Question 2: Do you agree that the possibility of Brexit significantly increases uncertainty and volatility in financial markets and the economy in general?
If the perceived likelihood of Brexit were to rise, then uncertainty in the economy and in the financial markets must rise. Even the proponents of Brexit have no clear view of what would happen - indeed, of what they would like to see happen, in regard to our subsequent relationship with the EU - after a vote to leave. And views on the likely outcome of negotiations diverge widely. How much this would affect volatilities of asset prices is another question - I'd say some, but I wouldn't expect volatility spikes of the degree we saw in the financial crisis.
Question 1: The value of the pound fell sharply this week. Do you agree that the public debate on Brexit can be expected to (continue to) lead to a substantially higher level of exchange rate volatility in the upcoming months?
I agree, but I wouldn't focus on volatility - leave that for the finance people, much overemphasised. But if the perceived likelihood of Brexit rises, the sterling exchange rate is likely to fall further. The evidence that Brexit would be significantly negative for the British economy is clear, and those in the financial sector will be particularly sensitive to this. Perhaps most important for the exchange rate, however, would be capital outflow and expectations of a fall in FDI, as well as expectations of a deterioration of the current account.
Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).
Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
The main impact is on Chinese imports of raw materials and semifinished goods. That can't be a significant proportion of our exports to China. The effects on us of the negative impact on emerging market exporters to China must also be second-order. And our exports will benefit from the Chinese switch towards consumption - in particular, foreign travel and educating Chinese students abroad, provided we have a more sensible visa policy. That may require a change of Home Secretary. Chinese financial liberalisation and the development of their financial sector (part of the structural switch) will also probably be positive for the UK.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
National Living Wage and the UK economy
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Question 2: Do you agree that the new NLW will have a muted effect on wages and prices?
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Question 1: Do you agree that the new National Living Wage is likely to lead to significantly lower employment?
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Brexit and financial market volatility
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Question 2: Do you agree that the possibility of Brexit significantly increases uncertainty and volatility in financial markets and the economy in general?
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Question 1: The value of the pound fell sharply this week. Do you agree that the public debate on Brexit can be expected to (continue to) lead to a substantially higher level of exchange rate volatility in the upcoming months?
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China’s growth slowdown: likely persistence and effects
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Question 2:
Do you agree that if the Chinese slowdown turns out to be persistent, it will have a significant impact on UK growth (say, in the order of a few tenths of a percentage point) and/or it will justify a material change in monetary policy (for example, in terms of the timing and speed of a return to ‘normal’ interest rates) and fiscal policy (for example, in terms of the timing and speed of fiscal contraction).
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