
Microsoft hikes U.K. prices by 22% - sghi
http://money.cnn.com/2016/10/24/technology/microsoft-prices-brexit-uk/index.html
======
s_dev
There will be a lot of price hikes coming to the UK so they can expect some
high inflation. Pound is weaker so need more of them to achieve same revenue
in dollars.

I'm utterly fascinated by Brexit -- I'm here in Ireland and it's going to be
part disaster part boom depending on how we handle it so it has very real
consequences. I think the biggest damage will be that to young people in the
UK who will likely be denied the ability to travel as freely to live and work
across the EU and this sort of denial of opportunity won't manifest as obvious
for many years.

We put up the price of our software in the UK once we heard the referendum
result and May indicating hard Brexit. On both occasions Sterling dropped.

~~~
dx034
As I wrote in my other comment, inflation at current exchange rates is
forecasted to go to ~3% over the next year. That's much higher than currently,
but not dangerously high for the economy.

At the same time, the volatility of exchange rates are worrying businesses,
but the absolute value is probably rather positive for the economy. People
will buy more local and exports are cheaper. The economy seems to hold up well
and will probably continue to do so until Brexit actually happens.

To be clear, I'm absolutely no fan of Brexit, but I don't think that it will
have negative effects in the next 1-2 years. In the longer term this may look
very different.

~~~
doc_holliday
"inflation at current exchange rates is forecasted to go to ~3%"

I don't understand how they are calculating it to only be around 3%.

We are already noticing things to be running at around 10% in imports, and
sometimes more across various things.

We import a lot in the UK; energy, food, goods.

I personally think it will be way above 3% possibly reaching double figures.

~~~
dx034
As was said in another comment, not everything is imported and even for
imported goods, not all prices will go up by 10%.Many imports are in the
agriculture sector, and the current supermarket fight means that supermarkets
will try to hold back price hikes as long as possible.

Measuring inflation is tricky as it affects everyone differently. The RPI is
perhaps a better measure for consumers in the UK and could go a bit higher.
Perceived inflation will certainly be even higher, as most people focus on
prices for groceries and petrol to measure inflation, the most affected goods.

~~~
dogma1138
Local food prices are also dependant on the UK being in the EU since the EU
provides huge farm subsidies.

UK food prices are already fairly high even tho they are already being
subsidised to match cost, many items like milk are subsidised because the
supermarkets are paying below cost prices to the farmers.

That said the EU losing the UK as a trading partner won't go well either,
Germany will have to find another country to sell stuff too to cover the $50
bln. loss in trade deficit if the UK implodes.

------
baconizer
2000s: It's expensive doing business in the UK: price hike

2007: Business needs to be protected from Pound fluctuation: we accepted the
new norm that a $500 gadget cost £500

2016: Brexit hurt our company earnings : like I care, we are full stack OSS

~~~
imdsm
These were my thoughts exactly. Companies can jump on Brexit and hike prices,
that's fine, they will be selling less for more, which will bring them the
same revenues.

We use full stack OSS too, not a penny spent on licences.

Have fun with your 22% M$.

------
andygates
As a huge healthcare org with solid MS lock-in: ouch.

Brexy-fans can say it's "fluctuating not tanking"; we still have to pay more
for software (and less for hospital beds, staff, and so on. In big orgs these
costs are gibberring).

(personally I'm betting on EUR-GBP parity by xmas, because my Cassandra gland
is firing overtime)

~~~
jstanley
What's a Cassandra gland?

~~~
kagamine
And how can costs be gibbering?

Staggering via autocorrect?

~~~
andwur
I think they mean that viewing the costs _induces_ gibbering in the viewer.

------
swang
I really have no idea bout UK/British politics even though I worked/lived in
Europe so...

Can someone explain this part of Brexit. Nigel Farage resigns in July 2016
after he wins the vote. Why? Says he did "his job" and didn't want to be a
career politician (according to Wiki)

Then earlier this month he stepped back in as party leader of UKIP after his
replacement was forced(?) out/unable to garner support? Did he just get bored
and want his job back? Seems like he has ample time to fly over to the States
to pump up Trump.

What I'm trying to get at is this whole Brexit triggered a huge depression in
the value of the Pound. Yet the Conservatives and UKIP are still in power? Or
can no one do anything until the next general elections?

~~~
dx034
Regarding your last point: A depreciation of the currency is generally
positive for a country. Expensive imports give incentive to use local products
(e.g. food), at the same time exports become more competitive. That is the
reason why the US accused China of keeping it's currency weak for years. It's
the volatility in the exchange rate which makes it harder for companies to
plan reliably, but most will profit from the new level (except airlines).

So while there will be some inflation (estimated at 3% at the moment), the
economy profits from the exchange rate movements. The underlying problem is
that the GBP lost value because of the uncertainty, and this uncertainty is
not good for the economy. However, people voted for Brexit and a lot of them
are happy with the result. So this uncertainty won't necessarily lead to less
consumption. Current economic data looks better than what was anticipated
before.

So as long as people are happy with the current situation and the outlook, the
economy could actually profit from the vote in the short term. The longer term
is of course very dependent on the deal that the UK will get.

Regarding your other points: A lot of promises were made in the campaign that
are completely unrealistic (£200mln a week for the NHS). Not being part of the
government makes it easier to ignore those promises. Boris is probably one of
the only ones who could face questions at some point, in case the deal isn't
as great as he believes.

As Conservatives are already in favour of a hard Brexit, it's hard for UKIP to
get many voters in that space and to gain more seats in the next election.
Farage saw the chance to sell the vote as his win (although he wasn't even
part of the official campaign) without having to implement any of the
consequences. The party is an absolute mess. They don't seem to have a lot of
competent people, so Farage basically had to take over again. I don't think he
planned that. Especially as they'll have to find a motto now. Their purpose
was to get the UK out of the EU. With that done, the question is why people
should vote for them.

~~~
vidarh
> So as long as people are happy with the current situation and the outlook,
> the economy could actually profit from the vote in the short term.

We'll see over Christmas, as the Christmas shopping is now the first time that
people will really feel the rising prices. Given that more Leave voters regret
their vote than Remain voters already, it'll be interesting to see polls in
Jan/Feb as well.

> (£200mln a week for the NHS). Not being part of the government makes it
> easier to ignore those promises.

They're now faced with a letter from 40 MPs asking them to either honour the
_350m /week_ (not 200) or explain why several Tory cabinet members misled the
public during the campaign. Of course they'll do neither but that isn't the
purpose either - the purpose is press. But given that a number of Leave
campaigners are part of the goverment you can expect the next two years to
consist of a constant stream of attempts to embarrass them over those
claims...

> As Conservatives are already in favour of a hard Brexit

 _Some_ are. At least on the surface. May has a small enough majority that it
is very possible she'd face rebellion over that. But then again, May presided
over the Home Office for 6 years and talked up being tough on immigration and
achieved pretty much nothing - quite possibly on purpose - so I'm not so
convinced that she actually wants hard Brexit, but is using the same tactics
of talking up how hardline she'll be to the public and pursue a softer line.
Of course the problem with that this time is that her counterparts in Europe
are hearing all of this too.

~~~
dx034
> They're now faced with a letter from 40 MPs asking them to either honour the
> 350m/week (not 200) or explain why several Tory cabinet members misled the
> public during the campaign.

You're right, the number was even higher. But I think it's clear to everyone
that the NHS will never see that money. And most newspapers are still in
favour of Brexit and won't remind politicians of that promise.

> Some are. At least on the surface. May has a small enough majority that it
> is very possible she'd face rebellion over that. But then again, May
> presided over the Home Office for 6 years and talked up being tough on
> immigration and achieved pretty much nothing - quite possibly on purpose -
> so I'm not so convinced that she actually wants hard Brexit, but is using
> the same tactics of talking up how hardline she'll be to the public and
> pursue a softer line. Of course the problem with that this time is that her
> counterparts in Europe are hearing all of this too.

I agree, don't think either that May really wants a hard Brexit. But it makes
her popular with the people. Don't think her strategy will pay off. In the end
there will always be a parliament in the EU blocking any Brexit deal that
would give sth away to the UK. Belgium has shown that nicely with CETA.

------
hd4
Preaching to the converted here, but this is yet another incentive to switch
to a Linux distro, thanks Microsoft.

Also worth remembering that Britain is still de facto in the EU for a few more
years.

~~~
mhroth
Yes but the pound is tanking _now_ ;)

~~~
DominikR
Britain has basically a Communist running the country right now so it's not
really a surprise.

[http://www.telegraph.co.uk/business/2016/10/05/no-prime-
mini...](http://www.telegraph.co.uk/business/2016/10/05/no-prime-minister-the-
government-doesnt-always-know-whats-best/)

Theresa May could have done all kinds of things to force favourable Brexit
terms for the UK.

For example she could continuously lower corporate taxes for foreign
investment for while not activating Article 50 and simply wait until it really
hurts the EU. If the EU doesn't give in the UK continues to wait and makes a
lot of money in the process, if it does then the UK also wins.

I suspect that the UK's prime minister actually wants to tank the economy to
do another Brexit vote. (the EU loves this, just repeat until you get the
desired result - that's one of the reasons why the EU will fail)

She really wants to join her friends at the Soviet High Command in Brussels
again.

~~~
Xylakant
> For example she could continuously lower corporate taxes for foreign
> investment for while not activating Article 50 and simply wait until it
> really hurts the EU. If the EU doesn't give in the UK continues to wait and
> makes a lot of money in the process, if it does then the UK also wins.

As the irish figured out, arbitrarily low corporate taxes are just not
possible in the EU. This approach would also alienate all partners that she
needs to work with later in the process, so that's probably a pretty bad idea.
Additionally, it would put her under massive pressure from the brexit fraction
that wants migration control yesterday, no matter the costs. Last but not
least, the EU could just take the stance that the continued announcements of
the legal government to invoke article 50 constitute sufficient grounds to
start the proceedings. The UK could certainly fight this, but well, there's
sufficient ways for the EU to make the UK sufficiently miserable in turn. All
in all, negotiation tactics that alienate the people on the other side are not
a good idea if you're an island and the economy right across the channel is
bigger than yours.

~~~
DominikR
> As the irish figured out, arbitrarily low corporate taxes are just not
> possible in the EU.

Well but sorry, you are wrong here. The Irish selectively made deals with
companies, that was ruled illegal. Not having low taxes, which works great in
case of Malta. (5% tax for foreign investors)

[http://www.forbes.com/sites/leesheppard/2016/09/05/the-eu-
ca...](http://www.forbes.com/sites/leesheppard/2016/09/05/the-eu-case-against-
apples-irish-tax-deal/#6a2e7b0d7e2b)

> Last but not least, the EU could just take the stance that the continued
> announcements of the legal government to invoke article 50 constitute
> sufficient grounds to start the proceedings.

I suspect more countries would leave the EU if it did something highly illegal
like that, but can't be ruled out. The EU is like the Soviet Union so
criminality is part of its nature.

~~~
tremon
So sad. If you had left out your last sentence, you could have actually made a
valuable contribution to this discussion.

------
misja111
Meanwhile, in Switzerland, businesses are suffering because the Swiss Franc is
too strong.

There are always two sides to a rising or falling currency. In the case of the
weak Pound, it is good for exporting British companies and for tourism.

~~~
paganel
I've been on a 10-day vacation this summer in Switzerland and while I was
there I was always asking myself how do the Swiss export-oriented companies
manage to stay afloat.

~~~
detaro
Exporting goods where price is less important once you have people convinced
that they want your product: luxury goods, weapons, specialized high-tech
devices, medicine (bunch pharma companies are swiss, I don't know how much
they produce locally)

------
elcct
Every excuse is good to make some more money. Maybe this will make companies
look for OSS alternatives. I doubt it will make any impact for government
agencies, as they are not spending their own money ;)

------
wilhil
Who knows the truth about Brexit just yet... Trade deals will come in and we
will probably get back to where we were - in the long term.

... If/when we get there, any bets Microsoft will not lower pricing?

