Brexit odds

S8484

Novice Member
I'm slightly confused as to why no deal Brexit odds are so good. A deal seems very unlikely and Boris Johnson has repeatedly said and seems adamant that we will leave on 31st October. He'll look very stupid if we don't the way he's been going on. He has repeatedly stated that he'll find a way to leave however that is. Even if he sends an extension letter followed by a secondary letter asking to cancel the 1st extension letter (which is now being reported). He's adamant! Therefore, why are the bookies offering to more than triple your return by betting for a no deal Brexit? Is Boris simply talking rubbish and not caring a less about making himself look completely stupid because to me that's not how it seems. By the way, I don't actually want a no deal scenario I'm just interested in the odds being offered. Thanks.
 

Cliff

Distinguished Member
I'm slightly confused as to why no deal Brexit odds are so good. A deal seems very unlikely and Boris Johnson has repeatedly said and seems adamant that we will leave on 31st October. He'll look very stupid if we don't the way he's been going on. He has repeatedly stated that he'll find a way to leave however that is. Even if he sends an extension letter followed by a secondary letter asking to cancel the 1st extension letter (which is now being reported). He's adamant! Therefore, why are the bookies offering to more than triple your return by betting for a no deal Brexit? Is Boris simply talking rubbish and not caring a less about making himself look completely stupid because to me that's not how it seems. By the way, I don't actually want a no deal scenario I'm just interested in the odds being offered. Thanks.
Well, a no deal Brexit is not the first choice of the UK. But more so with the EU . They will/are going to great lengths to make sure it doesn’t happen.
They will be seriously affected. At the moment we have a huge trade imbalance with the EU. Imagine if we were to buy elsewhere?
So the chances are, it will be a deal or remain (hopefully not).
 

Greg Hook

Moderator & Reviewer
If the bookies are giving high odds on a no deal bet, then chances are their are confident a no deal won't happen.

One bookie site has some amusing bet options on their politics section.

For example 14/1 on Avocados being officially the first item to be rationed by the UK Government. 2/1 on fuel.

You can even bet on who will leave their job first, Bojo or the Man U manager. :D
 

richp007

Distinguished Member
Seeing long odds on No Deal are likely to be relevant relating only to 31st October deadline.

I'd expect shorter odds on it still happening at any unspecified point.

Never a bad place to gauge some true Brexit information though. The bookies are likely to have better sources than the media!
 

S8484

Novice Member
Ok thanks. I just find it interesting that even if you were to hedge your bets between leaving with a deal on or before October 31st and leaving without a deal on or before October 31st, you could still make a nice profit. Even this morning Andrea Leadsom was saying that we'll definitely be leaving before November with or without a deal. This isn't what the odds suggest however! Confusing!
 

Greg Hook

Moderator & Reviewer
Ok thanks. I just find it interesting that even if you were to hedge your bets between leaving with a deal on or before October 31st and leaving without a deal on or before October 31st, you could still make a nice profit. Even this morning Andrea Leadsom was saying that we'll definitely be leaving before November with or without a deal. This isn't what the odds suggest however! Confusing!
What site is offering those odds on leaving or not leaving?
I can't see any bookie offering a simple yes/no bet where you can make money simply by betting on both?
 

S8484

Novice Member
What site is offering those odds on leaving or not leaving?
I can't see any bookie offering a simple yes/no bet where you can make money simply by betting on both?
You can hedge your bets and still make a profit on Paddy Power. Only of there's no extension though!
 

GadgetObsessed

Well-known Member
Well, a no deal Brexit is not the first choice of the UK. But more so with the EU . They will/are going to great lengths to make sure it doesn’t happen.
They will be seriously affected. At the moment we have a huge trade imbalance with the EU. Imagine if we were to buy elsewhere?
So the chances are, it will be a deal or remain (hopefully not).
I don't really see that the EU are more dependent upon UK/EU trade than we are.

Even though we import more from the EU than we export to the EU, proportionately any impact to EU UK trade would hit the UK far worse than the EU.

The EU's exports to the UK are valued at £341bn which is around 2.8% of the EUs GDP.
The UK's exports to the EU are valued at £274bn which is around 12.7% of the UKs GDP.

The UK's trade deficit with the EU is £67bn - which is around 0.5% of the EUs GDP.

The EU accounts for around 44% of the UKs exports.
The UK accounts for around 8% of the exports of EU countries.

So overall the UK is around 5 times more dependent upon trade with the EU than the EU is.

These figures primarily reflect how much smaller the UK economy is in comparison with the rest of the EU. The UK GDP is around $2.8 trillion while that of the EU, excluding the UK, is around $16tn. EU economy is around 6 times larger than that of the UK.

The UK is significant for some German companies. For example, the UK is BMWs 4th largest market (after China, US and Germany) and accounts for almost 10% of BMWs market.
 

Greg Hook

Moderator & Reviewer
You can hedge your bets and still make a profit on Paddy Power. Only of there's no extension though!
Ah I see! So not a sure bet.
 

Cliff

Distinguished Member
I don't really see that the EU are more dependent upon UK/EU trade than we are.

Even though we import more from the EU than we export to the EU, proportionately any impact to EU UK trade would hit the UK far worse than the EU.

The EU's exports to the UK are valued at £341bn which is around 2.8% of the EUs GDP.
The UK's exports to the EU are valued at £274bn which is around 12.7% of the UKs GDP.

The UK's trade deficit with the EU is £67bn - which is around 0.5% of the EUs GDP.

The EU accounts for around 44% of the UKs exports.
The UK accounts for around 8% of the exports of EU countries.

So overall the UK is around 5 times more dependent upon trade with the EU than the EU is.

These figures primarily reflect how much smaller the UK economy is in comparison with the rest of the EU. The UK GDP is around $2.8 trillion while that of the EU, excluding the UK, is around $16tn. EU economy is around 6 times larger than that of the UK.

The UK is significant for some German companies. For example, the UK is BMWs 4th largest market (after China, US and Germany) and accounts for almost 10% of BMWs market.
I would use the word 'dependent'. But with our markets changing to other countries and our EU monetary contribution gone, the EU will certainly do everything to make sure there is a deal. Their usual ploy is rerun of the referendum.
Interestingly they have befriended John Bercow...
(washing machine MP No2)
 

GadgetObsessed

Well-known Member
I would use the word 'dependent'.
Sorry I am not sure what you mean by that.
Do you mean to say that you think that the EU is dependent upon UK trade because of the trade defecit?
 

Pacifico

Distinguished Member
Interestingly they have befriended John Bercow...

Yes - conspiring with a foreign power to block the decision of the UK electorate. How does it go? - 'Lock him up' :D

As regards the odds on brexit, I would say slim to non-existant. After all they do say that if voting chnaged anything they wouldnt let you do it.
 

EarthRod

Distinguished Member
These figures primarily reflect how much smaller the UK economy is in comparison with the rest of the EU. The UK GDP is around $2.8 trillion while that of the EU, excluding the UK, is around $16tn. EU economy is around 6 times larger than that of the UK.
Bearing in mind of course you are comparing a country with a bureaucratic organisation.

If you compared a country against another country, for example UK against Italy or France, then the figures would reflect country economies in a better light.
 

GadgetObsessed

Well-known Member
Bearing in mind of course you are comparing a country with a bureaucratic organisation.

If you compared a country against another country, for example UK against Italy or France, then the figures would reflect country economies in a better light.
These figures compare the GDP of one country, the UK, with a group of countries, the remaining EU countries - not an organisation. The relevance in this case is simply that you have two parties negotiating a trade deal. One party is economically smaller and more dependent upon trade with the other, than the other party is.

There is no reason that the GDP of a country cannot be compared to that of a particular group of countries - and this is frequently done in economics. (My first degree was in Economics.) The GDPs of countries is often compared with trading blocks such as the EU, NAFTA, ASEAN, etc. This often comes up as trading blocs often negotiate trade deals with individual countries. For example, the EU has negotiated free trade deals with countries such as South Korea and Japan. (The UK will no longer be part of such free trade deals once we leave the EU.)
 

EarthRod

Distinguished Member
These figures compare the GDP of one country, the UK, with a group of countries, the remaining EU countries - not an organisation. The relevance in this case is simply that you have two parties negotiating a trade deal. One party is economically smaller and more dependent upon trade with the other, than the other party is.

There is no reason that the GDP of a country cannot be compared to that of a particular group of countries - and this is frequently done in economics. (My first degree was in Economics.) The GDPs of countries is often compared with trading blocks such as the EU, NAFTA, ASEAN, etc. This often comes up as trading blocs often negotiate trade deals with individual countries. For example, the EU has negotiated free trade deals with countries such as South Korea and Japan. (The UK will no longer be part of such free trade deals once we leave the EU.)
You are comparing import/export figures of the EU (a bureaucratic organisation) with the UK (a country) as follows:

"The EU's exports to the UK are valued at £341bn which is around 2.8% of the EUs GDP.
The UK's exports to the EU are valued at £274bn which is around 12.7% of the UKs GDP.
The UK's trade deficit with the EU is £67bn - which is around 0.5% of the EUs GDP."


You made no mention of countries, except for the UK. Therefore you are comparing a bureaucratic organisation with a country.

I quite understand a comparison can (and is frequently done) be made between a trading block and a country. However, your comparison gives the impression of highlighting a weakness (your percentage figures in bold) in the comparison, the UK figures being very much smaller than the EU figures.

In addition, the fact you have a degree in Economics (and noted the reference to your first degree) does not bear any weight to my point. In other words, I am not cowed by your disclosure.

It seems to me all you have done is shown 27 countries in total have better import/export figures than one country.

Fair enough.
 

weaviemx5

Distinguished Member
You are comparing import/export figures of the EU (a bureaucratic organisation) with the UK (a country) as follows:

"The EU's exports to the UK are valued at £341bn which is around 2.8% of the EUs GDP.
The UK's exports to the EU are valued at £274bn which is around 12.7% of the UKs GDP.
The UK's trade deficit with the EU is £67bn - which is around 0.5% of the EUs GDP."


You made no mention of countries, except for the UK. Therefore you are comparing a bureaucratic organisation with a country.

I quite understand a comparison can (and is frequently done) be made between a trading block and a country. However, your comparison gives the impression of highlighting a weakness (your percentage figures in bold) in the comparison, the UK figures being very much smaller than the EU figures.

In addition, the fact you have a degree in Economics (and noted the reference to your first degree) does not bear any weight to my point. In other words, I am not cowed by your disclosure.

It seems to me all you have done is shown 27 countries in total have better import/export figures than one country.

Fair enough.
The EU negotiates as the EU, it’s a trading block. We can’t negotiate a trade with Italy direct (for example) as they’re a member of that trading block.

If you want to compare us to a single country, why not look at large economies like USA, China, India etc. The fact the UK Government has fanfared the currently comparatively tiny trade deals that have been pre-agreed with countries like Eritrea shows that their negotiations have so far only dealt with smaller economies, with a comparatively tiny financial benefit.
 

GadgetObsessed

Well-known Member
You are comparing import/export figures of the EU (a bureaucratic organisation) with the UK (a country) as follows:

"The EU's exports to the UK are valued at £341bn which is around 2.8% of the EUs GDP.
The UK's exports to the EU are valued at £274bn which is around 12.7% of the UKs GDP.
The UK's trade deficit with the EU is £67bn - which is around 0.5% of the EUs GDP."


You made no mention of countries, except for the UK. Therefore you are comparing a bureaucratic organisation with a country.

I quite understand a comparison can (and is frequently done) be made between a trading block and a country. However, your comparison gives the impression of highlighting a weakness (your percentage figures in bold) in the comparison, the UK figures being very much smaller than the EU figures.

In addition, the fact you have a degree in Economics (and noted the reference to your first degree) does not bear any weight to my point. In other words, I am not cowed by your disclosure.

It seems to me all you have done is shown 27 countries in total have better import/export figures than one country.

Fair enough.
No need to be so touchy. I wasn't trying to brow beat anyone by mentioning that I had a degree. I mentioned it as I had personally looked at comparisons involving trade blocs and countries before. It had not even occurred to me that anyone could consider that mentioning a degree could be construed as trying to cow someone. (Maybe though, because I work in an industry where you assume everyone else has at least one degree as a matter of course, I consider having a degree as more normal/usual than most other people do.)

OK as you are so focused on wording, lets change the term "EU" to "the 27 countries that we are negotiating with".

Yes, I do believe that if you focus on trade, then we are in a weaker position for negotiating an agreement. We are negotiating with 27 countries and together those countries have a much larger economy. Those countries are also proportionately far less dependent upon trade with us than we are on trade with them. If, for arguments sake, trade between the UK and the EU 27 countries was reduced by X% after Brexit then the unemployment rate in the UK would rise far more significantly than the unemployment rate in the EU 27 countries.

From a purely trade perspective, those 27 countries simply do not need us as much as we need them.

Now, if you invoke other arguments on the relative strength of the two parties in the negotiation you would be on more solid ground.

For example, the UK is the second largest net contributor to the EU budget with a net contribution of around £10bn in 2018 and an average of about £8bn over the last 5 years. However, the existing financial settlement has the UK paying around £5bn a year for a number of years - so there isn't much of a saving/loss on either side for a number of years. The EU can certainly kick the problem of needing to cut spending down the road for a number of years. (Especially as for the next few years the UK will continue contributing but will cease being able to claim funding.)
 

Stuey1

Well-known Member
No need to be so touchy. I wasn't trying to brow beat anyone by mentioning that I had a degree. I mentioned it as I had personally looked at comparisons involving trade blocs and countries before. It had not even occurred to me that anyone could consider that mentioning a degree could be construed as trying to cow someone. (Maybe though, because I work in an industry where you assume everyone else has at least one degree as a matter of course, I consider having a degree as more normal/usual than most other people do.)

OK as you are so focused on wording, lets change the term "EU" to "the 27 countries that we are negotiating with".

Yes, I do believe that if you focus on trade, then we are in a weaker position for negotiating an agreement. We are negotiating with 27 countries and together those countries have a much larger economy. Those countries are also proportionately far less dependent upon trade with us than we are on trade with them. If, for arguments sake, trade between the UK and the EU 27 countries was reduced by X% after Brexit then the unemployment rate in the UK would rise far more significantly than the unemployment rate in the EU 27 countries.

From a purely trade perspective, those 27 countries simply do not need us as much as we need them.

Now, if you invoke other arguments on the relative strength of the two parties in the negotiation you would be on more solid ground.

For example, the UK is the second largest net contributor to the EU budget with a net contribution of around £10bn in 2018 and an average of about £8bn over the last 5 years. However, the existing financial settlement has the UK paying around £5bn a year for a number of years - so there isn't much of a saving/loss on either side for a number of years. The EU can certainly kick the problem of needing to cut spending down the road for a number of years. (Especially as for the next few years the UK will continue contributing but will cease being able to claim funding.)
The big issue with this is it almost assumes that all 27 countries have an equal distribution of imports and exports from/to the UK, when in reality it is likely to hit the big hitters (Germany, France, Spain) much more than it is going to hit Romania for example.

It's sort of using statistics to mislead IMO - yes 27 countries together have a much bigger economy that one country - but if 20 of those countries do very little trade with the UK then the GDP of those countries is just bulking up the numbers to suit an argument
 

Sonic67

Distinguished Member
Germany is close to recession. France has had over 40 rioting weekends. Spain, Italy, Greece etc are in a mess. Eastern Europe relies on handouts.

And that's all right now.

I don't see how the EU losing out on billions, or the UK trading more elsewhere will help the EU with any of that.
 

GadgetObsessed

Well-known Member
The big issue with this is it almost assumes that all 27 countries have an equal distribution of imports and exports from/to the UK, when in reality it is likely to hit the big hitters (Germany, France, Spain) much more than it is going to hit Romania for example.

It's sort of using statistics to mislead IMO - yes 27 countries together have a much bigger economy that one country - but if 20 of those countries do very little trade with the UK then the GDP of those countries is just bulking up the numbers to suit an argument
Ok - lets take the two largest economies in the EU once/if the UK leaves - France and Germany.

In GBP/Sterling terms the sizes of the relevant economies are:
Germany - £3 trillion
France - £2.1 trillion
UK - £2.1 trillion.

The UKs imports and exports to those countries are:

Germany - Exports to UK - £78bn. Imports from UK £57bn
France - Exports to UK - £41bn. Imports from UK £40.5bn

So, on to relative dependence on bilateral trade:
Germany
2.6%
of German GDP is dependent upon exporting to the UK
2.7% of UK GDP is dependent upon exporting to Germany

So the UK is very slightly more dependent upon trade with Germany than Germany is. In practice it is so close that lets say that we are both equally dependent upon this bilateral trade. Germany exports more to us than we do to them but it is in matched by how much larger the German economy is compared to that of the UK. You cannot say that Germany is more dependent upon UK trade than the UK is on German trade.

France
1.95% of French GDP is dependent upon exporting to the UK
1.9% of UK GDP is dependent upon exporting to France

Again, it is so close that lets say that we are both equally dependent upon this bilateral trade. In this case both economies are more or less the same size and export more or less the same amount to one another.

These balanced bilateral trading relationships would give us equal footing (in trade terms) if we were negotiating with France or Germany, individually.

However, we are negotiating with a party that represents both. If there were disruption to UK-Franco-German trade, then we would suffer the impact on both our exports to Germany and our exports to France, while each of those would only suffer the impact of the loss of trade to the UK. So in that sense we in the UK are roughly twice as dependent upon trade with Germany and France as either of those parties are on trade with us.

Once you take into account all of the other EU countries we are dealing with, then the overall disparity of dependence of trade dependence becomes far greater.
 

Stuey1

Well-known Member
Ok - lets take the two largest economies in the EU once/if the UK leaves - France and Germany.

In GBP/Sterling terms the sizes of the relevant economies are:
Germany - £3 trillion
France - £2.1 trillion
UK - £2.1 trillion.

The UKs imports and exports to those countries are:

Germany - Exports to UK - £78bn. Imports from UK £57bn
France - Exports to UK - £41bn. Imports from UK £40.5bn

So, on to relative dependence on bilateral trade:
Germany
2.6%
of German GDP is dependent upon exporting to the UK
2.7% of UK GDP is dependent upon exporting to Germany

So the UK is very slightly more dependent upon trade with Germany than Germany is. In practice it is so close that lets say that we are both equally dependent upon this bilateral trade. Germany exports more to us than we do to them but it is in matched by how much larger the German economy is compared to that of the UK. You cannot say that Germany is more dependent upon UK trade than the UK is on German trade.

France
1.95% of French GDP is dependent upon exporting to the UK
1.9% of UK GDP is dependent upon exporting to France

Again, it is so close that lets say that we are both equally dependent upon this bilateral trade. In this case both economies are more or less the same size and export more or less the same amount to one another.

These balanced bilateral trading relationships would give us equal footing (in trade terms) if we were negotiating with France or Germany, individually.

However, we are negotiating with a party that represents both. If there were disruption to UK-Franco-German trade, then we would suffer the impact on both our exports to Germany and our exports to France, while each of those would only suffer the impact of the loss of trade to the UK. So in that sense we in the UK are roughly twice as dependent upon trade with Germany and France as either of those parties are on trade with us.

Once you take into account all of the other EU countries we are dealing with, then the overall disparity of dependence of trade dependence becomes far greater.
Yes I understand that, however when using figures that make it look like we are dwarfed by the EU it makes us appear like we are dependent on all 27 of the countries, when in reality most of our trade is going to between a small group of those countries.

There is no doubting the UK "loses" more in a no-deal scenario because it loses from multiple not just one but that wasn't my argument, I understand where your argument is coming from and it will almost certainly help them to negotiate but the "pain" to each individual country is still going to be whatever it is if we end up with a no deal (and those countries we trade with the most are likely to be the larger members of the EU)....

I'm not arguing we are in "strong" position in terms of negotiations, I am arguing we are in a stronger position than is made out throwing out GDP and Import/Export figures for 1 country vs 27 - as ever its just an over simplification of what is actually happening because it favours a specific argument
 

Similar threads

Trending threads

Top Bottom