How likely is a UK recession after Brexit?

• In the wake of the UK Brexit vote, forecasters have rushed to downgrade their growth forecasts for the UK, with some now expecting a recession. Using the Oxford Economics' Global Economic Model, we examine how likely a recession is by looking at the shocks the UK economy faces and the policy responses. We conclude that while a sharp slowdown is likely – in line with our own new forecasts – a recession is unlikely.
• Many UK forecasters are now predicting a recession in 2017, even though ‘stand‐alone’ recessions in industrial countries are rare. Our forecast is less downbeat. The UK faces a series of negative shocks including to consumers and business confidence, but growth will be supported by the weaker sterling and likely policy responses.
• Using the Oxford Economics' Global Economic Model, we show that to shift our baseline forecast of growth of 1.1% next year to zero would require a very severe negative confidence shock. Our new baseline already assumes a shock equivalent to one‐third of that seen in the global financial crisis (GFC). All else being equal, the shock would have to be around two‐thirds of that in the GFC to cut GDP growth to zero in 2017.
• Our new baseline also does not incorporate all the possible policy levers the UK can employ. We currently assume the Bank Rate drops to zero, but if a ‘rescue package’ of £75 billion of QE and a fiscal stimulus equal to 1% of GDP was also added, then the shock to confidence needed to get zero GDP growth would have to be similar to that seen in the GFC. We do not consider this likely given the scale of financial stress and credit restriction that occurred globally at the time of the GFC.

     

Has Brexit affected employment in Japanese affiliates in the UK?

On 23 June 2016, a referendum was held in the United Kingdom (UK) to decide whether the country should leave or remain a member of the European Union (EU). The ‘Leave’ vote won by 52 per cent to 48 per cent of voters, leading to the EU–UK Withdrawal Agreement that came into force in 2020 and the Trade and Cooperation Agreement that came into force in 2021. Brexit is not exclusively a European matter; it affects third parties as well. In this article we examine the presence of Japanese affiliates in Europe during 2000–21 by analysing data obtained from the Toyo Keizai's Overseas Japanese Companies database. While the UK has been a major beneficiary of Japanese investments in Europe, its share of Japanese affiliates in Europe has decreased, especially during 2000–10. Brexit has had no negative impact on direct employment created by Japanese affiliates in the UK in the short term, but its impact in the long term could be exacerbated by any further policy divergence between the UK and the EU.     

Will a matchmaker invite her potential rival in?

This paper analyzes optimal strategies of an incumbent intermediary, who matches agents on the two sides of a market, in the presence of entry threat under alternative scenarios. It shows that, when entry is free, strategic entry accommodation is the optimal choice of the incumbent—not entry deterrence, unless the variation in agents' types is small. Entry accommodation remains optimal for the incumbent for a wide range of parametric configurations even when there is a fixed cost of entry. These results are in sharp contrast to the predictions of existing models of entry.     

Industry trade between Canada and Mexico: Will a weakening peso help Mexican manufacturing in the long run?

Mexico has longed served as one of Canada's major trade partner, but the plunging peso has had drastic effects across North America. This study investigates the bilateral trade relationship between Canada and Mexico for 27 individual industries, from 1973 to 2006. Cointegration analysis shows that overall sensitivity to the real exchange rate is weak, but that the trade balances of certain manufacturing industries do indeed improve after a currency depreciation. The “J-curve” effect is present for certain electrical and mechanical industries, suggesting that the recent decline of the peso may currently be having a negative impact on Mexican trade—but that it might eventually be beneficial, particularly for the Machinery and Transport Equipment sector.     

Recognising the lesbian and gay constituency in UK trade unions: moving forward in UNISON?

Recent research on trade union democracy has drawn attention to the heterogeneity of union membership and the social processes within unions which can lead to the inclusion or exclusion of specific constituencies within union structures. This article draws on a case study of lesbian and gay self organisation in UNISON to illustrate the value of developing democratic structures to reflect this constituency and improve trade union representation and participation.     

Do services hold the key to an improved UK trade performance?

The UK has established a central role in the global market for trade in services, ranking second to the US in terms of its share of global exports. Our modelling finds that the key factor behind the UK's success is that its exports are focused on the markets where demand has been growing quickest. This represents a notable contrast with research on UK goods exports, which has found that the geographical focus of goods exports has been the main reason for the UK's persistent underperformance. The global financial crisis caused significant damage to the UK's export performance, particularly to the key financial sector which accounts for a quarter of UK services exports and almost two‐fifths of the UK's surplus on services trade. However, the UK's export performance is on the mend and we expect it to retain its position as a key global player in the market for services over the coming five years.     

Countervailing power? Collusion in markets with decentralized trade

We consider the collective incentives of buyers and sellers to form cartels in markets with decentralized trade and pairwise bargaining. Cartels are coalitions of buyers or sellers that limit market participation and compensate inactive members for their abstention. In stable market outcomes, cartels set Nash equilibrium quantities and cartel memberships are immune to deviations. The set of stable market outcomes is non-empty and its full characterization is provided. Stable market outcomes are of two types: (i) at least one cartel restrains trade and market participation is balanced; (ii) only one cartel is active and it reduces trade slightly below the opponent’s.     

Barriers to brand building in UK universities?

• Branding in universities has become an increasingly topical issue with practitioners, with some institutions committing substantial financial resources to branding activities. It has, however, received only limited academic investigation, and as the particular characteristics of the sector present challenges for those seeking to build brands, it seems to be timely and appropriate to investigate potential barriers to branding.
• This exploratory study investigates the opinions of the ‘brand guardians’ of UK universities—Vice Chancellors, Principals and Rectors—on the barriers to successfully building brands and draws conclusions on their views of the key challenges facing successful branding activity in the sector. Implications for practitioners are also explored.

Copyright © 2006 John Wiley & Sons, Ltd.     

Do UK charities have a lot to learn?

This article discusses the key findings of some recent research carried out into the application of market segmentation in the UK charity sector. 410 of the top performing charities (as ranked by income from voluntary donations) were surveyed to profile their major donor groups. Respondents were also asked to indicate how this data was used for fund-raising purposes both in terms of new donor recruitment and existing donor development. The findings show that with the exception of a very few large organizations, the UK charity sector still has much room for improving the sophistication of its fund-raising techniques.     

No passage to India? Initial responses of UK trade unions to call centre offshoring

This article focuses on the first wave of call centre offshoring from the UK to India (2002–04). Trade union responses in five case‐study companies are documented. Drawing upon theories of union power resources, including international action, the relative efficacy of these union responses is analysed.     

Regionalism in the nineties: what effect on trade?

We apply a gravity model to 1980–1996 annual nonfuel imports data for 58 countries to quantify the effects of recently created or revamped PTAs on trade. We modify the gravity equation to identify separate effects of PTAs on intrabloc trade, members’ total imports and their total exports and to test for significant changes in trade patterns following the creation of trade blocs. We find no indication that ‘new regionalism’ boosted intrabloc trade significantly and we find trade diversion only for the EU and EFTA. The latter also exhibit ‘export diversion’, which could indicate their imposing welfare costs on other countries. Latin American trade liberalization in the 1990s had a positive impact on bloc members’ imports and, usually, exports.     

‘The times they are a changin’? transformative organizational innovations in financial services in the UK

Much of the management guru-based literature emphasizes the transformational capacity of organizational innovations (OIs). The excellence, quality and reengineering literature purports to abandon hierarchy, bureaucracy and management control; to eradicate conflict and instil an new team and quality-based ethos. Yet much remains unknown about how these OIs are operationalized. Here we question both theoretically and empirically the validity of such transformational claims by reference to our research within financial services. We argue that despite considerable changes, OIs remain both a condition of, and location for, the exercise of organizational power relations. Bureaucratic and hierarchical structures continue to pervade organizations. Work-related pressures and tensions abound concerning issues such as control over the quality versus the quantity of work output, work intensification and job insecurity. All of which impinge upon the performance of OIs, and belie notions of a ‘transformation’ of organizational cultures, structures or strategies.     

Irish trade unions under social partnership: a Faustian bargain?

Since 1987 trade unions have been a key party to social partnership agreements in Ireland. Theoretical and empirical studies of corporatism point to positive outcomes for trade unions such as an increase in union density, ease of recognition, and increased employer support. However, apart from a modest increase in union membership numbers, none of these outcomes were realised. Union density levels have decreased significantly, union recognition is more problematic than ever, and employer opposition appears to have increased in scope and intensity. Decline in union density questions the capacity of unions to remain pivotal actors in the future. During the period of partnership union density in the private sector more than halved. It remains the paradox of partnership.