Britain Out, Pound Down, Gawith Up?

[mothernaturewilleatusallforbreakfast]

So the British vote to leave the EU has the pound down and a lot of other markets worried. I don't want to get into politics, but did want to ask a question. Early reports suggest that inflation in Britain will almost be immediate. Does this mean that the price of English produced goods that are sold in the US are going to see a price increase soon?

 

[pitchfork]

Theoretically, prices will go down. But that's only if the pound stays down long enough for retailers to think about changing prices. Right now the pound is at the same level it was at back in February. Today was a bad day for it, but I wouldn't expect much further decline, really.
However, if you buy pipes from online British retailers, the current exchange rate is calculated automatically through your credit card, so prices are about as cheap as they were in February of this year. Ditto for pipes priced in Euro from Al Pascia and the like.

 

[jpmcwjr]

Not necessarily, certainly not across the board: Goods still have to be competitive when they're imported, regardless of the cost of manufacture. Some things, Rolls, and Esoterica, for examples, don't compete head on with other things.

 

[mothernaturewilleatusallforbreakfast]

Theoretically, prices will go down.

That's what I thought, but read somewhere today that there would be inflation. Nonetheless, it will be interesting to see what happens as a result of the vote? I just wanted to make sure I didn't need to pick up some FVF this weekend.

 

[pitchfork]

Prices in Britain won't change, but if you're using dollars to buy things priced in pounds, it simply costs fewer dollars per pound. But here's the thing, retailers bought their stock weeks or months ago, so they won't see cheaper prices until they buy new stock. Again, the pound isn't down that much and it's at the same level it was in February. Further, if you're buying retail from an American importer (e.g., Smokingpipes), you're not likely to see any price difference at all. American retailers, unless they decide to compete with each other on price, have no real incentive to lower prices until there's a significant and sustained drop in the pound versus the dollar. Until then, they'll pocket a few extra pennies on British tobaccos, but only on stock they purchase in the future, not stock they've already bought.
Shorter: don't worry about it. If anything, the price of FVF will go down a little bit rather than up.

 

[mso489]

A few currency traders will make a haul on this, but the rest of us shouldn't try. I don't think Britain will benefit in the longer run, but I'm guessing along with everyone else. Europe (the rest) definitely won't be helped in the short term. The whole union may unravel. Visas, tariffs, the whole muddle. I hope for the best. Decline in Europe won't help anywhere. No $100 Dunhills, I'm sure.

 

[beastinview]

We'll just have to wait and see. I've been following the whole EU referendum, and I believe most of the panic today is just scare-mongering. Obviously, any market can crash at any time, but everyone's panic over the pounds dropping is a bit silly--it's already recovered quite a bit.

 

[mothernaturewilleatusallforbreakfast]

Well I certainly was wrong with the inflation remark in the original post, but will our beloved Game of Thrones be able to finish filming?
Brexit's Affect on Game of Thrones?

 

[beastinview]

Actually, now that I think of it, Brexit could be great for Gawith, since the EU Commission has basically made it its goal to crush the tobacco industry.
I'll leave it to the experts in the legislation forum to sort out the specifics in the short run, but if you think in the big picture that a globalist economy was going to be friendly to the tobacco industry, you're naive.
That said, Britain may be so hard on tobacco anyway that it won't matter. I don't live there, so I'm not familiar with all the legislation.

 

[mothernaturewilleatusallforbreakfast]

Actually, now that I think of it, Brexit could be great for Gawith, since the EU Commission has basically made it its goal to crush the tobacco industry.

I know the smokeless tobacco community will be happy, especially if Sweden exits, which they probably will? The EU made Swedish snus basically illegal to sell or consume in the EU with exception to Sweden. The Brits should have access to a can of Ettan very soon.

 

[pitchfork]

The GBP was lower two weeks ago vs. the dollar than it is today. And it was even lower in February. No one knows the future, but the big freak-out on the tee vee isn't really about the actual numbers. Today was just a particularly bad day because nobody expected the vote to come out as it did and the pound had climbed quite a bit in the last couple of weeks leading up to the vote.

 

[papipeguy]

In the UK 1GBP=1GBP, so the domestic market will not see any immediate effect. The same with the euro. With the GBP closing down US$0.12 today and the euro down US$0.02 it's probably a good weekend to buy from the UK and Ireland and Germany. Mr. Snuff here I come.

 

[deathmetal]

I believe most of the panic today is just scare-mongering.

I concur. Opportunities abound now that EU rules will not likely apply in the near future!

 

[pappymac]

mothernature, you have to understand that the UK is still in the EU. The vote was just the approval of the citizenry indicating that they want to leave. It will take a while, maybe even two years for the UK to be officially out of the EU.

 

[warren]

The speed of the separation depends on when Cameron invokes "Article 50". Most EU members seem to want him to invoke it quickly. They are saying "Out is out."

 

[mothernaturewilleatusallforbreakfast]

Game of Thrones will not be affected by Brexit
http://www.ew.com/article/2016/06/24/brexit-game-thrones

 

[jpmcwjr]

While foreign exchange markets tend to move Pounds Sterling lower for a bit, the overall economic effect is likely to be negative, causing prices of British goods to move higher over time, more than offsetting the lower exchange rate.

 

[fnord]

If traveling from outside the UK it would make for a nice weekend in London. Some foreign travelers could gain an extra 10% to 15% on exchange rates.
Adjustments will be made soon. But Monday and Tuesday could be fortuitous for smart, quick acting investors.
Fnord

 

[retrogasm]

I know the smokeless tobacco community will be happy, especially if Sweden exits, which they probably will? The EU made Swedish snus basically illegal to sell or consume in the EU with exception to Sweden. The Brits should have access to a can of Ettan very soon.

We're not leaders when it comes to the EU in Sweden, we're followers. Unless Germany leaves we wont be going anywhere.
I agree that the present market and currency dump is reactionary, we'll have to see what it levels out to once the long term effects become known. In any case, what will effect the price isn't so much the currency as the resulting new trade agreements that the brits have to negotiate once they leave. In effect, it's up to your government as to how to tax british import goods.
There's a reason we don't get US blends at BM's in the EU and it's that with the import charges they become way to expensive to sell. Depending on the deal the english cuts with the EU their market over here is about to go tits up.
Personally I'm hoping for Scotland to secede to stay in the EU so that my single malt will keep coming.

 

[brian64]

I won't be surprised if when all is said and done the UK ends up staying in the EU. The globalists don't normally take no for an answer. All manner of negative propaganda regarding the UK leaving will continue, and they will likely end up concocting an excuse to have another vote.