Welcome to TheCreditCruncher.com

The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

25 Nov 2016

The EU is not for turning

Incoming president of the EU Joseph Muscat (Malta) has declared that the EU will not be prepared to allow the UK to be part of the single market when it leaves. 

This will put more pressure on the supporters of Brexit who are implying that single market access is achievable after leaving the EU.
Muscat takes the position that there are a great deal of details to be negotiated, not least of which will be the 'bill' the UK will have to pay - this is something that I was not previously aware of, but looking into it has been a bit of an 'eye-opener'.
There are talks of a £350m-a-week 'divorce' settlement to cover UK obligations, which is exactly the amount that the BREXIT campaign said could be channeled from the EU into the NHS. On the other hand, it is just for the 12 months after we cut ties, but I don't recall ANYONE mentioning this is any debate?
The more we learn about the cost of leaving the EU, the more I wonder whether our government (all sides) has seriously mis-informed us regarding BREXIT, and then I am left wondering why they would do that??
I am never one to be impressed by conspiracy theories, but I am starting to seriously doubt the real drivers behind the so-called 'Remain' campaign.

So how will this affect us?

Well, we are still so much in the dark, and there are so many unknowns that we can't be definite. One thing I am becoming more certain of is that the negotiations are almost bound to fail, and we will find ourselves outside the EU on EU terms, and not our own terms. That is certainly the message we are hearing from the incoming president. Muscat will be president from January for 6 months, so will be in charge when Theresa May plans to trigger article 50 in March

10 Nov 2016

and to cap it all.....Trump wins..

As if there was not enough turmoil in the world...He's only gone and done it, the Don has taken the Whitehouse, the most powerful seat (arguably) in the world.


As might be expected, there has been mixed reactions to this, but the fact stands that he has played a clever game, and won. I am one of those who believes that we may see a different Trump now that the electioneering is over - a more statesman like figure.

But of course, if I am writing about this here, the question has to be 'How will this impact on the UK economy?'. First off, in response to Theresa May, President-elect Trump has already spoken about the 'special relationship' and of course a UK out of Europe could be the type of economy that Trump will favour when he begins to look outwards. He has firmly stated that initially the US will be looking to trade internally, and cut all agreements with other nations. Of course it remains to be seen how much of what he has said can actually be achieved.

There are real parallels with the BREXIT vote, the feeling of rebellion, the populace disengaging from the establishment.Time will tell where all this will lead us. If anyone had told us four or five years ago that all these things would come to pass, we would have not believed it.

6 Nov 2016

Back-lash against Judges

It is fairly typical of the tabloid press in the UK, to deliberately misunderstand news and attempt to mislead the public citing 'fury' where none is justified. 

A campaign devoid of logical argument has been launched by the Daily Mail attacking the High Court judges who ruled that Theresa May must consult Parliament before triggering article 50.
The Mail has gone into great detail about the personal backgrounds of the three judges as if their background and experiences have any bearing over a judicial decision. Their article goes as far as to highlight that one of the judges is 'openly gay' as if this were pertinent to the story.

What the Daily Mail must know but fails to mention, is that the courts can only uphold and apply the law as passed down by Parliament itself. Our legislation is formed in parliament by the elected representatives that form our democratic system. However 'democratic' a referendum appears to be, this does not and cannot outweigh the democracy of the Houses of Parliament. The Daily Mail surely knows this, but because it suits their cause to appear 'outraged' at the decision of the courts, it seems to conveniently forget.

Furthermore, the failure of the PM to win the right to single-handedly negotiate BREXIT is no bad thing whether you support the motion or not. The fact remains that Theresa May has not supported BREXIT otherwise there may be an argument to be made. It is not the case that someone who wants to exit the EU is being restricted - this is someone who wanted to REMAIN. In fact. this is the dilemma in a nutshell, there is so little support in Parliament for BREXIT, that democracy itself is called into question and is found wanting.

A democratic system must openly, transparently argue and vote on all considered facts. Our referendum campaigns showed poor judgement of both sides when it came to discussing the relative merits of 'remain' or 'leave'. Outrageous claims, one might say 'lies' were told (by both sides) and allowed to be left on the record as if they had merit. It remains to be seen whether the High Court judgement will be upheld, but the chance to have a proper debate should surely be welcomed.

3 Nov 2016

Court Ruling on BREXIT

Today, the High Court has ruled that the UK will not be able to trigger article 50 [needed to exit the EU] without debating it in Parliament.

It was Theresa May who has suggested she could trigger article 50 without the agreement of Parliament that has bought this legal challenge about. It is no real surprise that the court has ruled in this way, but this is a significant development on the road to leaving the EU.

Having to debate in Parliament, [with scant BREXIT support] could mean that a 'hard exit' is out of the question, as it is difficult to see the UK Parliament supporting anything less than the softest of exits. In fact it may well mean that the UK exit is almost indefinitely postponed such is the distance between what Parliament wants and what the referendum has asked for. It is hard to envisage the type of agreement that could appease enough MP's to get an agreement.

The next issue will be that once article 50 is triggered, the PM has to take a conditional 'soft' exit idea to Brussels and get the EU to agree it. An educated guess says this will not happen, so presumably there will need to be further debates and discussions back in Parliament. The danger here is that ironically we may still end up with a 'hard' exit as a default position once article 50 is triggered and no agreement can be reached.

The Government (a bit bizarrely in my opinion) will appeal against todays ruling, so speculation is a little premature at this stage. However, having originally thought 'surely this means a soft exit is the only option', having thought it through, I believe this could actually end with time being called on article 50 and a hard exit being forced by the EU.