Brexit

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The odds are completely against Jeremy Corbyn still being the Labour leader by the time of the next election, according to Ladbrokes this morning. Britain's main opposition party has imploded since the country narrowly voted to leave the EU on Thursday, with 19 shadow cabinet members resigning so far.

bookmakers' odds on the contenders for Labour and Conservative leaderships - Business Insider

Unemployment to hit 5.9% in 2017. "The UK economy is likely to enter a period of stagflation … This decision to leave the EU, in our view, will exacerbate current elevated levels of uncertainty and thus amplify already slowing economic momentum."

ANALYSTS: Brexit will bring recession ... and contagion - Business Insider

European diplomats have dismissed claims from Boris Johnson that the UK could negotiate access to the EU single market without obeying any of the rules. “You cannot have your cake and eat it,” said an EU diplomat, echoing a phrase the former mayor of London used during the campaign and which looks set to come back to haunt him. In a further blow to the leave camp’s credibility, Germany’s leading business group distanced itself from Johnson’s suggestion that German business expected Britain’s free trade with Europe to continue seamlessly.

Brussels rejects Boris Johnson 'pipe dream' over single market access | Politics | The Guardian

At the heart of Brexit is an act of self-harm to the UK’s trading industry (including, and perhaps especially, trade in services). But this is something that will evolve over the medium term as we gradually lose the benefits of the single market. It essentially means it will become more difficult for UK firms to sell stuff to the EU. Calculating the size of this effect is an exercise in trade economics not macroeconomics (see here for example). So it is not ‘intellectual arrogance’ to do this kind of analysis even if you think macro models have been a failure over the last 40 years. This decline in trade leads to a loss in productivity which makes UK citizens poorer over the medium term. It also means that the real value of sterling has to fall to make up for the fall in net exports (any decline in imports that result from leaving the single market will be less than the fall in exports). Other things being equal, this fall in sterling will happen immediately, as indeed it already has.

mainly macro: Just how bad will Brexit be, and can it be undone?

But a second referendum would not be necessary if, as a result of Cameron’s resignation, the UK fought a general election where the winning side explicitly campaigned not to invoke Article 50. This general election would become the second referendum. For this to happen three rather difficult but not impossible things have to happen. The first is that the Labour leadership need to stop talking about ‘respecting the will of the people’ and focus on how the Leave side are already owning up to their lies and false promises. The second, and perhaps most difficult, is that Labour need to form a united front on the basis of a Remain ticket, involving the LibDems, Greens and SNP. This is the only way the Conservatives and most of the tabloid press will be defeated. Third, the new Conservative leader has to be forced to hold a general election before Article 50 is invoked. Difficult, but not impossible.

mainly macro: Just how bad will Brexit be, and can it be undone?