reduced the profits being earned by British farmers. Who would have thought it?

Brexit perks. Ha. Lies, lies, lies. Anyone who wants to make the case for Brexit is welcome to, but they must know that they are demeaning themselves in the process. 

Four-year benefits of leaving the EU? Sales of honey to Saudi Arabia, pet food to India and pork exports worth £18m to Mexico. I might have to lie down in a darkened room such is my excitement. 

Here we go! Customs checks as part of the post-Brexit era, increasing the cost of imports. Think of how you might show this on an AD-AS diagram and its implications for the major macroeconomic objectives. 

One for the costs of Brexit file - with the introduction of new border controls next week, and the prospect of more red tape, longer customs delays and higher prices. What's not to like? 

One for the costs of Brexit file, with the news that UK-Canada trade negotiations have faltered over the issue of the UK permitting the import of hormone treated beef and the demands of Canadian cheesemakers.

As a result, having previously been trading with Canada on the same terms as the EU, we're now trading on worse terms, with car manufacturers and UK cheesemakers now facing tariffs on their exports. 

You really couldn't script it. Apart from the bits that you self-evidently could. 

The economy is today's election battleground and the Labour Party have received support from a number of prominent business leaders and promised that their manifesto pledges are all fully-funded.

The Prime Minister claims that their pledges will cost £2,000 per family, which sounds a little hollow from the party responsible for Brexit and recent tax increases, and which is only now pledging to lower taxes for pensioners ahead of everyone else. 

The choice, ultimately, is that of the electorate. And 2016 says something about turkeys voting for Christmas.

The National Audit Office are possibly my favourite source of policy insight, and they've discovered that Brexit border checks are going to cost the UK economy up to £470m per year. Another example of an obvious cost of Brexit, and I'd love a Leaver to explain to me how we're benefitting from this. 

Costs of Brexit. You could almost weep at the grim inevitability of it.

The second phase of UK-EU customs checks is here; what a boon it is for the UK, with the opportunity cost of the checks increasing the price of goods entering the UK and thus increasing inflation, whilst simultaneously reducing consumer choice. 

I'll just leave this here - scandalous, isn't it? And all so predictable. 

Brexit is, and was always going to be a farce. And here's more proof. 

Some very good examples of the impact of the new customs charges on small Scottish businesses, increasing costs for firms in a way that some are going to find untenable, and, as a result, may go out of business. Well done, Leave voters: I can only assume that this is what you voted for. 

One for the costs of Brexit file - I can't see how anyone involved in Brexit negotiations can argue that this is a good thing, with importing into the UK from the UK going to require an import charge of up to £145 per consignment. 

It's lucky that I made the switch to Vietnamese Brie, and Bolivian wine just in time, I guess. 

One for the costs of Brexit file, with data suggesting that UK food exporters have incurred extra costs selling to the EU, equivalent to £170m since 2019. This is clearly inefficient and it's also going to significantly reduce both profit margins and their incentive to sell to our closest trading partners. 

However, the distributional effects of this are most heavily concentrated upon SMEs who lack the resources to cope with the increased red tape and have invariably stopped exporting to the EU rather than incur these costs and this is desperately sad. 

William Keegan on...yes. you guessed it. 

This time there's consideration of local government debt, as a kind of bonus. However, the central arguments are the same: a mixture of austerity and Brexit are stopping the UK economy from prospering. 

Another effect of new Brexit food checks: reduced consumer choice, and with it reduced dynamic efficiency. Costs up, choice down. One for the costs of Brexit file, methinks. 

Tomorrow sees the introduction of Brexit food checks, effectively meaning that all the food imported from the EU requires checks and will need an extra day to get onto British supermarket shelves. If you voted to Leave, did you consider the self-evident fact that this is likely to increase food prices and mean that the produce you buy isn't as fresh as previously.

Of course you did, because the likes of Jacob Rees-Mogg told you that Brexit was going to lower food prices, and bring forth a veritable cornucopia of fresh produce from elsewhere. I for one, can scarcely leave the house before being assailed by sellers of rambutan, lychees and durrian these days. 

This BBC article looks at the implications of the failure of the UK and Canada to agree a trade deal for three of the main sectors of industry: cheese, beef and cars. Beyond the minutae of the sectors though - have a quick look at the overall impact of the putative trade deal - trade between the UK and Canada only accounts for 1.4% of total trade, so even if the deal is concluded it isn't going to have a major impact upon the UK economy.