Another Brexit benefit

[BillyStubbsTears]

Yeah I know Albie. Should have made it clear I wasn't disagreeing.

[Sprotyrover]

E10 Petrol €2.12 a litre in Germany!

[Colemans Left Hook]

Cost of food in France increased 14.90 percent in April of 2023 over the same month in the previous year.

I was just told the french food inflation was only 14% ( and it wasnt a trash programme) so at 14.8% its "a little bit extra" but that was April 

https://tradingeconomics.com/france/food-inflation

enjoy ......

[Glyn_Wigley]

E10 Petrol €2.12 a litre in Germany!

Now, if only Excise Duties were set by the EU and not the individual member states you might have a point!

Oh, and:

https://tradingeconomics.com/germany/gasoline-prices#:~:text=Gasoline%20Prices%20in%20Germany%20averaged,Liter%20in%20December%20of%202000.

[Branton Red]

German wage growth in 2022 was 4.1%. Wage growth in the UK in 2022 was 6.0%.

Real wages in Germany fell 3.4% in 2022. Real wages in the UK fell 2.0% in 2022.

Think how bad the cost of living crisis in the UK is and how much less you can buy with your £££.

Then consider that things are much worse in Germany.

Hence why Germany is in the midst of a nasty little recession and it's economy as shrunk by a not inconsiderable 0.75% in 6 months whilst the UK economy has stayed roughly the same size.

(Edit here got my % the wrong way round re Germany)

[Glyn_Wigley]

Presumably if all that is due to the EU then it'll be the same or similar in every EU member country?

[Branton Red]

Presumably if all that is due to the EU then it'll be the same or similar in every EU member country?

In the EU wages grew 4.4% and in the Euro area (a better comparator for the UK) 4.0% in 2022.

In France wages grew 3.7% and in Italy 2.1%.

So yes the UK is outperforming the EU in terms of wage growth quite considerably. Not just in 2022 but over the last few years.

In terms of real wage growth that is also dependent on cost inflation. Which is higher in Germany and the UK as both countries are heavily reliant on gas for their energy needs. But is lower in say France thanks to their nuclear power stations making them less reliant on gas.

[albie]

Over half of the French nuclear operations were out of action last winter, due to aging facilities requiring ongoing maintenance.

They are much less dependent upon gas for home heating than the UK, which is good, provided that they develop capacity for electricity production from renewable sources to replace their decrepit nuclear.

[Glyn_Wigley]

Presumably if all that is due to the EU then it'll be the same or similar in every EU member country?

In the EU wages grew 4.4% and in the Euro area (a better comparator for the UK) 4.0% in 2022.

In France wages grew 3.7% and in Italy 2.1%.

So yes the UK is outperforming the EU in terms of wage growth quite considerably. Not just in 2022 but over the last few years.

In terms of real wage growth that is also dependent on cost inflation. Which is higher in Germany and the UK as both countries are heavily reliant on gas for their energy needs. But is lower in say France thanks to their nuclear power stations making them less reliant on gas.

https://tradingeconomics.com/united-kingdom/real-earnings-including-bonuses

https://tradingeconomics.com/germany/wage-growth

https://tradingeconomics.com/france/wage-growth

https://tradingeconomics.com/european-union/wage-growth#:~:text=Wage%20Growth%20in%20European%20Union,the%20second%20quarter%20of%202021.

[Branton Red]

Wage growth UK 2022: 6.0%: -

https://tradingeconomics.com/united-kingdom/wage-growth

EU wage growth 2022 4.4% and Euro area wage growth 4.0%: -

https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20230420-1

UK is a significant outlier amongst Western European countries in terms of wage growth.

Which explains why Germany, a country similarly reliant on gas for energy, is in (quite a nasty little) recession but the UK is not.

[Glyn_Wigley]

You're talking gross wage growth. Normal people talk about it in real terms.

For example, wage growth in Germany in 1923 was phenomenal.

[albie]

We need to be careful about connecting economic performance directly with gas dependency.
"Which explains why Germany, a country similarly reliant on gas for energy, is in (quite a nasty little) recession but the UK is not."

There are 2 separate issues in play, gas reliance rather than electric, and the source of imported supplies.

The UK and Germany are in a very different place, because Germany has been reliant upon RUSSIAN gas.
https://thehill.com/policy/equilibrium-sustainability/3260553-these-european-countries-are-the-most-dependent-on-russian-gas/

The UK is not in that position:
https://commonslibrary.parliament.uk/research-briefings/cbp-9523/

In addition, the preparation for next winter will be based upon the need to minimise those imports.

[Branton Red]

Yes I'm talking about gross wage growth (surely most normal people when they're given their annual pay rise don't get home and declare "I've been given a x% real wage cut/increase today"??!!)

It's an important issue during a cost of living crisis which has been caused by prices rising quicker than gross wages.

The UK is benefiting from having relatively high nominal wage growth. But is suffering from having relatively high price inflation.

Germany which has had similar price inflation is suffering more than the UK as it has had lower wage inflation.

And it doesn't matter where the gas comes from in terms of the inflationary impact - there is a market price for gas regardless of source.

[Glyn_Wigley]

Yeah, normal people completely forget that their wages are growing more slowly than inflation.

[albie]

Of course it matters where the gas comes from.
Piped gas from Russia is lower cost than chilled LNG ,shipped by tanker and subject to terminal facility charges.

This is why there has been a big investment by Germany in LNG terminal capacity, to give import capability in compensation for Nord Stream pipeline supplies.
This has a cost implication going forward, as LNG is generally more expensive as a substitute.

Economies will look to reduce LNG dependence over time by reducing reliance on energy imports, starting with the volatile gas markets.
The inflationary impact will be greater in those economies dependent upon higher LNG import costs.

[BillyStubbsTears]

Germany has very foolishly relied on Russian gas as its main fuel source. Consequently it has been hit harder than anywhere else by the war. It's inevitable that its economy is struggling as a result.

This has bugger all to do with Brexit.

[Branton Red]

Of course Germany's recession has nothing to do with Brexit. That's not my point.

Faster wage growth in the UK compared to practically every country in the Eurozone is at least in part due to Brexit.

You can't accept the line that labour shortages in the UK are down to Brexit without equally accepting the point that said labour shortages must be pushing up wages.

As the supply of anything is constrained the price goes up. Basic economics.

Said wage growth must, by definition, be alleviating to a degree the cost of living crisis and the fall in real wages in the UK.

Hence, despite having similar price inflation to Germany, the UK has avoided a recession similar to theirs.

Brexit has caused labour shortages i.e. Brexit has reduced unemployment (lowest in over 50 years) and therefore Brexit has led to: -

- wages increasing faster than they would have otherwise (see my prior post)
- the cost of living crisis being less worse than it would have been otherwise
- the UK avoiding recession at the end of 2022/start of 2023

Sure Brexit has been bad for Corporations and therefore middle class owners of shares but comparative to those in the EU Brexit has benefited working people in the UK.

[BillyStubbsTears]

Branton.

What's your source that UK and German inflation have been similar?

The numbers I'm looking at say that UK inflation has consistently been around 2% higher than German inflation for 18 months.

Also, what's the cause and effect logic here?
"Hence (because of supposed higher UK real wage growth), despite having similar price inflation to Germany, the UK has avoided a recession similar to theirs."

[wilts rover]

Brexit had very little effect on wages (in most sectors) it was the pandemic and then rising inflation due to the war in Ukraine that has seen wages rise. A lot of people left the employment market - and never came back.

The rise was still below the level of infalation of course. So add that to the extra cost of imports & exports to/from the EU due to Brexit - it has undoubtably made people poorer. Unless you are a millionaire investor/utility CEO making obscene profits and then you are much better of. Which is of course who Brexit was intended to benefit all along.

https://researchbriefings.files.parliament.uk/documents/CBP-9366/CBP-9366.pdf

[Ldr]

So to summarise, anything bad = brexit anything good = despite brexit.

Easy guide that some on here seem to want to be gospel

[Ldr]

https://www.express.co.uk/comment/expresscomment/1775780/sir-keir-starmer-labour-rejoin-eu-brexit

[Ldr]

Before you lefties get your knickers in a twist about the paper it’s from this tweet https://twitter.com/keir_starmer/status/1663801783850786816?s=46&t=ineOQWVeqaGIc2ZoyBwTGA

[albie]

I wouldn't take Starmer at face value Ldr...he is not exactly honest and trustworthy, is he?

For a more intelligent comment on the situation, Prof Mazzacato is a bit higher up the food chain than Keith;
https://www.theguardian.com/commentisfree/2023/may/31/brexit-britain-future-economy-jaguar-land-rover-industrial-strategy

Good summary from a competent person there.

[BillyStubbsTears]

https://www.express.co.uk/comment/expresscomment/1775780/sir-keir-starmer-labour-rejoin-eu-brexit

I entirely understand why Starmer is doing this. The well of public debate on our relationship with Europe has been poisoned by a decade of bile from the Right and the far Left. You cannot have a nuanced debate about our relationship with Europe because it will immediately be flagged up by rags like the Express as "Starmer gives in to EU Nazis".

But this language from Starmer is awful. He's diving into the same cess pit as the far Right.

And he is setting himself a massive hostage to fortune. He cannot and will not make Brexit work, because there's no benefit to be had from it. So when he doesn't make Brexit work, what's his line going to be?

[Sprotyrover]

So how many billions £ have we saved since we stopped funding the French National Pension Scheme??? The increase in Frances retirement age clearly correlates to Brexit!

[Not Now Kato]

Now is the time to invest in the UK
 
https://www.youtube.com/watch?v=jz5jUMVfJP4
 

[Not Now Kato]

Nice to see it's still going well....
 
https://www.independent.co.uk/news/uk/politics/brexit-uk-eu-trade-imports-b2379743.html
 
Seems the Government still doesn't understand what Brexit really means, nor the deal that they themselves negotiated!

[i_ateallthepies]

I have now taken possession of my share of the entire Brexit dividend, a lovely blue passport.

[Sprotyrover]

Having just come back from a fortnight in Germany,I have to report that they are not happy, food prices through the roof, clothing prices, through the roof, petrol is £1.70 a litre in the sticks and £2.10 a litre on the Motorway , diesel 20p cheaper than Petrol. The  things which cheaper are beer, 90 p a 500 mil bottle in the supermarket but €5.60 in the Pub, hence 25% of Germanise pubs have shut down, and it’s very depressing to see so many lovely buildings going down the pan.I bought a bottle of Scotch (Ballantines) in the Super for €10.90. Looks like Covid killed the pubs, same as here but it’s common to see 3/4 Blokes stood in a town square drinking from a crate of 20 they bought in a shop. They take the empties back in the crate and get 8p refund. Everyone moaning about inflation.
Disappointed we left the EEC but I pointed out that they are not as disappointed as the French who have had to increase their pension age due to lack of our handouts!
I have been visiting Germany since I was a toddler and I have never seen it so run down. And that’s upsetting for me.

[danumdon]

Ive been visiting Italy since i was born and i can also vouch for a country that because of the one size has to fit all Euro (to the benefit of the Germans) has been decimated in its Industrial output,

The Euro was a deal made in hell for Italian industry, its basically still smaller now than it was at the turn of the century the price deferential has ruined long established businesses.

It improved the lot of your average bloke in the street but many will now be seeing the inside of dole offices that they didn't expect to see.

As for  run down, we are now talking middle eastern levels of destitution in some areas in the South.