Crisis or speed bump? What UK vote means for world economy

Britain's vote to leave the European Union adds a heavy dose of uncertainty to a world economy that is still struggling to reach full speed years after the global financial crisis.

The full extent of the damage caused by Brexit will be clear when both US and UK markets open. Source: 1 NEWS

The most immediate pain will be felt in Britain. But economists say the ripples could be felt much farther afield.

Companies will wonder whether to invest or locate in Britain during the years-long negotiations to define new trade conditions with the EU, its biggest business partner.

Across Europe, trade and immigration may lose ground to nationalism and protectionism.

The EU itself, minus market-oriented Britain, may turn to more government intervention and regulation. Other countries may eventually seek to leave the bloc.

Here's a look at what the vote means for the world economy:

Economic growth

The most direct economic pain will be felt by the UK, while the direct consequences for the world economy are likely to be more moderate.

Moody's Analytics estimates that global economic output would be 0.25 percent smaller after five years than it otherwise would have been, while the EU would be a full percent smaller and the UK 4 percent.

Then there are indirect effects. Stock market plunges can make people feel poorer and less likely to spend. Uncertainty can make executives put off investments in new production.

Central Banks

The market plunges following the vote are one reason for the world's central banks to keep their rock-bottom interest rates in place.

"Brexit could be a game changer for central bank thinking," Megan Greene, chief economist at Manulife Asset Management, wrote in a research note.

The Federal Reserve is less likely to raise short-term interest rates this year - and might even have to cut them.

Greene predicted that the Bank of England could have to print money to finance government spending, tax cuts or both and that the Bank of Japan could follow.

The London Lily Pad

Many big companies use the UK as a base for their European operations.

London's strength as a banking center is in part based on easy access to financial markets in Europe.

Regulatory approval to do business in the British capital means an all-access pass to the other 27 EU countries, a process called passporting.

Global banks like JP Morgan Chase have already said that they would have to move jobs from London to the European mainland if Britain leaves the EU.

Consumers, travellers

The pound and euro both dropped, which should make British and eurozone exports cheaper overseas.

American travelers heading to Britain and the rest of Europe are going to find cheaper meals, hotels, souvenirs and museum admissions because the U.S. dollar will go farther against a weaker pound and euro.

Airfare for peak summer months probably won't dip but any taxes and fees levied in Europe will be cheaper.

For instance, all coach passengers leaving the UK for the US pay 73 pounds for the Air Passenger Duty. That tax is now cheaper.

Trade

The impact on UK-EU trade would depend on how quick and amicable negotiations are on a new set of relations.

Britain could wind up like Switzerland, which simply adopts EU requirements without having any say in how they are decided.

Britain sends 44 percent of its exports to the EU, less than any other member country but still quite significant.

The price for continued market access, however, could be allowing free movement of workers.

A desire to control immigration was a major force behind the "leave" campaign, so it's unclear if such an agreement could ever be reached.

Markets

Stock markets plunged yesterday, with Germany's DAX falling almost 7 percent, the Dow 2.6 percent and Britain's FTSE 3.2 percent. The pound hit a 31-year low.

Outside of the UK, however, that turmoil may not last. Analysts at Oxford Economics think the global market reaction and fears of an EU breakup are exaggerated.

Political dominoes

The British vote have a much broader impact if becomes a political turning point away from trade and economic integration.

In economic terms, free trade is considered a plus for growth. It should mean bigger markets, lower consumer prices and more competition.

Yet those advantages can quickly be forgotten if people feel that the benefits are not fairly distributed, or that their jobs are left unprotected and move to other, lower-cost countries.

Many think a British exit could embolden anti-EU, anti-immigration political movements such as the Front National in France.

Its leader, Marine Le Pen, is already considered likely to make the final round of presidential elections next year.

Geert Wilders, head of the anti-Islam, anti-EU Freedom Party in the Netherlands, called Friday for a referendum on the EU there, too.

And it goes beyond Europe.

Donald Trump, the likely Republican nominee for U.S. president, has described the free trade agreement among Canada, the US and Mexico as "a disaster."



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Nudes v prudes: Cheeky homeowners' bare-all yard work flusters self-proclaimed small-town, USA

Flustered residents of a Florida neighbourhood are learning the hard way about the limitations of nudity laws there.

Several residents of Stuart, which touts itself as one of the best small towns in the United States, have complained and called police about a neighbour who has found that yard work and chores are less tedious when in the nude.

The problem: Said work is often in the man's front yard, in full view of neighbours and motorists, local media outlets have reported.

"I came out Sunday night to put the trash out, and I look over and he is bent over, winding up his hose, and I'm like that is my view of the neighbourhood," Melissa Ny said with a laugh this week as she talked with TV station WPBF 25.

Another resident had a more angry tone as he pointed out the home sits next to a school bus stop.

But there's not much neighbours can do about it aside from complaining to the media.

Florida law allows people to be nude on their own property as long as they aren't engaging in "vulgar, indecent, lewd, or lascivious" behaviour, and police reckon trimming hedges and washing a car is not considered any of those, the Orlando Sentinel newspaper reports.

“I look over and he’s bent over winding up his hose, and that’s my view of my neighbourhood,” Melissa Ny said with a laugh. Source: WPBF

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Drum lines set out as hunt begins for shark that attacked Kiwi girl in Queensland

Drum lines will be set after two tourists were critically injured in separate attacks at a harbour in the Whitsunday Islands in north Queensland.

A 12-year-old New Zealand girl holidaying with her father and sister received a life-threatening wound to her leg on Thursday afternoon at Cid Harbour.

The attack came less than 24 hours after Tasmanian woman Justine Barwick, 46, was also bitten on her left thigh while snorkelling in the same harbour.

The child was in a critical condition at Mackay Base Hospital but it's understood she will be transported to Brisbane for further treatment.

Ms Barwick was taken to Brisbane on Thursday and her condition has since been upgraded to stable in intensive care at the Royal Brisbane and Women's Hospital.

Fisheries Queensland will set three baited drum lines in the harbour on Friday in a bid to catch the shark or sharks responsible.

"It is possible that there's more than one shark involved in these unfortunate events," the department's shark control program manager Jeff Krause told the ABC.

"We don't normally go out and search for any sharks that may have been involved in a shark attack but due to the nature of these multiple attacks, Fisheries Queensland is going to deploy three drum lines in a bid to try and catch some of the sharks in that area."

Mr Krause said various types of whaler species as well as bull and tiger sharks can be found in waters around the harbour and he advised against swimming in or near Cid Harbour for the time being.

The last attack in the area was eight years ago.

Shark attack expert Daryl McPhee, from Bond University, said while the likelihood of being attacked by a shark is slim, the Great Barrier Reef has a higher population of sharks than other areas.

"That increases the chances of something happening," Associate Professor McPhee said.

"Sharks will bite things that they think are prey and sometimes they consider people prey."

Emergency services say the young girl lost a lot of blood in the Whitsunday Islands attack. Source: Breakfast

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US man charged with putting daughter in game machine to steal prizes

A Massachusetts teacher has been charged with putting his toddler daughter into a game machine at a New Hampshire shopping mall and using her to steal prizes.

Police in Salem say 34-year-old Anthony Helinski, of Lawrence, Massachusetts, turned himself in Wednesday, five days after witnesses at the Mall at Rockingham Park recorded video of a man encouraging the girl to hand out prizes from within the KeyMaster game.

The video then shows the toddler climbing out of the machine.

Andover Public Schools told WCVB-TV that Helinski has been placed on leave from his job as a middle school teacher.

Helinski is charged with theft, trespassing and child endangerment.

A Massachusetts teacher has been charged with putting the toddler into a game machine at a shopping mall and using her to steal prizes. Source: Associated Press


New law in California limits plastic straws in restaurants

People who want straws with their drinks at California restaurants will have to ask for them under a new state law.

The law signed today by Governor Jerry Brown makes California the first US state to bar full-service restaurants from automatically giving out single-use plastic straws. It takes effect next year.300

The law doesn't ban plastic straws outright like some cities have.

Restaurants that don't comply will get two warnings before being fined up to NZ $450 per year. It will apply only to full-service restaurants, not fast food establishments.

Democratic lawmakers who support the law call it a small step toward reducing ocean pollution.

Plastic is bad, including straws, but the trouble is other options don’t always do the trick. Source: Seven Sharp

The law comes as cities and businesses around the world experiment with ditching the plastic products.

In April, 26 bars, restaurants, cafes and food trucks along Wellington's waterfront pledged to go plastic straw free.

"Our primary position is no straw if we can get away with it, but if somebody request one we will put one in the glass," Munchen Bar owner John Henderson told 1 NEWS at the time.

Businesses in Rangiora in North Canterbury have made similar moves, and politicians in the United Kingdom have announced straws will be banned there as early as next year.

Critics argue California's new law is government overreach that won't significantly improve the environment. Some say restricting straws hurts disabled people who rely on them.

Allison Franklin from Christchurch is passionate about the environment, but she also wants to use a plastic straw. Source: 1 NEWS

But straws are an eyesore that litter beaches around the world, and banning them is a step in the right direction, advocates in New Zealand agree.

"If you walk along beaches, especially Oriental Bay and Evans Bay (in Wellington), you'll see plastic straws strewn around the beaches," Oliver Vetter of Sustainable Oceans told 1 NEWS after the voluntary business ban in Wellington.

"We pick up about ten thousand straws a year just as part of our Love Your Coast program in Wellington."

Twenty-six bars, cafes, restaurants and food trucks on the waterfront are trialling a plastic straw-free future. Source: 1 NEWS