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Julian Jessop Profile picture
@julianHjessop
Jun 27, 2019 • 4 tweets • 4 min read • Read on X
Beware the latest dire warnings about the impact of #Brexit on the #tech sector. Main fear seems to be the impact on skilled #migration from the EU, but this would be entirely in the UK government’s hands to manage. Tech is also one of the most global of industries... (1/4)
The UK’s advantages as a location for #tech investment are also largely #Brexit-proof or might actually be strengthened by leaving (e.g. chance to escape some of the crazier regulations). Loss of EU official funding is a red herring too, since the UK is a net contributor... (2/4)
There is some evidence that #Brexit uncertainty is holding back private #investment in the #tech sector – as it is in the economy as a whole. But the UK still tops the league tables and any pause is likely to be temporary. See this from KPMG... (3/4)
kpmgenterprise.co.uk/perspectives/v…
#ProjectFear headlines have focused on the decline in the number of venture capital deals done in the UK #tech sector. But this is happening elsewhere in Europe too, as the economy slows and confidence falters, and even in France, which some now see as UK's main rival here. (4/4)

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More from @julianHjessop

Julian Jessop Profile picture
Dec 5
My 'unicorn' chart posted yesterday (👇) has prompted a lot of interest but also some objections.

I can't reply individually to everyone, but here are some of the more sensible questions - with my answers... 🧵

(I suggest you read all 10 before asking any more!) Image
Q1. Now do GDP per head!!

A: Here you go (an 8% Brexit hit still looks implausibly large to me)... Image
Q2. Haven't France and Germany also have been hit by Brexit?

A: Any negative impact on the UK should have been much greater. Brexit has made it harder for the UK to trade with 27 EU countries, but just one in the case of France or Germany. UK trade with the EU is also a much larger share of UK GDP than it is of EU GDP.
Read 11 tweets
Julian Jessop Profile picture
Dec 1
Four reasons to resist the siren calls for a new UK-EU Customs Union... ⚠️

1⃣ most UK-EU trade is already tariff-free (as long as 'rules of origin' are met), but a UK-EU Customs Union would mean higher tariffs on UK trade with the rest of the world... 🧵
2⃣ there would still need to be checks at the border, especially if the UK remained outside the EU's Single Market and Schengen, so a Customs Union would not deliver 'frictionless trade'...
3⃣ the UK would have no say in EU trade policy but would be forced to copy it, and the ability to do independent trade deals with other countries would be severely limited...

#sovereignty
Read 4 tweets
Julian Jessop Profile picture
Nov 23
I've finally had a chance to review the NBER 'working paper' which claims that Brexit has already reduced UK GDP by 8% since the vote to leave in 2016... 🤔

At first sight, this figure fails a simple 'smell test'. A closer look confirms that the analysis is flawed... 🧵
1⃣ for context, the UK economy has grown by about 12% since 2016, outpacing Japan, Germany, Italy and France. If you add another 8% the UK would have been the fastest growing economy in the G7 - bar only the US - and left its EU peers far behind.

Not impossible, but unlikely... Image
2⃣ So how did the NBER get 8%?

They've compared the UK's per capita GDP growth since 2016 to a wide range of other countries and assumed any underperformance must have been due to Brexit.

This chart looks bad, right? 😲 Image
Read 12 tweets
Julian Jessop Profile picture
Nov 21
Four points on the news that the Ofgem cap will rise by 0.2% in January... 🧵

1⃣ this may only be a tiny increase, but there had been hopes that the 4% decline in wholesale costs over the past three months would allow the cap to be lowered...

ofgem.gov.uk/press-release/…
2⃣ bills have been kept high instead by increases in "government policy costs and operating costs".

These includes the costs of extending the Warm Home Discount (WHD), which are born by other bill payers, and a contribution to the costs of the Sizewell C nuclear project...
3⃣ nonetheless, the annual rate of inflation for domestic energy bills will still fall in January. This is simply because the 0.2% increase in the level of prices will still be smaller than the 5% rise in January 2025...
Read 4 tweets
Julian Jessop Profile picture
Nov 13
"Starmer and Reeves ditch Budget plan to raise income tax rates" (FT)

Good grief...

1️⃣ This latest and biggest U-turn is presumably a political decision, made by No.10 to try to save Starmer, which risks shredding any credibility with the markets... 🧵 Image
Image
2️⃣ It's not entirely clear whether this U-turn applies to the plan to raise the higher and additional rates, or just the basic rate. But it's hard to raise a lot of money without increasing all three.

Indeed, just increasing the additional rate may not raise any money at all...
3️⃣ The likely alternative is some combination of lowering the tax thresholds (breaching the spirit of the manifesto, if not the letter) and an even bigger dog's breakfast of smaller tax changes mainly targeting the 'wealthy' (many of which had been rejected as too harmful)...
Read 4 tweets
Julian Jessop Profile picture
Aug 24
IMHO, the UK is in the early stages of the next crisis, but we're not heading to the IMF... 🧵

1⃣ the 1976 bailout was a US$ loan used to pay back other countries who had lent foreign currencies to the UK gov't as it attempted to prop up the pound. That's not the problem now...
2⃣ any IMF bailout would come with such punitive conditions - including big cuts in public spending - that it would be politically unacceptable.

Put another way, if the UK government were willing to take these tough decisions, we wouldn't need the IMF in the first place...
3⃣ the IMF simply doesn't have the resources to bail out an economy as large as the UK.

This is compounded by the fact that many other countries are now in the same boat, including other IMF members who would have to approve the loan.
Read 4 tweets

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