Economic Impact - News from the Brexit Cliff Edge - 24th May 2019View this newsletter in full
British Steel is the canary in the coal mine - we need to prepare now for the Brexit threat to jobs
The announcement that British Steel is to enter insolvency is the latest example of how uncertainty over Brexit is threatening livelihoods across the country. This does not just affect the 5,000 workers at Scunthorpe, but also a support staff of 20,000 across the whole supply chain. Sadly, many other firms face the same danger because of Brexit and the loss of European customers who are uncertain about future trading relations. One recent estimate put the economic damage Brexit has already inflicted on the UK at £600m a week. Try sticking that on the side of a bus.
Meanwhile, leading business groups, including the British Chambers of Commerce, expect the economy to remain weak throughout this year as investment stutters, while major manufacturers from Airbus to BMW warn that a no-deal scenario could well force them to move operations and jobs abroad.
23rd May 2019 - The Independent
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Holidaymakers hit as pound slides
The pound has fallen to its lowest level for five months just as many UK holidaymakers get ready to head off for the late-May half-term break.
Against the US dollar, the pound fell below $1.27 for the first time since January on Tuesday. It also fell early in the day against the euro. But it picked up again later in the day in a sign of its current volatility. Cabinet backing for Prime Minister Theresa May's latest Brexit plan led to the rebound. Currency experts say Brexit uncertainty and the US-China trade war have both contributed to the pound's recent fall.
22nd May 2019 - BBC
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The UK government built a $146 billion war chest to stop a run on the pound in the case of a 'no-deal' Brexit, Bank of America says
The UK government built a $146 billion war chest in the fourth quarter to defend against an anticipated run on the pound if Britain left the EU with no deal, according to a foreign exchange reserve analysis by Bank of America. BofA analysts Kamal Sharma and Sebastien Cross called the buildup "unprecedented" among the larger global economies, in a note to clients seen by Business Insider. "In the fourth quarter, UK FX reserves rose $23 billion to $146 billion (gross reserves)," they wrote. "In nominal terms, this is a 19% quarter-on-quarter increase in reserves and the largest quarterly increase since our series began in 2000. The scale of this pace of reserve accumulation compared to other G10 economies is unprecedented."
17th May 2019 - Business Insider
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Jaguar Land Rover CEO denies holding talks over sale to Peugeot
Jaguar Land Rover’s chief executive has denied the carmaker is in talks with Peugeot over a possible sale. The British company’s Indian owner, Tata Motors, was last week forced to deny reports of advanced talks with France’s PSA Group, which owns Peugeot, Citroën and Vauxhall. The Press Association reported a “post-sale integration document” was passed around senior executives at the companies, detailing the potential benefits of a tie-up. Speaking on Wednesday, JLR’s chief executive, Ralf Speth, said he had met Carlos Tavares, his PSA counterpart, at the latest gathering of the European car industry lobby group but they did not discuss any deal. “I didn’t have any discussion about it with him at all,” Speth said at the FT future of the car summit in London. However, he declined to comment on whether Tata Motors had engaged in talks.
15th May 2019 - The Guardian
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One in four northerners earn less than 'real living wage', says study
One in four workers in the north of England are paid less than the “real living wage” of £9 an hour, a study has found. The rise of zero-hours contracts and a decade of stagnant wages has left 1.6 million northerners earning less than what they need to live, according to the thinktank IPPR North. Women are most affected by what it describes as the “job quality crisis”, with one in three women paid less than the real living wage compared with one in five men.
15th May 2019 - The Guardian
Emmanuel Macron infuriates Nato allies by freezing UK firms out of EU defence contracts after Brexit
Emmanuel Macron is manoeuvring to cut British companies out of bidding for lucrative defence contracts in the EU after Brexit, in a move that has infuriated France’s Nato allies. The French president is leading a blocking minority of EU countries to freeze the UK and non-EU Nato allies out of bidding for project contracts in the Permanent Structured Cooperation (Pesco) initiative. US defence chiefs and EU diplomats warned that the hardline French stance would risk dividing Nato members, despite regular protestations from Brussels that its pooled EU military programme would never undermine the alliance that has guaranteed European security for 70 years.
15th May 2019 - The Telegraph
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British Steel asks for state help to avert 'Brexit related' crisis
British Steel is seeking emergency funds from the government, blaming politicians’ failure to strike a Brexit deal for a crisis that leaves one of the UK’s last two steelworks – and 4,500 staff – facing an uncertain future. The company, which owns the Scunthorpe steelworks, is in rescue talks with its lenders over a £75m rescue package that is understood to be at risk of falling apart unless the government contributes. British Steel blamed “Brexit-related issues” for its difficulties, with one source saying orders from increasingly anxious customers in the European Union had “dried up”. The government is thought to have drafted contingency plans after lenders to the company, which is owned by private equity group Greybull Capital, said they would consider putting it into administration if no money was forthcoming.
14th May 2019 - The Guardian
British Steel seeks new £75m taxpayer loan to avert collapse
14th May 2019 - Sky News
British Steel seeks government loan for 'Brexit issues'
14th May 2019 - BBC
Ford to Cut Up to 550 U.K. Jobs as Part of Europe Restructuring
Ford Motor Co. will cut as many as 550 jobs in the U.K. as part of a revamp announced in January of its loss-making European business, according to a person familiar with the matter. The U.S. vehicle manufacturer, which has said it’ll reduce its German workforce by 5,000 positions, will cut jobs in its salaried non-manufacturing areas in the U.K., the person said. The move was reported earlier by London’s City AM newspaper.
14th May 2019 - Bloomberg
Britain risks heading to US levels of inequality, warns top economist
Rising inequality in Britain risks putting the country on the same path as the US to become one of the most unequal nations on earth, according to a Nobel-prize winning economist. Sir Angus Deaton is leading a landmark review of inequality in the UK amid fears that the country is at a tipping point due to a decade of stagnant pay growth for British workers. The Institute for Fiscal Studies thinktank, which is working with Deaton on the study, said the British-born economist would “point to the risk of the UK following the US” which has extreme inequality levels in pay, wealth and health.
14th May 2019 - The Guardian
UK wage growth stalls despite record employment
Wage growth has slowed in the UK to put a squeeze on living standards despite the unemployment rate falling to its lowest level for more than 40 years. The fall in pay growth to 3.3% on the year in the three months to March, from 3.5% in the three months to February, also came as the buoyant labour market recorded a rise in employment to a new high of 32.7 million. The Office for National Statistics said the growing number of vacancies, together with the falling level of unemployment, indicated the jobs market was continuing to tighten. The jobless rate fell from 3.9% to a record 3.8%, the lowest since 1974. However, analysts said the shadow of Brexit uncertainty, which has sent business investment plummeting, was likely to have discouraged firms from hiring and improving wage rates. Illustrating the lack of investment, labour productivity, which measures the labour force’s output per hour, fell for the third consecutive quarter
14th May 2019 - The Guardian
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The Brexit effect: private equity firms shun UK for Europe
The main issue for private equity firms when it comes to British companies is the difficulty of assessing the risk they are acquiring. Even seasoned investors such as Howard Marks, who have made hundreds of millions of dollars investing in high-risk situations, are not sure how to go about investing in the UK. “Whether to invest in anything is always a question of the relationship between price and value, as well as the outlook for value,” says Mr Marks, the co-founder of Oaktree Capital who has made himself a billionaire from a career of investing in complicated deals such as raising large distressed debt funds to invest in undervalued assets. “I don’t know enough about these things to know whether the balance is currently attractive.” He adds: “All I know is that value in the UK is reduced from what it was two to three years ago, because Brexit introduces so much uncertainty and downside risk . . . maybe they’ve moved down so much that assets are cheap.” James Seagrave, global head of financial sponsors coverage at BNP Paribas in London, says the UK market has become “sclerotic” as a result of Brexit.
12th May 2019 - Financial Times
UK high streets 'in downward spiral' with one in 10 shops empty
One in 10 shops in UK town centres are lying empty, according to figures that underline the scale of the high street crisis. The national town centre vacancy rate climbed to a four-year high of 10.2% last month, according to the British Retail Consortium (BRC) vacancies monitor. The vacancy rate has risen in each of the last four quarters to give the highest reading since April 2015, up from 9.9% three months ago. The BRC’s chief executive, Helen Dickinson, said some struggling high streets were trapped in a downward spiral: “Empty shopfronts, particularly for larger stores, can deter shoppers from an area. This effect can be cyclical, with the long-term decline in footfall pushing up vacancy rates, particularly in poorer areas.”
12th May 2019 - The Guardian
UK economic growth picks up as stockpiling bolsters manufacturing
Britain’s economy strengthened in the first three months of the year, with growth of 0.5% helped by unprecedented stockpiling by manufacturers fearful of the impact from a no-deal Brexit. It was an improvement on 0.2% growth in the previous three months and was bolstered by the strongest quarterly performance for manufacturers since 1988, with factory output up 2.2%, according to the figures from the Office for National Statistics. However, widespread uncertainty about the Brexit negotiations proved to have a greater impact in March as the services sector and construction sectors went into reverse to leave GDP down 0.1% month on month.
10th May 2019 - The Guardian
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'Customs Union Brexit' will hit us by £80 billion a year, says new research
There would be an £80 billion hit to national income and a £13 billion cut to money for public services even if we leave the EU with a customs union deal, a report has claimed. The report by the National Institute of Economic and Social Research (NIESR) says that a customs union deal with the EU would only halve the impact of a no-deal Brexit. All regions of the UK would end up poorer than if we had simply remained in the EU, said the report. A customs union deal would still leave people worse off by an average of £800 a year, and could reduce the treasury's tax revenue by £26 billion.
9th May 2019 - The New European
Customs Union Brexit deal would leave Brits £800 a year worse off experts say
9th May 2019 - Daily Mirror
Brexit would cost us £800 each every year if we stay in the Customs Union
Labour’s plans for a customs union with the EU after Brexit would leave each person £800 a year worse off, according to respected economists. Keeping the UK tied to the trading bloc would deliver an £80 billion hit to the UK’s national income the National Institute of Economic and Social Research (Niesr) has warned. Taxes would have to rise or public services be cut to make up the shortfall, a new report has warned. The issue is at the heart of the flailing Brexit talks between Theresa May’s government and the opposition. Jeremy Corbyn is pushing to keep the UK in the customs union while leaving was always something Mrs May would not reconsider. Staying in the customs union has been referred to as a ‘compromise deal’ as the UK would be able to do frictionless trade with the rest of the EU.
9th May 2019 - Metro.co.uk
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UK to lose £1.1bn in carbon-credit revenue in event of no-deal Brexit
The UK will lose more than £1.1bn in revenue as carbon-emitting companies escape paying for the pollution they cause if the country crashes out of the EU without a withdrawal agreement in October, according to Sandbag, a climate policy think-tank. From January, Brussels stopped providing carbon allowances, or credits, to the UK government for auction under the EU Emissions Trading Scheme, because of uncertainty around Britain’s position in the bloc. Under the cap and trade programme, the UK government receives millions of carbon allowances each year. Roughly 40 per cent of these are given to high-emitting companies, while the rest are auctioned, with the revenue kept by the Treasury to subsidise climate policies. The government has said that a no-deal Brexit would exclude the UK from participating in the ETS from November.
8th May 2019 - Financial Times
Pound slides to one-week low as Brexit talks falter
Sterling slumped on Wednesday on signs that Brexit talks between Britain's government and the main opposition party may soon collapse. The pound has been falling as negotiations between the Conservative and Labour Parties lumber on with little success and as concerns grow about a challenge to Prime Minister Theresa May’s leadership. But a suggestion by broadcaster ITV’s political editor that the talks could be pronounced dead later on Wednesday took sterling down another leg.
8th May 2019 - Reuters
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1st Jan 1970 -
Banks lose appetite for new Brexit fight
While Britain debates the merits of a second Brexit referendum, London’s financial centre is steering clear of the argument, resigned to the need to shift some business elsewhere. Burned by backing the ill-fated Remain campaign three years ago, major global and British banks told Reuters they would shy away from taking a similar position in a new vote, preferring to spend time and money on “future-proofing” their business, including tackling outdated technology and moving into new markets. A Reuters survey of leadership attitudes at 17 British and global banks found just six of the 11 institutions who responded to the survey backed the idea of a People’s Vote to break a parliamentary impasse on a proposed exit deal.
Four banks said they opposed another vote while one bank said it would remain agnostic on all Brexit scenarios and would let the political process - now stretching towards its third year - run its course.
7th May 2019 - Reuters
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Cold money How is Brexit affecting FDI into Britain?
So have investors brushed off Brexit? Not quite. Some industries have noticeably cooled on Britain. It was the top destination for cross-border mergers and acquisitions involving American tech firms in 2014-17. But in 2018 it tumbled to eighth place. In October the UK Trade Policy Observatory at Sussex University modelled a counterfactual Britain that had voted Remain, and found that the Leave vote had reduced inward FDI by a fifth. Brexit affects domestic firms, too. In January Barclays bank received legal approval to move €190bn ($213bn) of assets to Dublin, fearing no-deal. The London School of Economics recently found the Brexit vote had caused a 12% rise in investment by British firms in the rest of the EU. That capital might otherwise have been used at home. FDI remains strong, but it would be stronger minus Brexit. And Britain has not even left yet.
5th May 2019 - The Economist
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UK on HSBC watchlist over Brexit uncertainty
A top HSBC executive has urged a swift solution to Brexit, telling Sky News that the uncertainty is hurting business and consumer confidence. Speaking to the Ian King Live programme, the banking giant's chief financial officer Ewen Stevenson said the UK was on a list of world markets that HSBC was concerned about. He was speaking as the global lender reported a 31% hike in profits in the first quarter of the year, despite counting the cost of economic uncertainty in the UK.
5th May 2019 - Sky News
Brexit will hammer Britain's financial services - and no-one seems to have noticed
Regulators on the continent have taken a firm line on British demands for special deals covering financial services. Germany and France see Brexit as an opportunity to build up their own insurance, asset management and banking sectors. Firms will be required to constantly beef-up their operations on the continent if they want to keep doing business in it. UK firms are already choosing to grow their operations in the EU27 - not only to ensure compliance with the bloc's rules, but also to be nearer to where regulatory and political decisions are made. It's no coincidence that the insurance marketplace Lloyd’s of London picked Brussels - a political, but not financial, centre - as the location for its first-ever full foreign subsidiary. US and Japanese firms looking for a location to base their European headquarters no longer see London as the default option, according to Sir Mark Boleat, deputy chairman of the City of London Corporation's Policy and Resources Committee. Putting all their eggs in one basket carries far more political risk for these firms than they ever thought possible before June 2016.
2nd May 2019 - Politics.co.uk
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Bristol’s economic prosperity 'at risk' over no-deal Brexit
Failure to secure a good Brexit deal with the EU risks putting Bristol’s economic prosperity at risk, a think tank is warning. A total of 55 per cent of Bristol’s exports are sold to the bloc and are worth around £3.6billion to the city’s economy, or £8,508 per worker. But local exporters are facing tariff barriers if the government fails to secure a good Brexit deal, says urban policy research unit Centre for Cities.
2nd May 2019 - Bristol Post
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UK factory exports tumble as Brexit chaos takes toll
Fears over the threat of a disorderly Brexit lost UK companies new orders from international clients last month as factory exports plunged, according to a survey.
UK manufacturers’ exports declined at the second-fastest rate in four and a half years in April, amid a slowdown in factory output, the figures from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) show.
1st May 2019 - The Guardian
Brexit drains £30bn from UK funds
Investment funds based in the UK haemorrhaged £30bn in the 12 months to the end of March, as Brexit uncertainty prompted investors to spurn UK assets and shift money to EU-regulated products. The UK came close to leaving the EU without a formal agreement on March 29. Although this possibility was ultimately precluded by an extension to the exit date, news of the delay came at the last minute. New research by Morningstar, a data provider, shows that funds domiciled in the UK were hit hard by the Brexit unease, losing £5bn in assets in March and £30bn in total over a 12-year period. Bhavik Parekh, associate analyst for manager research at Morningstar, said: “In the months leading to the deadline, investors and fund [managers] became increasingly worried over the impact of an unfavourable deal and its negative implications.” The outflows were partly driven by investors culling their exposure to asset classes vulnerable to Brexit shocks, such as UK companies. UK equity income funds — a longstanding investor favourite — bled £3.1bn over the year to the end of March.
2nd May 2019 - Financial Times
Trouble ahead for UK manufacturers as April PMI dips
Stockpiling had been the key theme in UK manufacturing over recent months, as concerns rose about the possibility of an imminent ‘no deal’ Brexit. Recent PMI surveys had suggested that firms were building inventory at an unprecedented rate – faster in fact than any G7 economy has experienced in the survey’s history. But now that Article 50 has been extended and the immediate risk of ‘no deal’ postponed, this stockpiling activity has eased slightly according to the latest survey data. This helped take the manufacturing PMI from 55.1 in March to 53.1 in April.
1st May 2019 - ING Think
The Irish Farmers Association says Brexit has so far cost beef farmers over €100m.
The Irish Farmers Association says Brexit has so far cost beef farmers over €100m.
They say price cuts brought on by Brexit have left many on the brink of going out of business. A protest to highlight their concerns is taking place outside a meeting of Cabinet in Cork later. IFA President Joe Healy says beef farmers are suffering and the Government needs to act like they said they would. "The minister has adopted a wait and see approach and this government has said that they'd have farmers' backs in the case of Brexit - well know we want them to back up their words," said Mr Healy. "We don't have to wait and see. Farmers have endured the pain of Brexit in their pockets, where it really hurts." "Unless they're supported they'll go out of business."
1st May 2019 - Irish Examiner
Car industry warns of return to 'dark days' as manufacturing falls again
UK car manufacturing fell for the tenth month in the row in March as the industry warned that output from the sector could fall to 1980s levels in the event of a no-deal Brexit. The number of cars produced declined to 126,195, 14.4% lower than in the same period last year, according to the Society of Motor Manufacturers and Traders (SMMT). It reported an 18.1% fall in vehicles produced for domestic use and a 13.4% downturn for overseas - the latter blamed on continued weaker demand in key Asian and European markets. But the SMMT added that exports represented nearly four-fifths of overall production, demonstrating the importance of free and frictionless trade.
1st May 2019 - MSN.com
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Brexit News: British Pound Sterling Exchange Rates Boosted As Cross-Party Brexit Talks Near Final Stages
According to sources close to the talks, PM May could be willing to accept the possibility of a post-Brexit customs union, much to the chagrin of the more eurosceptic elements of her own party. Speaking to the BBC on Tuesday morning, foreign secretary Jeremy Hunt said Conservative Party MPs would not accept a cross-party Brexit compromise involving a customs union. "If we were proposing, which I very much hope we don’t, to sign up to the customs union, then I think there is a risk that you would lose more Conservative MPs than you would gain Labour MPs," said Hunt.
30th Apr 2019 - Exchange Rates
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Brexit threatens pound’s status as global currency, survey says
Brexit is likely to threaten the pound’s status as a global reserve currency according to a survey of central bank money managers who say Britain’s departure from the EU will alter their views on sterling. The pound’s history as one of the most important global currencies has meant central banks have long held assets denominated in pounds that can be sold quickly to help curb swings in their own currency’s exchange rates. But a poll by Central Banking Publications, a trade journal, suggests its status will be endangered by Brexit, with three-quarters of reserve managers predicting that central banks will collectively alter — and in all likelihood cut — their sterling holdings. More than one-third of 80 people surveyed — managers working at central banks that hold €7tn in assets — indicated that they would reduce the sterling holdings they personally control.
29th Apr 2019 - Financial Times
UK car output falls 14% in March, worse seen if no Brexit deal
British car output fell for the tenth month in a row in March, hit by a slowdown in key foreign markets, and the sector stands to suffer a lot more if the country leaves the European Union without a deal, an industry body said on Tuesday. Output tumbled by an annual 14.4 percent to 126,195 cars in March, the Society of Motor Manufacturers and Traders said. Exports, which account for nearly four out of every five cars made in Britain, were down by 13.4 percent. The SMMT said analysis it had commissioned predicted output would fall this year to 1.36 million units from 1.52 million in 2018, assuming London can secure a transition deal with the EU. If Britain has to rely instead on World Trade Organization rules for its trade with the bloc, which include import tariffs, output is forecast to fall by around 30 percent to 1.07 million units in 2021, returning to mid-1980s levels, the SMMT said
30th Apr 2019 - Reuters
How has Brexit vote affected the UK economy? April verdict
Britain’s economy is trapped in “no man’s land” by Brexit and the next decade could be the weakest for growth since the second world war, a former senior Bank of England policymaker has warned. Andrew Sentance, a former member of the central bank’s interest rate-setting monetary policy committee (MPC), said: “The UK economy will be limping on for a while, until Brexit negotiations are fully resolved. I can see the UK being in this limbo-land for quite a while – certainly until the late 2020s.” The warning comes as the Guardian’s Brexit dashboard reveals robust growth at the start of the year, fuelled by a dramatic rise in stockpiling before the original Brexit date of 29 March, now postponed until the end of October.
30th Apr 2019 - The Guardian
Brexit will slow UK economy for rest of 2019, forecaster warns
Howard Archer, the EY Item Club’s chief economic adviser, said: “Delays to Brexit, a difficult domestic economic and political backdrop and slower global economic activity have resulted in a weaker outlook for UK GDP growth this year.” The report said the Bank would probably leave interest rates at 0.75% – where the base rate has been set since August last year – throughout 2019. However, it added that a 25 basis point hike over the summer to 1% could not be ruled out, if the economy continued to show resilience and the labour market strengthened further.
29th Apr 2019 - The Guardian
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Brexit: Stockpiling increases to record level
Manufacturers stockpiled goods at the fastest pace on record during the three months to April as the danger of a no-deal Brexit loomed large and sent business confidence tumbling. An unprecedented number of companies in the sector amassed inventories of raw materials and part-finished goods, as well as completed products, the CBI said in its latest industrial trends survey. A balance of 39 per cent of businesses reported a rise in stocks of raw materials compared with three months ago, while the reading for unfinished products was 21 per cent and finished goods 25 per cent.
27th Apr 2019 - The Times
Brexit could leave England as 'economic basket case' - MP warns
It is in Scotland's interests to prevent Brexit turning England into an "economic basket case", SNP home affairs spokeswoman Joanna Cherry has insisted. The MP argued even if Scotland were to be independent it would be better for the country to "keep England as close as possible to the single market and customs union as possible". UK Prime Minister Theresa May has so far refused to consider either of these options as she tries to win support for her Brexit deal at Westminster. Ms Cherry said: "Despite the fact that I think Brexit is a disaster for the United Kingdom, I think it is in the interests of Scotland and the SNP to keep England as close as possible to the single market and customs union as possible. "It will make it easier for us to be independent if England is in the same overall union and market for us."
27th Apr 2019 - Irish Independent
Goldman Sachs says dragged-out Brexit is doing deeper damage to UK economy
Goldman Sachs said in a note to clients that its base scenario was the divorce deal would be ratified by May 22 but that there was a risk of Britain's exit being delayed until much closer to the new October 31 deadline. "The politics of Brexit have become more protracted and, as a result, the side-effects of Brexit on the UK economy have intensified," Goldman said in a note entitled "Brexit — Withdrawal Symptoms". "From both a top-down and a bottom-up perspective, Brexit has taken a toll on the UK economy — even though it has not yet happened," Goldman said.
It said Britain's economy has underperformed other advanced economies since mid-2016, losing nearly 2.5pc of Gross Domestic Product relative to its pre-referendum growth path, in large part due to weaker investment.
26th Apr 2019 - Irish Independent
Goldman Sachs says dragged-out Brexit is doing deeper damage to UK economy
Britain’s protracted divorce from the European Union is hurting the world’s fifth largest economy as dwindling company investment, signs of a looming labour market shock and poor productivity hinder growth, Goldman Sachs said.
26th Apr 2019 - Reuters
Warren Buffett ready to buy in Britain regardless of Brexit
Billionaire investor Warren Buffett has said he is “ready to buy something in the UK tomorrow”, handing a big endorsement to Britain ahead of Brexit. “We welcome the chance to put money out any place where we think we understand and sort of trust the system,” the 88-year-old told the Financial Times in a broad-ranging interview. “We’re never going to understand any other culture or the tax laws or the customs as well as the US, but we can come awfully close in Britain.”
26th Apr 2019 - Financial Times
Brexit's Financial Turf War Enters A New Phase
Rarely have policymakers seemed so keen to snap the links that connect global markets, even at the risk of economic self-harm. Theresa May’s dogged pursuit of a Brexit that takes Britain out of the European Union’s single market and customs union is an obvious own goal, considering the City of London’s global position. The U.K.’s intransigence has already sent an estimated 800 billion pounds ($1 trillion) of bank assets and 5,000 jobs across the English Channel and Irish Sea. Meanwhile, the EU’s plans to build high regulatory walls to protect its markets from a rogue neighbor have also led to some head-scratching propositions from Brussels, such as potentially forcing fund managers to trade top U.K. stocks on continental European soil rather than in London
26th Apr 2019 - Bloomberg
S&P and Fitch warn UK rating still at risk from a no-deal Brexit
Britain’s credit rating remains at risk of a further downgrade despite the extended deadline for its departure from the European Union, ratings agencies S&P Global Ratings and Fitch Ratings said on Friday. S&P said its negative outlook reflected the risk of sustained economic weakness and a hit to government finances if Britain lost access to EU markets, investors took fright or sterling’s status as a reserve currency came under pressure. Fitch and S&P both have a AA rating on British government debt.
26th Apr 2019 - Reuters
RBS profits sink as bank warns of Brexit uncertainty
RBS profits fell in the first three months of 2019, it revealed a day after its chief executive announced his intention to resign. Ross McEwan yesterday announced he would step down after five-and-a-half years at the helm, saying he had achieved his strategy to refocus the bank after its £45.5bn government bailout. However, today the bank warned that ongoing Brexit uncertainty will pile further pressure on profits this year, sending shares down 5.5 per cent to 236.3p in early trading.
26th Apr 2019 - City A.M.
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Germany knows we’re open for post-Brexit business
The serious challenges lie in the long term, where it will be difficult to maintain that status quo, and firms will be operating in an environment with greater uncertainty, higher costs, a larger administrative burden and will have a reduced labour pool.
25th Apr 2019 - The Scotsman
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No 'duty of care' rule for financial firms for now - UK watchdog
Britain’s markets watchdog has ruled out a new “duty of care” protection for consumers for the time being, saying it will focus instead on revising existing rules. Regulation is also coming under the spotlight as backers of Britain’s departure from the European Union say that Brexit is an opportunity to cut “red tape” on financial firms to keep London competitive as a global financial centre. “We know that consumer harm can be caused by different things, so there is unlikely to be a one-size-fits-all solution to any weaknesses in consumer protection,” the FCA said.
23rd Apr 2019 - Reuters
Tories no longer have an economic vision — and they are in trouble
It would be easy to see all this as consequences purely of Brexit and Theresa May. Without Brexit, there would have been no May premiership and no shift towards the dominance of the Home Office view of the world, with the Treasury consequently diminished. Brexit has claimed all the government’s bandwidth and left little time for anything else. “The government gives the impression that it sees its job as to form a moral view on the economy and deploy the law against the bad bits — as soon as it can work out what those are . . . The extent to which this government sees the economy not through an economic prism but through a moral one seems remarkable.”
17th Apr 2019 - The Times
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Brexit-related price hikes see UK families spend billions more on everyday goods, new research finds
People in the UK are paying billions of pounds more for everyday goods because of Brexit-related price hikes, new research has found. The fall in the value of the pound after the 2016 Leave vote means money spent by individuals and businesses on imported items does not stretch as far as it used to. As a result, consumers and businesses have had to pay at least £15bn more for the same items, according to analysis by the People's Vote campaign. The group said the price of filter coffee has risen by 10 per cent, the cost of bananas has increased by the same amount and a glass of wine bought in a pub or restaurant has gone up by 8 per cent. Combined with flat-lining wage growth, it suggests households are having to spend more for less.
Divided between the UK's 27 million households, it suggests the average household will have paid at least £550 more since 2016.
21st Apr 2019 - The Independent
Jean-Claude Juncker: Economic turmoil after Brexit will be UK's fault
Jean-Claude Juncker, the European Commission chief, has warned that the UK would be "100 per cent" responsible if its decision to leave the EU caused economic turmoil, as he urged MPs to vote for Theresa May's Brexit deal. In an interview with a German newspaper, Mr Juncker urged the UK not to waste its six month extension to the Article 50 process and added that he did not have hopes of the UK eventually reversing Brexit. "We need to be prepared for a soft and a hard Brexit. In any event, the UK’s withdrawal will have a negative impact - more for the British than for the EU," he told Funke. "There will be no single-market-based solution. As far as I am concerned, the British side bears 100 per cent responsibility
20th Apr 2019 - The Telegraph
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Disorderly Brexit 'risks Scottish recession'
A disorderly Brexit risks a deep recession in Scotland, according to researchers. The Fraser of Allander Institute (FAI), part of the University of Strathclyde, predicts a loss of more than one £1 in every £20 of output from the economy. It suggests the fall from peak to trough in the economy could be around 5.5% of total output, contracting for two whole years. This is in line with forecasts made by the Bank of England for the UK economy. The FAI modelled several possible Brexit outcomes and the impact in its latest economic commentary. This included scenarios of a no-deal Brexit with and without policy response.
17th Apr 2019 - BBC
Hard recession awaits Scotland if UK crashes out in no-deal Brexit
17th Apr 2019 - The Scotsman
Brexit panic: Germany urged to take urgent action as economy slows due to UK's EU exit
The German government has been urged to offer companies incentives in a bid to boost corporate research and development after cutting its forecast for 2019 economic growth for the second time in three months, with Economy Minister Peter Altmaier blaming concerns over Brexit for a slowdown driven by a recession in manufacturing. To counter the slowdown, Finance Minister Olaf Scholz plans to support corporate research and development with incentives worth 1.27billion euros ($1.43billion) annually from 2020, a draft law seen by Reuters showed on Wednesday.
17th Apr 2019 - Express.co.uk
Britain is more optimistic about Brexit than gloomy forecasts suggest
The International Monetary Fund (IMF) is up to its usual tricks. Last week, it predicted a two-year recession in the UK in the event of a no-deal Brexit. In line with the thinking of Project Fear, in the middle of June 2016 the IMF predicted an immediate recession if the UK voted to leave. Exactly the opposite happened. The economy continued to grow, and unemployment to decline. To be fair, this time around there does seem to be evidence of a slow-down. The Office for National Statistics (ONS) suggests only modest growth at an annual rate of around one per cent in the last three months of last year. A recent Deloitte’s survey of chief financial officers found only 13 per cent of them more optimistic about prospects than they were three months ago.
17th Apr 2019 - City A.M.
Survey measures concern about Brexit impact on finances
A new survey has laid bare the extent to which people here think their financial situation will be impacted by Brexit. It found a quarter think that their personal finances will be majorly influenced by the departure of the UK from the EU. While two out of every five respondents said it would have a moderate effect. The poll was carried out by RED C on behalf of utility switching website bonkers.ie and questioned a representative sample of over 1,000 adults here in the middle of March. The results show that people living in rural areas are more concerned about the impact of Brexit on their pocket, with 32% or rural dwellers saying they are worried. A further 16% said they don’t know what Brexit will mean for them, reflecting the uncertainty being felt across the wider economy. A fifth of those questioned, however, were confident that Brexit will only have a minimal impact on their spending choices.
17th Apr 2019 - RTE.ie
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Did someone forget to tell NTT about Brexit? Japanese telco eyes London for global HQ
Japanese telco and tech behemoth NTT Corporation has chosen London for its new global headquarters amid a massive reorg, according to reports. Nippon Telegraph and Telephone Corporation – the parent of Di Data Group – is in the midst of a massive restructuring, with final details due to be announced in July.
But London has scored the global head office seemingly in spite of Brexit worries, reported Nikkei Asian Review.
16th Apr 2019 - The Register
UK boosts business bank by £200m as Brexit hits funding
The UK government is to inject £200m into a state-run scheme designed to provide financing for business amid concerns over a reduction in funding from the EU after Brexit. The British Business Bank, which works in partnership with other financial institutions to leverage private capital, offers to share the risk of certain losses on a portfolio of new loans made to companies. The government has faced calls to encourage the publicly owned bank, set up by the Conservative-Liberal Democrat coalition government in 2014, to invest in start-ups and help offset the impact that Brexit will have on funding for the tech sector.
16th Apr 2019 - Financial Times
Unemployment figures at record low in Northern Ireland
The Department for the Economy's (DfE) Labour Market Report for December to February shows that the unemployment rate was 3% - a 0.5 percentage point decrease over the quarter. This level is lower than the UK rate (3.95), the EU rate (6.5%) and that in the Republic (5.3%). While the amount for those out of work is at a record low, the employment rate has also reached a record high - 71.2%. This is an increase of 1.8 percentage points over the year, a "statistically significant" change, according to the DfE. In the last year, however, there has been 2,357 confirmed redundancies in Northern Ireland - a 24% jump when compared to the previous 12 months. A DfE spokesperson said: "The improvements in the NI labour market since 2017 are consistent with the UK experience, where unemployment and inactivity are joint lowest on record and employment is at a joint record high
16th Apr 2019 - Belfast Telegraph
UK unemployment at its lowest since 1974
New figures show unemployment is at its lowest since 1974, with more people either in work or looking for work. Ministers say it’s a sign of the “underlying resilience” of the British economy. And wage growth is rising too.
16th Apr 2019 - Channel 4 News
Why the EU carbon market is being roiled by Brexit
It seems that nothing can escape the claw-like grasp of Brexit: it is now the turn of the European carbon market to be roiled by Britain’s stuttering attempts to leave the EU. Prices for the allowances traded under the EU Emissions Trading System hit a 10-year high above €27 a tonne last week, in a move partly attributed to the receding chance of the UK leaving the bloc under a no-deal Brexit.
17th Apr 2019 - Financial Times
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An unlikely casualty of a hard Brexit - Turkey's exports
Already mired in recession, Turkey stands to lose access to its second-largest export market for years to come if Brexit goes wrong, with its autos, textiles and appliances facing the biggest risk. Britain and the EU agreed last week to delay Brexit until Oct. 31. But if Britain ultimately leaves without trade arrangements - a so-called “hard” or no-deal Brexit - most of Turkey’s $3.7 billion (£2.8 billion) trade surplus with the UK would be wiped out, according to a United Nations report. Turkey would feel the most pain with $2.4 billion in lost exports a year, followed by South Korea and Pakistan, the report said. Exports are considered vital to Turkey’s recovery from recession after last year’s lira crisis knocked some 30 percent off the value of the currency. If Britain leaves the bloc without a replacement trade deal, Turkey, covered by the EU’s customs union, would lose open access to the UK market.
15th Apr 2019 - Reuters UK
Brexit: UK businesses at most gloomy since referendum – Deloitte
British businesses are the most gloomy they have been about Brexit since the 2016 referendum, with eight out of 10 finance leaders expecting the long-term business environment to be worse as a result of the UK leaving the EU. Pessimism about the short-term effects of Brexit remains high, with nearly half (49%) of CFOs expecting to reduce their capital expenditure and 22% anticipating having to trim mergers and acquisitions activity. More than half (53%) of CFOs also expect to reduce hiring staff because of Brexit – the highest level in more than two years.
15th Apr 2019 - The Guardian
How the City of London’s Brexit lobbying barrage failed
The sector recognised how much it stood to lose if it did not keep its connections with the EU but the travelling caravan ruffled more than a few feathers. “There are lots of stories of arrogance . . . about the UK going round European capitals and saying ‘you need us’. That got people’s backs up,” said Sam Lowe, a trade expert at the Centre for European Reform think-tank. Another person who was involved in the lobbying effort acknowledged: “We weren’t very clever about that.” One year on, the trips across the Channel continue, but the tone has changed. Negotiations on the future relationship between the UK and the EU still have not started in earnest. Yet with few exceptions, no one expects the City to achieve anything like the ambitious partnership it was hoping for. “One of the UK’s only globally competitive sectors is being thrown under a bus,” Conservative MP and former minister Jo Johnson has warned.
15th Apr 2019 - Financial Times
UK economy leans on consumers as Brexit drags on business
Moving slowly in the fog of Brexit and slowing global growth, Britain’s economy is increasingly reliant on consumers and their spending as business investment and exports fade. Bank of England Governor Mark Carney said the world economy was suffering some of the same problems. “Normally when expansions are reliant on the consumer, you start watching the clock, in terms of how much longer it will last,” he said.
15th Apr 2019 - Reuters
This Brexit Delay Is a Bond Market Opportunity
For now, investor demand is hot as the hunt for yield is in full swing. With sterling currency, credit and interest rate markets becalmed then the brief lull in politics makes for a welcoming environment for corporate issuers.
15th Apr 2019 - Bloomberg
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UK car production could halve in no-deal Brexit scenario – study
Car production in Britain could collapse by almost half by the mid-2020s in a no-deal Brexit scenario, with plant closures triggering job losses across the country, according to an Oxford University study. Matthias Holweg, an automotive expert at Oxford, said Britain leaving the EU without a deal and trading on World Trade Organization terms would trigger a big fall in output. According to the study, car production has already slipped by about 9% since the EU referendum in 2016. Production volumes have fallen from more than 1.7m cars per year to less than 1.5m, but could drop further to about 900,000 a year in 2026 if Britain leaves without a deal.
10th Apr 2019 - The Guardian
Investors flee UK stock funds on Brexit worries
Unease over Brexit has sent investors fleeing from UK stock funds for a fourth consecutive week, bringing the total drained from such funds to nearly $25bn since the 2016 vote on leaving the EU. Investors withdrew $304.5m from funds that invest in UK shares for the week ending Wednesday, extending the total for the year past $1bn and to $24.8bn since the vote three years ago, according to EPFR Global data. “The continued uncertainty and a cloudy road map on Brexit and what it will mean for trade relationships and corporate earnings are leading to outflows,” said David Donabedian, chief investment officer from Atlantic Trust. “Investors, both domestic and international, are looking for other places to grow their money.”
11th Apr 2019 - Financial Times
Brexit is like a slow puncture for the UK economy
Business investment has fallen for the past four quarters and the new Brexit date is likely to prolong the uncertainty. Few companies have ceased replacing worn-out capital equipment — for example, van sales were 10.6 per cent up on an annual basis in March — but many sectors are exposed. This is not the time to install a new car production line in Britain or start building a speculative office development.
11th Apr 2019 - Financial Times
IMF's Lagarde says further Brexit delay will 'hinder' UK growth
Further uncertainty over Brexit will hinder growth in the UK economy, the head of IMF has told the BBC. Speaking ahead of the agreement of an extension to Article 50, Christine Lagarde warned that businesses and investors will remain hesitant in the coming months. She said any prolonged uncertainty would have a "negative impact". Ms Lagarde, a former French finance minister, said she hoped a deal could be struck quickly
11th Apr 2019 - BBC
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Brexit stockpiling 'will have sting in the tail for economy' - claim
BDO's Mr Murphy fears this understandable degree of caution could have longer-term consequences. "Businesses have been stockpiling in fear of a hard border, so that if their customers need goods quickly, they'll have them. I can understand why they are doing this, but it is distorting some of the numbers. "If there's not a cataclysmic Brexit - and I don't think there will be - all those goods will have to be traded through. All of a sudden there will be a glut, which will affect prices. "All the indications suggest there won't be a hard border, even if it's a crash out and no deal, and there won't be any checks. "So while stockpiling may be a prudent thing to do, it could cause a sting in the tail."
11th Apr 2019 - Irish Independent
IMF Issues Yet Another Warning Over U.K. Brexit Battle
The International Monetary Fund has produced another gloomy analysis of the dangers posed by a no-deal Brexit as the U.K. continues its attempts to avoid crashing out without an agreement at the end of this week. If Britain leaves without a deal this quarter, gross domestic product could be 1.4 percent lower in the first year when compared with a base-case scenario where an agreement is secured, the IMF said Tuesday. The hit rises to 3.5 percent by 2021, based on the gap between the scenario and current trend growth. A more chaotic exit, with heightened border disruptions and a greater tightening of financial conditions, could have a more severe impact, the study found.
10th Apr 2019 - Bloomberg L.P.
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IMF says no-deal Brexit risks two-year recession for UK
The IMF said there were alternative no-deal scenarios in which the UK would be hit by trade barriers, customs delays, barriers to financial services firms and the loss of preferential access to non-EU countries under trade deals negotiated by Brussels. The impact of these would be enough to cause output to decline in 2019 and 2020. It stressed that “a no-deal Brexit that severely disrupts supply chains and raises trade costs could potentially have large and long-lasting negative impacts on the economies of the United Kingdom and the European Union”.
9th Apr 2019 - The Guardian
Mnuchin Says Hard Brexit a ‘Realistic Outcome,’ Urges Agreement
Treasury Secretary Steve Mnuchin said the U.S. financial system is preparing for the U.K. to crash out of the European Union without a deal, and warned it would cause global disruptions. “We need to be prepared for a hard Brexit as a very realistic outcome,” Mnuchin said Tuesday during a hearing before the House Financial Services Committee, adding that the U.S. has encouraged the U.K. and the union to find a suitable resolution. Yet Britain’s exit from the EU looks set to be delayed by as long as a year in a blow for Theresa May that risks a destabilizing backlash at home.
9th Apr 2019 - Bloomberg
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Brexit - UK loses £6.6 billion a quarter since referendum, S&P says
The United Kingdom has lost £6.6 billion in economic activity every quarter since it voted to leave the European Union, according to S&P Global Ratings, the latest company to estimate the damage from Brexit. In a report published on Thursday, the ratings agency’s senior economist, Boris Glass, said the world’s fifth-biggest economy would have been about 3 percent larger by the end of 2018 if the country had not voted in a June 2016 referendum to leave the EU. Quarterly growth rates would have averaged about 0.7 percent, rather than 0.43 percent, he said.
4th Apr 2019 - Reuters
Britain already £66,000,000,000 poorer because of Brexit
4th Apr 2019 - Metro
Brexit is already undermining the economy—how much worse could it get?
We will be on our own in an increasingly acrimonious world. where being part of a big bloc offers benefits we cannot quantify. Moreover, the act of detaching from the EU was, as we can now see, misunderstood or misrepresented. We should worry for the economic risks, but in the fullness of time, these will pass (after they have made us relatively worse off.) What we cannot allow for is the harm that might be done to our security, and democratic ideals and values—which we will have to work hard to sustain.
4th Apr 2019 - Prospect Magazine
@Channel4News "Upwards of £1 trillion" is being taken out of the UK and transferred to Europe, according to estimates from the UK banking industry
"Upwards of £1 trillion" is being taken out of the UK and transferred to Europe, according to estimates from the UK banking industry. Our Economics Correspondent @HeliaEbrahimi explains how no-deal Brexit preparations are impacting the UK economy.
4th Apr 2019 - @Channel4News
Fearing a No-Deal Brexit, British Companies Hoard Like It’s Wartime
For 46 years, British manufacturers have built their supply chains and export markets around free trade with Europe. On April 12, that could come to an end, rupturing one of the world’s most advanced, cross-border assembly lines. To get ready, British companies are hoarding at rates rarely seen outside of wartime.
4th Apr 2019 - The Wall Street Journal
The value of the customs union to the UK is overrated
Support for a customs union is based on the belief that it makes sense for the UK to have frictionless trade with its biggest trading partner: no tariffs, no quotas, no customs posts, no border checks, unimpeded supply chains. Outside of the customs union, UK firms would have more forms to fill in, more red tape to disentangle. They would be disadvantaged in the way that American, Chinese and Japanese exporters to the EU currently are. No question, the customs union certainly makes it easier for multinational companies to ship parts and semi-finished goods backwards and forwards across the Channel. But the real test of the worth of the current system is whether it has done anything to improve Britain’s trade performance.
4th Apr 2019 - The Guardian
Self-driving cars could provide £62bn boost to UK economy by 2030
Britain’s leading position in developing self-driving cars could produce a £62bn economic boost by 2030, the car industry claimed – but warned that such potential could be jeopardised by a no-deal Brexit. A report published by the Society of Motor Manufacturers and Traders said the UK has significant advantages over other countries in pushing connected and autonomous vehicles, including forward-looking legislation allowing autonomous cars to be insured and driven on a greater proportion of roads than elsewhere. Mike Hawes, the chief executive of the SMMT, said more than £500m had been invested in research and development by industry and government, and another £740m in communications infrastructure to enable autonomous cars to work.
4th Apr 2019 - The Guardian
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Bank of England governor Mark Carney: Risk of no-deal Brexit now 'alarmingly high'
Mark Carney has told Sky News the risk of a no-deal Brexit is now "alarmingly high", branding suggestions such a scenario could be managed as "absolute nonsense".
In an exclusive interview with Sky News, the governor of the Bank of England defended its gloomy forecasts for what a cliff-edge Brexit would mean and denied they amounted to scaremongering. He said the Bank's thinking on the issue - which included predictions of an economic shock - had been demanded by a committee of MPs and involved the work of hundreds of staff, including its economists.
3rd Apr 2019 - Sky News
Brexit: Carney says risk of no deal is 'alarmingly high'
3rd Apr 2019 - BBC
@SkyNews "Forget the fiction… it's absolute nonsense. It needs to be called out." Mark Carney says it's a "myth" that the UK could maintain zero tariffs in a Brexit on WTO rules.
"Forget the fiction… it's absolute nonsense. It needs to be called out." Mark Carney says it's a "myth" that the UK could maintain zero tariffs in a Brexit on WTO rules.
3rd Apr 2019 - @SkyNews
Pound rises on May-Corbyn Brexit talks
The pound rose to $1.3184 this morning after the announcement last night by Prime Minister Theresa May that she would work with Labour leader Jeremy Corbyn over Brexit. The pound, which rose sharply on the news, had fallen as low as $1.2997 in the past week.
3rd Apr 2019 - City A.M.
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Goldman Sees a ‘Big Finish’ for Brexit, Opportunity in the Pound
Instead of a prolonged stalemate or a chaotic no-deal scenario, Zach Pandl said a soft Brexit approach, which may include a permanent customs union packaged with a second referendum, could come within the next day or two. “Sterling is maybe the biggest opportunity among developed market exchange rates today,” Pandl said.
2nd Apr 2019 - Bloomberg
Brexit: NI potato firms 'unable to export to EU' in no-deal
Northern Ireland potato firms will not be able to export to the EU in the event of a no-deal Brexit. Hundreds of tonnes of table potatoes and bulk shipments of chips are sent to the Republic of Ireland every week. But government guidance says trade to EU countries will face restrictions in the absence of an agreement. One of NI's biggest processors Wilson's Country said it had lorries crossing the border six days a week to supply southern supermarkets.
2nd Apr 2019 - BBC
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Brexit costs UK £600m per week, says Goldman study
Brexit has cost the UK around £600m every week since the 2016 referendum, according to a report by Goldman Sachs that highlights the economic impact of the uncertainty surrounding Britain’s exit from the EU. The investment bank said that Brexit has cost Britain about 2.4 per cent of gross domestic product, compared with a hypothetical “Doppelgänger” economy that did not withstand a Brexit shock. Its estimates suggest that the UK economy has underperformed other advanced economies since mid-2016 as a result.
1st Apr 2019 - Financial Times
Top mandarin's bombshell No Deal warning: Food up 10%, police unable to protect public, direct rule in Ulster, worse recession than 2008 says leaked letter
Sir Mark's 14-page letter warns:
a) No Deal would result in a 10 per cent spike in food prices and the collapse of some businesses that trade with the EU;
b) The Government would come under pressure to bail out companies on the brink;
c) It would hamper the ability of the police and security services to keep people safe;
d) It would lead to the reintroduction of direct rule in Northern Ireland for the first time since 2007;
e) A recession will hit the UK and the pound's depreciation will be 'more harmful' than in 2008;
f) Our legal authorities and judicial system would be put under 'enormous pressure'.
2nd Apr 2019 - Daily Mail
Brexit uncertainty has cost Britain £600 million a week - Goldman Sachs
Britain’s chaotic exit from the European Union has cost the economy about 600 million pounds per week since the 2016 referendum, Goldman Sachs said on Monday in a report that underscores how Brexit uncertainty has dented investment. The report found that Brexit had cost the world’s fifth largest economy nearly 2.5 percent of GDP at the end of last year, compared to its growth path prior to the mid-2016 vote on exiting the bloc. It has also lagged other advanced economies.
“Politicians in the UK are still struggling to deliver on that vote,” Goldman Sachs economists wrote in a note to clients.
1st Apr 2019 - Reuters
Brexit is turning Britain into a laughing stock, says Siemens UK boss
The UK chief executive of the German manufacturing group Siemens has said Brexit is making Britain an international “laughing stock”, while urging MPs to pursue a softer withdrawal from the EU. Jürgen Maier said Britain was wrecking its reputation for business stability, putting investment in the country at risk and threatening the economy. A no-deal Brexit would inflict further damage, he said, while urging MPs to reach a consensus and back a customs union with the EU.
Writing an open letter to MPs published by the Politico website, he said: “The world is watching, and where the UK used to be beacon for stability, we are now becoming a laughing stock.
1st Apr 2019 - The Guardian
BMW, Peugeot go ahead with UK plant shutdowns despite Brexit delay
BMW’s Mini plant in Britain closes for four weeks from Monday and Peugeot’s Vauxhall car factory shuts for two weeks in moves planned months ago to help the firms deal with any disruption resulting from Brexit, which has since been delayed.
1st Apr 2019 - The Guardian
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The cost of Brexit to December 2018: Towards relative decline?
The UK economy is 2.5 per cent smaller than it would be if Britain had voted to remain in the European Union. The knock-on hit to the public finances is £19 billion per annum – or £360 million a week. The latest update of the Centre for European Reform’s cost of Brexit calculation, which covers the period from the referendum to the fourth quarter of 2018 shows a slight increase compared to our third quarter estimate, which put the cost at 2.3 per cent.
30th Mar 2019 - Centre for European Reform
Consumers Buoy U.K. Economy as Brexit Hits Business Investment
Consumers helped to keep the U.K. economy growing in the fourth quarter as firms cut investment amid the escalating chaos over Brexit. The Office for National Statistics left its growth estimate at 0.2 percent, a sharp slowdown from an upwardly revised 0.7 percent in the previous three months. The performance would have been worse but for consumers, who are enjoying record employment and the fastest wage growth for a decade. Households spent 0.3 percent more, slightly less than the pace of the third quarter but enough to offset the damage from a fourth consecutive fall in business investment. Strong government spending also contributed to growth.
29th Mar 2019 - Bloomberg
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UK car production levels slump for ninth consecutive month as industry boss warns no-deal Brexit would cause 'serious damage' to the sector
The number of cars built in Britain dropped for the ninth consecutive month in February, new figures show. Around 123,200 cars were built last month, marking a fall of over 15 per cent from the same point a year ago. The Society of Motor Manufacturers and Traders said the continued reduction should be a wake-up call to anyone who believes the industry could survive a no-deal Brexit without 'serious damage.'
28th Mar 2019 - This is Money
Brexit: Business chief's attack on 'irresponsible' MPs - 'you've let us down'
Politicians have "let down" British business with their "irresponsible" handling of Brexit - a top business leader has said. Dr Adam Marshall, director general of the British Chambers of Commerce said Parliament had spent three years "going round in circles". The deadlock had left companies and communities facing "mass disruption" and people were "angry and frustrated" at Westminster. In a speech to the BCC's annual conference in London, he will accuse politicians of focusing on "soundbites not substance" and of "listening without hearing".
28th Mar 2019 - Daily Mirror
A no-deal Brexit would send sterling to its lowest level since 1985
Regardless of what they tell you, traders struggle to explain short-term fluctuations in the value of currencies. Recently, however, the pound has become an exception. Every time it seems more likely that Britain will leave the eu without a deal, sterling falls against the dollar. The strength of this link can be measured statistically, thanks to a helpful proxy for the odds of no-deal. On January 16th a market opened on Betfair Exchange, a betting website, on whether Britain will crash out by March 29th, the original Brexit deadline. Punters have bet £3.9m ($5.1m).
29th Mar 2019 - The Economist
Sterling tumbles as opposition to Brexit deal grows
Sterling fell almost 1% today as concerns grew that British Prime Minister Theresa May's offer to resign failed to convince hardline eurosceptics in her party to back her Brexit withdrawal deal. Boris Johnson, who led the 2016 referendum campaign to leave the European Union, said May's deal - already defeated twice in parliament - is now dead, London's Evening Standard newspaper reported today. Another Conservative Party lawmaker, Mark Francois, denounced May's EU divorce deal as "rancid" and said he would reject it again if parliament voted on it again. The pound tumbled by close to 1% to $1.3061 this evening. Against the euro, it weakened 0.9% to 85.99 pence.
28th Mar 2019 - RTE.ie
Has poverty increased in the UK in the past year, did wages increase and how is Brexit involved?
A report by Cambridge Econometrics published in September 2018 assessed the various impacts Brexit could have on low-income groups in the years up to 2030.
It found that consumer prices will probably rise and wages for low-pay workers will be "depressed". And in the case of a No Deal Brexit, low-income households could see an average £480 increase in the cost of living. In November 2018, a UN poverty expert blasted the UK Government's policies of public spending cuts and austerity ahead of Brexit. Philip Alston said: "The United Kingdom's impending exit from the European Union poses particular risks for people in poverty, but the Government appears to be treating this as an afterthought."
28th Mar 2019 - The Sun
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Retail sales fall as Brexit uncertainty weighs on consumers
UK retail sales fell in March at the fastest rate for more than a year, as Britain’s mounting political crisis over Brexit weighed on consumers’ willingness to spend, according to a survey of major retailers. The latest figures from the Confederation of British Industry, covering high street firms responsible for a third of employment in retailing, showed that retail sales slid in March by the most since October 2017.
The business lobby group’s monthly retail sales index plunged to -18% in March from a level of 0% in February – meaning more retailers reported a slump in sales than reported an increase. City economists had expected a reading of +5%.
27th Mar 2019 - The Guardian
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Brexit to hit Ireland’s economic growth, according to report
ESRI report said: “The persistent uncertainties with respect to the form of the UK’s withdrawal from the EU, “Under the most severe scenario of a disorderly no-deal, domestic real GDP is estimated to rise by just 1.2% in 2019 and 2.4% in 2020.”
26th Mar 2019 - Belfast Telegraph
Brexit would cause 'considerable' damage to Irish economy
26th Mar 2019 - The Guardian
No-deal Brexit will cost 50,000 jobs, say officials
A disorderly Brexit would derail the Irish government’s efforts to post a budget surplus for the first time since the financial crash a decade ago and shave 50,000 jobs off employment growth over five years, a report suggests.The study, carried out by the Department of Finance and the Economic and Social Research Institute, the country’s main think tank, found that if Britain crashed out of the EU Irish GDP growth would be 2.4 per cent lower by the end of 2020. The economy would still grow, but at a much slower pace. Ireland is also projected to post a budget surplus this year for the first time since the economy collapsed in 2008. A disorderly Brexit would lead to a 0.3 per cent deterioration in the finances of the exchequer over the short term and push the budget balance back into the red, the study said.
26th Mar 2019 - The Times
How has Brexit vote affected the UK economy? March verdict
Brexiters might argue the bad news from the European economy is reason enough for Britain to distance itself from the EU as much as possible. Eurozone GDP is on course to expand by just 0.2% for the first quarter, marginally weaker than the UK. Italy is suffering from its fifth recession in two decades, while Germany only just avoided recession at the end of last year, with growth close to zero. However, the EU accounts for almost half of UK exports, while there has been little adjustment to non-EU trade since the Brexit vote. Bad news for the EU is still bad news for Britain.
26th Mar 2019 - The Guardian
Brexit puzzle forces companies to gamble on pound exposure
Given that spread of possibilities, some companies are leaving their exposures unhedged, to the greatest extent possible, hoping that the way in which sterling eventually moves will be to their benefit. “Some companies continue to believe that it will all be fine. But . . . going into Brexit naked is very dangerous,” says Jonathan Pryor, head of FX sales at Investec.
26th Mar 2019 - Financial Times
UK economy remains afloat despite the Brexit shenanigans
Watching Brexit developments from 3,000 miles away in the US has been surreal. Fareed Zakaria, the host of a CNN show, recently wrote in the Washington Post that Britain – “famous for its prudence, propriety and punctuality – is suddenly looking like a banana republic”. I never thought I would read anything like this about the country of my birth. Britain’s international reputation has been trashed.
26th Mar 2019 - The Guardian
Pound sterling rises after Jacob Rees-Mogg makes this Brexit claim
The pound rebounded on Tuesday, supported by comments from Jacob Rees-Mogg indicating that a no-deal Brexit is off the table. In an interview, the chairman of the European Research Group (ERG) said it was difficult to see the UK leaving the EU without a deal, leaving two choices: the Prime Minister's deal or no Brexit.
The pound rose following his comments, before pulling back slightly.
26th Mar 2019 - MSN
Pound regains ground after MPs to vote on alternatives to Brexit
Sterling remains in thrall to the twists and turns of Westminster’s Brexit politics. As the odds on an orderly departure from the EU improve, the pound is rising, as are UK stocks earning revenue at home. The pound turned higher on Tuesday as investors measured the implications of a move by MPs to seize control of the Brexit process, with signals from influential Eurosceptics that they could support Theresa May’s Brexit deal.
27th Mar 2019 - Financial Times
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Brexit is now a national emergency, says CBI’s chief economist
Sentiment and volumes are deteriorating sharply in the financial services sector, with a number of indicators at their lowest since the financial crisis of 2008, according to the latest CBI/PwC Financial Services Survey. The quarterly survey of 84 firms found that optimism about the overall business situation in the financial services sector plunged sharply, falling at the quickest pace since December 2008.
25th Mar 2019 - The Yorkshire Post
Brexit fears set alarm bells ringing for financial services
Sentiment and business volumes in UK financial services deteriorated sharply at the start of 2019 owing to Brexit uncertainty, raising fresh concerns over the crucial but underperforming sector. More than half the financial services businesses surveyed between February and March by the CBI and the consultancy PwC were less optimistic about their overall business situation. The net score of optimistic minus pessimistic dropped to -43 per cent, the lowest reading since 2008. “The alarm bells ringing at the state of optimism in the financial services sector have now reached a deafening level,” said Rain Newton-Smith, chief economist at the CBI.
25th Mar 2019 - Financial Times
The European Union has bigger problems to deal with than Brexit
The eurozone is a half-completed project, lacking the political structure that would give it a chance of working. What’s more, if Europe continues to underperform economically, the alternative to closer integration is disintegration. Not immediately, because returning to national currencies or moving to a hard and soft euro, would be fraught with difficulties. Crunch time will only come when the next recession blows in. It might not be all that far away.
25th Mar 2019 - The Guardian
Banks ramp up plans for ‘hard Brexit’
JPMorgan Chase has sent new EU employment contracts to more than 200 London-based staff in recent days while Royal Bank of Scotland is gearing up to begin serving clients at its new Dutch entity, as banks intensify preparations for a “hard Brexit”. Senior executives at several large international banks said that while a postponement of the UK’s March 29 departure from the EU would be helpful at the margins, they were powering ahead with final preparations to be ready to cope with any eventuality. In JPMorgan’s case, those preparations involved sending new employment contracts to between 200 and 300 staff in the past few days informing them that their employment will switch to new EU entities if a “hard Brexit” occurs, two people familiar with the situation said.
25th Mar 2019 - Financial Times
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Markets seem to underestimate threat of Brexit - ECB's Rehn
The risk of Britain leaving the European Union without a deal is the biggest risk facing the slowing euro zone economy in the short term, Finnish central bank chief Olli Rehn told Germany’s Die Welt newspaper in remarks published on Monday.
“In the short term Brexit is surely the biggest threat,” said Rehn, who sits on the European Central Bank’s rate-setting Governing Council. “Financial markets seem to be too relaxed and appear to underestimate the risk.” He said the ECB had made arrangements with the Bank of England to blunt turbulence in the case of a disorderly Brexit. Asked about the risk of recession in the euro zone, Rehn — who is often mentioned as a potential candidate to succeed ECB President Mario Draghi — said: “Growth has indeed slowed down significantly and we must be worried about the economy.”
25th Mar 2019 - Reuters UK
Brexit or not, Prudential says it made sense to move some business to Luxembourg
U.K.’s largest insurer, Prudential, said it finished transferring some of its operations to Luxembourg about a week ago.
The insurer announced earlier this month that it was transferring 36 billion pounds ($47.58 billion) of assets to Luxembourg, which is intended to be the company’s hub for its European business after Brexit.
23rd Mar 2019 - CNBC
No-Deal Brexit Risk Hangs Over Pound Investors After EU Reprieve
Pound traders face the risk of yet another vote on Theresa May’s Brexit plan next week, with the prospect of no-deal continuing to hang over the currency. Sterling dodged a bullet as the European Union extended the Brexit deadline by two weeks to April 12, or to May 22 if the prime minister’s deal passes Parliament at a third attempt. The last-minute reprieve still doesn’t remove the threat of Britain crashing out of the EU and the pound tumbling for Goldman Sachs Group Inc.
24th Mar 2019 - Bloomberg
Hard Brexit would cost every person in Gloucestershire an extra £732 a year
A hard Brexit will cost every man, woman and child in Gloucestershire £732 a year, according to a new policy paper. The figure is nearly double the amount it will cost people in the county in the event of a 'soft' Brexit, which will cost £413 per person.
24th Mar 2019 - Gloucestershire Live
Countdown to Brexit: three market indicators to watch
These measures recommended to potential investors include watching changes in the yield curve, the wearing off of the effects of a weaker currency than have buoyed share prices for a while and the FTSE volatility index
22nd Mar 2019 - City A.M.
Economic Impact - News from the Brexit Cliff Edge - 22nd Mar 2019View this newsletter in full
Soft or hard, Brexit will cost UK and EU billions of euros: study
Europeans are facing billions of euros in income losses due to Brexit, a study by the German Bertelsmann Stiftung has found. A hard Brexit would hit citizens in both the EU and the United Kingdom particularly hard, resulting in €57.3 billion in income losses every year in the U.K. and €40.4 billion in the EU's remaining 27 member states. Germany alone would see annual income losses of €9.5 billion. France and Italy won't escape unscathed, either: The study expects €8 billion and €6 billion in annual income losses respectively for the two countries, making them the biggest losers after the U.K. and Germany. Yet a soft Brexit would cost Europe dearly too, although considerably less than a hard Brexit. In the U.K., income losses in case of a soft Brexit would amount to €32 billion a year, while the remaining EU countries would incur annual income losses of around €22 billion.
21st Mar 2019 - Politico.eu
Hard Brexit would be costly chaos, says former head of WTO
Britain’s humiliation over its Brexit negotiations has been caused by a fundamental inability to resolve a conflict between the desire to leave Europe politically, but to remain economically, Pascal Lamy, the former head of the World Trade Organization, has said. He also said he did not think it feasible for the UK to leave the EU without an agreement, since it would be so costly.
21st Mar 2019 - The Guardian
Sovereign wealth funds cut UK investment ahead of Brexit
Dealmaking in the UK by some of the largest sovereign wealth funds has plummeted because of the growing uncertainty around Brexit, a report from IE Business School in Madrid has revealed. State-backed funds — including Singapore’s GIC and the Canada Pension Plan Investment Board — invested a total of $21bn in the UK in 2017 compared with only $1.8bn last year, said the report, based on the total assets allocation of 91 funds with $8.1tn of assets under management. There were only eight deals by SWFs in the UK last year, compared with 18 a year before.
21st Mar 2019 - Financial Times
UK retail sales unexpectedly rise even with Brexit looming
British consumers appear to have shrugged off Brexit uncertainty in February as retail sales unexpectedly jumped during the month, according to data published by the Office for National Statistics on Thursday. Volumes bought rose by 0.4 per cent compared with January, much better than the decline of 0.4 per cent expected by City economists. There was little sign that the rise in sales was because of stockpiling ahead of a potentially disorderly Brexit: food sales were the only subcategory to see a drop in sales during the month, which the ONS attributed to the end of the January sales.
21st Mar 2019 - Financial Times
Bank of England says 'nature' of Brexit will guide path for economy
The Bank keeps rates on hold and publishes a survey suggesting 80% of firms are as ready as they can be for a no-deal Brexit.
21st Mar 2019 - Sky News
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£1tn in assets to Brexodus: EY
The finance industry is taking roughly £1 trillion in assets out of the UK as a result of Brexit uncertainty – up by £200 billion from an estimate in January, according to data from EY. That comes as firms are triggering their contingency plans just days before the UK's currently scheduled departure from the EU on March 29. Roughly 7,000 finance jobs are expected to move outside the UK, with Frankfurt, Paris and Dublin the most popular destinations, EY says.
20th Mar 2019 - Linkedin
UK to lose £1tn of financial assets to Europe due to Brexit
20th Mar 2019 - Financial Times
Brexit will cost 7,000 City jobs and £600m tax — nothing, right?
According to the latest survey by consultants EY, financial services groups have triggered contingency plans that will move £1tn of assets, and 7,000 jobs, out of the UK to Europe. Never mind that there are still eight whole days to go before Britain leaves the EU with no withdrawal deal and no agreement on future trade in goods and services.
20th Mar 2019 - Financial Times
UK tariff plan for no-deal Brexit will have limited impact on economy — OBR
Contingency plans published last week, to eliminate most tariffs but impose a 10 per cent duty on imports of cars and some animal products, drew a fierce reaction from industries that would face fiercer international competition and consumer groups that say some prices would rise sharply. However, OBR officials said the overall impact on the economy would be limited, and that the “real world” impact of tariffs would depend on how they were implemented and enforced, and how people changed their behaviour in response. Robert Chote, the OBR chairman, told MPs that the “dominant effect” would come from the tariffs imposed on cars — but added that there might be “quite considerable compliance challenges”. Given different rates for finished and unfinished vehicles, he added, one would need to ask if “all that was needed . . . would be to stick on a wing mirror”. Mr Bean said that tariffs would not necessarily affect domestic prices, because foreign producers might absorb the impact, and that because the plans published last week were quite “tightly targeted”, there might be “more scope to redefine a product so it falls into a different bucket”.
20th Mar 2019 - Financial Times
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Britain's fiscal watchdog compares shock of no-deal Brexit to collapse of Lehman Brothers
Britain's fiscal watchdog has compared the shock of a no-deal Brexit to the collapse of Lehman Brothers that sparked the global financial crisis more than a decade ago. Sir Charlie Bean, a member of the Office for Budget Responsibility (OBR), told MPs it was "almost completely impossible" to accurately predict the shockwaves that would be sent through the economy should the UK crash out of the EU without a deal. He said that, as with the collapse of Lehmans in 2008, the actual havoc wrought by the shock would only become clear as events unfolded.
20th Mar 2019 - Irish Independent
A transatlantic front opens in the Brexit battle over derivatives
European politicians have declared that if LCH wants to clear euros when (or if) Brexit occurs, that business must either move to continental Europe, or be regulated by the European Securities and Markets Authority, the Paris-based entity.
In one sense, that is no surprise. And what has come as a relief for the City — and banks — is that Esma declared last month that it will let London’s clearing houses perform these functions, even after a hard Brexit, as long as they accept Esma rules. However, there is a trillion-dollar catch that sits completely outside the British parliament’s control: the US. The CFTC has told Europe that it will not accept Esma controlling London’s swaps business insofar as it impinges on dollar markets and US banks.
19th Mar 2019 - Financial Times
UK employers defy approach of Brexit with hiring spree
British employers ramped up their hiring at the fastest pace since 2015 in the three months to January as the labour market defied broader Brexit weakness in the overall economy.
19th Mar 2019 - Reuters
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Brexit: EU says UK no-deal tariff plan is ‘illegal’ under WTO rules
The UK government’s no-deal Brexit tariff plan would be “illegal” under World Trade Organisation rules, the EU commissioner in charge of agriculture has said. Phil Hogan characterised the British plan, which would see no duties levied on goods entering Northern Ireland across the border, as “a political stunt, pure and simple”.
“Our initial assessment is that the proposal is illegal. It is not compatible with WTO rules and it’s the start of a process where they’ll have to get approvals,” he told reporters in Dublin.
15th Mar 2019 - The Independent
Brexit or no Brexit, our real problem is failure to invest
The governor of the Bank of England, Mark Carney, who says a no-deal Brexit is not the catastrophe many believed it would be when forecasts were made last year.
In Carney’s considered opinion, the negative economic effects of leaving the European Union without a deal are lower following the considerable efforts of banks and businesses to minimise the impact. However, the referendum vote has already knocked 2% off GDP and, worse, it has hit business investment to the extent that Britain’s capacity to produce hi-tech, 21st-century goods as efficiently as Germany, France, the US and Japan the UK is even weaker than it was 10 years ago. That shortcoming undermines Britain’s ability to grow smoothly and without debilitating side effects well into the next decade, whichever of the central bank’s scenarios you pick.
17th Mar 2019 - The Guardian
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As Brexit stumbles, Salesforce and other tech companies warn of possible fallout
In the past three months, 93 earnings calls of the S&P 500 companies addressed Brexit and its potential impact, according to FactSet. Among those are some of the largest companies, including Facebook, Cisco and Walmart. While most companies were cautious with their answers, sharing very little detail, some companies were more upfront about it. Expedia, for example, said it’s seen a drop-off in U.K flight bookings due to “uncertainty around Brexit.” Booking Holdings, the owner of a group of travel sites including Priceline.com, also said Brexit is creating a “tremendous amount of uncertainty.” Facebook’s CFO David Wehner also said during January’s earnings call that macroeconomic concerns, like Brexit, are a “risk on top of other issues” facing the company.
14th Mar 2019 - CNBC
EU will not match zero tariffs - May's no-deal Brexit plan means hard border in Northern Ireland, warns CBI chief
The UK proposals - announced on Wednesday morning in a bid to "inform" MPs ahead of a no-deal vote in parliament - state there will be no checks and no tariffs imposed on goods moving from the Republic of Ireland across the border into Northern Ireland.
13th Mar 2019 - Belfast Telegraph
It's war: EU will retaliate over British tariffs threat
The EU will fight “fire with fire” by levying tariffs on UK food exports to Europe if Britain enacts draconian new taxes on Irish farm products in a no-deal Brexit. In the event of a disorderly Brexit, the UK will levy beef, lamb, pork, poultry and some dairy imported from the EU, including Ireland. The moves will lead to retaliatory measures by the EU, imposing levies on UK foodstuffs coming into EU markets under its normal ‘third party trade regime’.
14th Mar 2019 - Irish Independent
Pound holds losses after MPs back Brexit delay
Sterling remained lodged in the red on Thursday evening after Britain’s parliament voted in favour of extending the Brexit date past March 29. The currency was down 0.67 per cent at $1.3250, well off the low of $1.3209 that was hit in the London morning. It had rallied as much as 2.4 per cent to a high of $1.3383 during the previous session. The pound only very briefly trimmed its losses after the House of Commons voted to tell the government it should delay the UK’s break from the EU, either until June if Theresa May’s deal is agreed or further into the future if not.
14th Mar 2019 - Financial Times
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Sterling leaps after UK lawmakers vote down no-deal Brexit
Sterling shot higher on Wednesday after British lawmakers voted resoundingly against leaving the European Union in 16 days’ time without a transition agreement. Britain’s parliament voted against the risk of a “no-deal” Brexit, 24 hours after a second defeat for Prime Minister Theresa May’s divorce agreement left Britain heading into the unknown. Lawmakers will vote on Thursday on delaying Britain’s EU departure beyond March 29. The pound strengthened on hopes of a delayed Brexit, a move which investors said could increase May’s chances of getting her deal with the EU through parliament or lead to Brexit being called off altogether if a second referendum is held.
13th Mar 2019 - Reuters
UK Pound Euro Exchange Rate Pops 1.7% Higher As MPs Vote To Avoid No-Deal Brexit Forever
13th Mar 2019 - Exchange Rates.org.uk
Dow Jones up as UK Parliament rejects no-deal Brexit
The Dow Jones is up as the UK Parliament voted 321-278 against the UK leaving the European Union (EU) without a plan in place. This comes just a day after rejecting another Brexit deal from UK Prime Minister, Theresa May.
13th Mar 2019 - ig.com
No-deal Brexit: transport crisis could leave cities short of police
Ministers have voiced concern that already stretched police resources will be diverted from Britain’s cities to help contend with any traffic and transport problems arising in Kent from a no-deal Brexit affecting the Channel ports. The plans form part of Operation Snow Bunting, which aims to coordinate the policing response to Brexit, but Whitehall sources said there was unhappiness in cabinet with the idea of diverting so many officers to the county. “I can’t believe we are planning to take officers off the street at a time knife crime is rising,” one cabinet source said, arguing that the public will start to understand the impact of a no-deal Brexit as the government finally spells out its plans.
13th Mar 2019 - The Guardian
Public services desperately need investment. But Brexit is all-consuming
The underlying causes of this and all the other crises – underfunding, poverty and soaring need – are, inevitably, never addressed in these panicky forays. That nearly nine years of austerity cuts are themselves a turbo-generator of far more costly demand for services – in social care, housing benefit support, mental health services and child protection, to name just a few – is for ministers a truth that must remain universally unacknowledged. That the cuts drive crime, hunger and ill health is even more forcefully ignored.
13th Mar 2019 - The Guardian
UK to remove tariffs, waive Irish border checks in no-deal Brexit
Tariffs would be maintained to protect some industries such as poultry, some dairy products, agriculture, and meat products such as beef and poultry. This would mean that 82% of imports from the EU would be tariff-free, lower than the current 100%. The UK government also said that they will not introduce any new checks or controls, or require customs declarations for any goods moving from across the border from Ireland to Northern Ireland in the event of a no-deal Brexit.
13th Mar 2019 - ig.com
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Plans for Irish border in event of no-deal Brexit to be published
Plans for the Irish border in the event of a no-deal Brexit are set to be published.
Speaking after her Withdrawal Deal was defeated in a House of Commons vote, Theresa May said her Government will publish its plans for a no-deal Brexit on Wednesday. The Prime Minister said these will include its approach to tariffs and the Northern Ireland border among other matters, if the United Kingdom leave the European Union without a deal on March 29.
12th Mar 2019 - AOL.co.uk
Brexit: No-deal border plans to be published
12th Mar 2019 - The News Letter
MPs urged to avoid no-deal Brexit 'own goal'
The City UK, the finance industry body, said leaving without a deal "would be an own goal of historic proportions". The government is set to publish more details of its no-deal plans on Wednesday, including trade tariffs and Irish border proposals.
CBI director-general Carolyn Fairbairn said the extension of the Brexit process "should be as short as realistically possible and backed by a clear plan". "It's time for Parliament to stop this circus," she added. Stephen Phipson, chief executive of manufacturers' group Make UK, said: "It is now essential that Parliament brings the curtain down on this farce and removes the risk of no deal. "That outcome would be disastrous for the UK manufacturing, jeopardising many thousands of jobs in every constituency in the land."
13th Mar 2019 - BBC
Business leaders call for new approach to Brexit
Business leaders on Tuesday night called for a “new approach” to Brexit as Theresa May’s Brexit deal fell to its second major defeat in the House of Commons.
“Enough is enough,” said Carolyn Fairbairn, director-general of the Confederation of British Industry. Referring to Tuesday’s tumultuous parliamentary debate on the prime minister’s Brexit deal as another day of “failed politics”, she demanded a different course from the government, warning that “jobs and livelihoods depend on it”
12th Mar 2019 - Financial Times
UK avoids 'Brexit black hole' in January, but economy still sluggish - as it happened
The UK economy expanded at a faster-than-expected pace in January, supported by growth in all main sectors such as manufacturing, services and constructions, preliminary figures from the Office for National Statistics showed on Tuesday. Gross domestic product grew 0.5 percent month-on-month in January after a 0.40 percent decline in December. Economists had expected a 0.20 percent increase. In November, GDP grew 0.2 percent monthly.
12th Mar 2019 - Business Insider
No-deal Brexit will cause fresh food shortages, price hikes and border delays, government believes
Fresh food will run out, prices will rise and UK travellers will face border delays after a no-deal Brexit, civil servants are predicting. Whitehall’s “reasonable worst case scenario” for crashing out of the EU is revealed by a government watchdog – one day before a promised Commons vote on ruling out the prospect. The National Audit Office also reveals that £1.5bn is being spent by government on “urgent civil contingencies funding” in this financial year alone. The projections are made as part of Operation Yellowhammer, the emergency planning project first disclosed when Philip Hammond was photographed with a secret Treasury document last autumn.
12th Mar 2019 - The Independent
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‘Disorderly Brexit’ and trade spats would hit oil demand IEA warns
A “disorderly Brexit” could hit crude oil demand, the International Energy Agency said, marking the first warning from the body about how the UK’s exit from the EU could reverberate across global energy markets. Consumption of oil depends on the strength of the world economy and the IEA said uncertainty stemming from trade spats as well as concerns about an ill managed Brexit were major factors dictating consumption patterns. “Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of international trade and oil demand,” the Paris-based intergovernmental organisation said on Monday.
11th Mar 2019 - Financial Times
Low business investment set to persist, says BoE
Companies’ capital spending fell for four successive quarters last year, the longest period of decline outside of a recession since 2003. Bank of England's Mr Haskel said that, whatever the final trade deal between the UK and the EU, business investment was likely to be lower with the BoE forecasting that every form of Brexit will lead to lower economic growth. “The longer-term question is whether [business] investment will eventually bounce back after [Brexit] uncertainty is resolved . . . At least for the next few years the prospect of low investment seems possible,” he said in a speech at Birmingham university.
11th Mar 2019 - Financial Times
FCA to run no-deal Brexit 'financial war room'
The Financial Conduct Authority has plans in place for a financial war room to take action in the event of a no-deal Brexit. The war room will keep a close eye on the IT changes that will be required over the weekend following 29 March. It is understood that the regulator will keep in close contact with leading City firms to watch for potential disruption in the financial markets. The FCA will also liaise closely with Whitehall and Threadneedle Street.
11th Mar 2019 - BBC
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BOE tells some UK lenders to triple amount of liquid assets before Brexit - FT
The Bank of England has told some UK lenders to triple the amount of easy-to-sell assets they hold to help them weather any no-deal Brexit crisis, the Financial Times reported on Sunday, citing people familiar with the situation. The BOE has told some lenders to hold enough liquid assets to be able to cope with stress of 100 days, instead of the regular 30 days that BOE’s Prudential Regulation Authority rules demand, the FT reported. A Bank of England spokeswoman said the central bank had no immediate comment.
10th Mar 2019 - Reuters
Brexit: Belgium tells companies to halt exports to UK after March 29
Belgium’s customs authority is advising companies that export to the UK to halt shipments after Brexit day to avoid customs chaos in the event of a no-deal scenario. Kristian Vanderwaeren, chief executive of Belgian customs, called for a “Brexitpauze” after 29 March and said firms should do as much of their exporting as they can before new controls have to come in. “Who are we as customs to give the business world instructions? But we are still asking the SMEs and all other parties to wait. Do the necessary export to your customers before 29 March,” he told Belgian business newspaper De Tijd.
9th Mar 2019 - The Independent
Trading slips away from London ahead of Brexit
Few expect London to lose its position as Europe’s biggest financial hub, but Britain’s departure from the EU is turning into a multibillion-euro boost for the bloc’s protracted efforts to build a deeper capital market to rival the UK capital.
8th Mar 2019 - Reuters UK
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Unemployment would rise after no-deal Brexit, top economist warns
A no-deal Brexit would be a “sharp shock”, increase unemployment and could shrink the Scottish economy by 7%, Scotland’s top economist warned MSPs. With just three weeks until the UK is due to leave the EU, the Scottish Government’s chief economic adviser said that they would not be able to mitigate all the damage caused by a no-deal Brexit. Giving evidence about his report into the economic impact if the UK leaves without an agreement in place, Dr Gary Gillespie told MSPs the Scottish economy would be between 2.5% and 7% lower compared with remaining. He said: “Despite the best government mitigation, a no-deal would impact a short, sharp shock to the economy.
7th Mar 2019 - Yahoo!
'Brexit stalemate means growing damage today and weaker economy tomorrow'
Less than one month before the UK is set to leave the European Union, CBI affiliated firms believe: The recent uncertainty around Brexit has negatively affected sales (weighted balance of -58%) and UK investment (-43%) - Costs have increased significantly (+59%) as a result of Brexit uncertainty - Stockpiling of goods is an everyday business reality (+43%) with ‘no deal’ still on the table
7th Mar 2019 - Confederation of British Industry
Subsidy for wages can protect jobs, say Bank researchers
Temporary wage subsidies to stop companies laying off staff in a recession are an effective tool against joblessness, Bank of England researchers have said in analysis that might feed into the policy response to a no-deal Brexit. On its Bank Underground blog, the Bank published a study of “short-time work” (STW) schemes, which are used in other European countries to stabilise the economy in a shock. The researchers found that “the presence of STW schemes can reduce the fall in employment brought on by a recession”.
7th Mar 2019 - The Times
Brexit vote brought UK feelgood factor to abrupt halt, says ONS
It’s official: life in Britain was getting better before the Brexit vote. In the years up to 2016 people in the UK were on average feeling better about their lives, enjoying the data also captures a sense of buyer’s regret about Brexit. Between 2016 and 2018 the increase in the number of people believing that it was a good thing for EU citizens to have the right to work in the UK was higher than any other EU state – up by 11 percentage points. Then comes 2018, the proportion of people in the UK disagreeing that the country faced a better future outside the EU increased by six percentage points from spring 2016 to spring 2018. The ONS data reflects a sense of buyer’s regret about Brexit.
7th Mar 2019 - The Guardian
It's a complete myth that a no-deal Brexit would cripple the British economy
Like most Leave voters, my position has hardened. I still don’t relish the idea of leaving without a deal, but I’m now, for the first time, reconciled to doing so. As matters stand, a so-called no-deal (in reality, we’ve already agreed lots of mini-deals) would be our least bad option. It wouldn’t be pretty, especially for one or two industries, but would probably cost just 1-2 per cent of GDP.
7th Mar 2019 - The Telegraph
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OECD warns no-deal Brexit could plunge UK into recession
The OECD has slashed its growth forecasts for the UK and warned that a no-deal Brexit could plunge the economy into recession. It now predicts that Britain will see GDP increase by just 0.8% this year even with a deal - and that without one the outlook will be "significantly weaker". The economic think-tank said the increase in tariffs resulting from a no-deal outcome and move to WTO trade terms would take 2% off GDP over the next two years. It also pointed to the risks of supply chain bottlenecks, declining business confidence and financial market disruption - which could add to the adverse effects on the economy already seen since the 2016 EU referendum.
6th Mar 2019 - Sky News
No-deal Brexit could cause sharp unemployment hike – NI civil service chief
A no-deal Brexit could cause a sharp rise in unemployment in Northern Ireland, the head of the civil service said. Inability to prepare, EU tariffs and significant changes to exports could cause business distress, failure or the relocation of some companies to the Republic, a report from David Sterling said.
5th Mar 2019 - Belfast Telegraph
European Central Bank comes to UK's aid as crisis-era swap lines activated
The Bank of England has announced it will activate crisis-era emergency swap lines with the European Central Bank (ECB) to keep foreign exchange markets functioning throughout the Brexit period. The Bank said it was taking the action to ensure that banks do not run short of cash if there is a no-deal Brexit. The move, predicted in a Sky News report last year, underlines that even in the event of a hard Brexit, in which the UK abruptly severs its ties with the European Union, the UK would remain reliant on liquidity and support from Frankfurt.
6th Mar 2019 - Sky News
Sterling to slide to $1.20 if no Brexit deal agreed - Reuters poll
Sterling would lose around 9 percent of its current value against the dollar and trade at $1.20 in the immediate aftermath of Britain leaving the EU without a deal, a Reuters poll of foreign exchange strategists predicted.
7th Mar 2019 - Reuters
ECB cut UK interest rates by pumping €300bn into Britain
Europe’s money-printing programme pumped hundreds of billions of pounds into the UK, the central bank for central banks has found, pushing down interest rates even further in Britain. Quantitative easing (QE) pushes down long-term interest rates in an effort to stimulate economic growth.
But because this was happening on a grand scale just across the Channel from Britain’s major financial centre, as much as €300bn of the European Central Bank’s QE ended up buying assets from institutions in the UK in the scheme's first three years.
6th Mar 2019 - The Telegraph
How Brexit has hit the value of UK firms
In a wide ranging look at Brexit and its relationship to the business decisions being taken the authors say: "according to a recent survey by the Institute of Directors, 29% of UK companies have relocated, or plan to relocate some operations abroad due to Brexit uncertainty"
5th Mar 2019 - LSE Blogs
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UK economy flat-lines as Brexit nears, firms cut jobs - PMI
Britain’s economy risks stalling or contracting as Brexit nears and a global slowdown worsens, with firms in the dominant services sector reporting job cuts for the first time in six years and falling new orders.
5th Mar 2019 - Reuters UK
EU banks could face panicky trading after no-deal Brexit
The Bank of England has said that the failure of EU regulators to put in place measures to protect continental banks increased the risk of panicky trading on financial markets in the aftermath of a no-deal Brexit. Without further guidance to EU banks and insurers and greater urgency to put in place rules before the 29 March article 50 deadline, traders on international money markets could raise the costs of lending to the banking sector. This could intensify the impact of Britain crashing out of the EU, the Bank said.
5th Mar 2019 - The Guardian
Brexit won’t bother the City – but everyone else should worry
No manufacturer would begrudge the Bank of England’s efforts to save us from another 2008-style credit crunch. Threadneedle Street is merely doing its job and everybody knows it started with the advantage that the EU needs access to London’s banks. But the outcome is a comfort blanket for the City – London is on its way to becoming a “free port”, Simon Jenkins argued in this paper last week – and next to nothing for the rest of the economy.
5th Mar 2019 - The Guardian
Things Are Looking Up for the Pound, Strategists Say
There is now just a 9 percent chance that the U.K. will leave the European Union at the end of March without an agreement, according to a Bloomberg survey of banks. Much more likely is that Britain’s exit will be delayed or even that Prime Minister Theresa May’s beleaguered deal will get through Parliament, both of which are seen pushing the pound higher.
5th Mar 2019 - Bloomberg
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UK factories slash jobs, stockpile at record pace before Brexit: PMI
British factories are cutting jobs and bracing for Brexit by stockpiling goods at a record pace, but consumers seem less worried, suggesting their spending might help to shore up the economy, data showed on Friday. A measure of manufacturing - the IHS Markit/CIPS Purchasing Managers’ Index - hit a four-month low in February, and the fall would have been worse if factories had not rushed to build up inventories to see them through any Brexit border chaos.
1st Mar 2019 - Reuters
Factories stockpile at record rates as they brace for Brexit, an industry indicator shows
The IHS Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI), shows UK manufacturers are stockpiling at the fastest pace seen in any leading economy since data started to be collated
1st Mar 2019 - Sky News
UK firms report weakest growth since April 2013: CBI
British businesses reported their weakest growth in nearly six years during the past three months due to fears of a no-deal Brexit and rising global trade barriers, the Confederation of British Industry said on Sunday. The CBI’s index of private-sector activity over the past three months dropped to -3 in February from zero in January.
This was its lowest since April 2013, when Britain was still recovering from the global financial crisis. Firms expected similar weakness in the three months ahead, when Britain is due to leave the European Union after over 40 years of membership.
3rd Mar 2019 - Reuters UK
Attitudes to Brexit and economy quizzed in poll for BBC Wales
More than half of Welsh voters now think Brexit will have a negative impact on the economy, the annual St David's Day poll for BBC Wales suggests. Of 1,001 adults polled, 56% thought it would have a negative impact on the Welsh economy - more than last year. Meanwhile 51% thought it would impact negatively on the general way of life in Wales, also up on 2018.
1st Mar 2019 - BBC
Brexit 2019: mortgage and house price predictions – Which? News
Brexit could have a big impact on house prices and mortgages. WHICH outlines a range of experts and their predict as to what will happen to the market over coming months.
1st Mar 2019 - Which?
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Theresa May hit by migrant target farce as record numbers of Europeans leave UK
Theresa May's immigration policy was engulfed in fresh criticism today as figures revealed a slump in EU workers coming to Britain — and a surge in arrivals from outside Europe. The Office for National Statistics said that an outflow of Eastern Europeans means that net migration from Europe has fallen to its lowest level in a decade. But at the same time the numbers coming to the UK from the rest of the world has soared to 261,000 — more than double the Prime Minister’s target of cutting net migration to below 100,000.
28th Feb 2019 - Evening Standard
UK migration: Rise in net migration from outside EU
Net migration to the UK from countries outside the European Union has hit its highest level for 15 years, the Office for National Statistics says. Figures show 261,000 more non-EU citizens came to the UK than left in the year ending September 2018 - the highest since 2004. In contrast, net migration from EU countries has continued to fall to a level last seen in 2009. The figures are the last set before the UK is due to leave the EU next month. And separate figures released by the Home Office show the number of EU nationals applying for British citizenship hit an all-time high last year, rising by 23% to about 48,000.
28th Feb 2019 - BBC
Brexit Uncertainty Has Hurt Our Economy – Extending Article 50 Could Hurt It Even More
Extending the Brexit process will lift uncertainty in Westminster, but will do little to reassure businesses and consumers there is light at the end of the tunnel. Both consumers and businesses are paying the Brexit price. This is because, in the presence of ongoing economic policy uncertainty, the sterling exchange rate takes a hit as foreign investors become less willing to trust, and therefore invest, in the UK economy.
28th Feb 2019 - Huffington Post
UK business confidence slides to lowest since month of Brexit referendum - Lloyds
British business confidence slid in February to its lowest level since June 2016, the month of the Brexit vote, a survey showed on Thursday, adding to other signs that Brexit uncertainty is hurting companies. Business confidence fell by 15 points to 4 percent in February, according to the Lloyds Bank Business Barometer. The services sector, which accounts for the bulk of British economic output, accounted for the biggest fall in morale.
28th Feb 2019 - Reuters
Air Malta's Italian routes 'pulled' from Southend Airport
There are now no options on Air Malta’s website to book any flights from Southend to Catania and Cagliari on any date.Travellers believe they are cancelling the flights six weeks before departure date and not giving passengers any options to book them.
28th Feb 2019 - Echo News
Migration to UK climbs as more workers and students come from beyond Europe
The net migration of EU nationals to the UK has fallen 70 per cent since the 2016 vote to leave the bloc, but arrivals from outside Europe have increased markedly, in an indication of Brexit’s impact on flows of people to the country. Figures released by the Office for National Statistics on Thursday show the net migration of EU nationals fell to 57,000 in the year to September 2018, the lowest level in a decade. This compares with a net inflow of 189,000 EU nationals in the year to June 2016, when the Brexit referendum was held. The change is even more stark for those people who come from the eight central and eastern European member states that joined the EU in 2004 — countries such as Poland. The number of people from such countries who are leaving the UK now outstrips those arriving. Overall, National Insurance number allocations to EU nationals fell by a third to 419,000 between 2016 and 2018.
28th Feb 2019 - Financial Times
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BMW says piecemeal Brexit delays 'not good' for its four UK plants
BMW has said piecemeal delays to Brexit “would not be good” for the carmaker, spelling more uncertainty for its four UK plants. Andreas Wendt, a BMW board member and purchasing chief, said in an interview with the German industry journal Automobilwoche that a stop-start approach would add unwelcome disruption to its manufacturing in Britain. “A start date [for Brexit] delayed a little at a time would not be a good scenario for us,” he said.
26th Feb 2019 - The Guardian
UK consumer morale edges up from five-year low as Brexit uncertainty persists
British households are showing “amazing” stoicism as the country heads for Brexit, a market research company said on Thursday as its measure of consumer confidence edged up in February. The GfK consumer confidence index rose to -13 from -14 in January. Economists taking part in a Reuters poll had expected a slight fall to -15.
28th Feb 2019 - Reuters
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UK growth 'guaranteed' to fall in no-deal Brexit, Mark Carney warns MPs
UK growth is “guaranteed” to fall in the event of a no-deal Brexit, the Bank of England’s governor Mark Carney has told MPs. The Bank slashed its UK growth forecast for 2019 to 1.2 per cent earlier this month - down from the 1.7 per cent forecast in November - even on the assumption of a Brexit deal and smooth transition.
26th Feb 2019 - City A.M.
@PickardJE "UK economy would be 6.3-9% smaller in the long term in a no deal scenario (after around 15 years) than it otherwise would have been when compared with today’s arrangement
Dexeu has published No-Deal analysis "UK economy would be 6.3-9% smaller in the long term in a no deal scenario (after around 15 years) than it otherwise would have been when compared with today’s arrangements, assuming no action is taken"
26th Feb 2019 - @PickardJE
How has Brexit vote affected the UK economy? February verdict
While the gloomiest of economic forecasts made ahead of the EU referendum in 2016 might not have come to pass, increasing evidence has emerged of the gradual damage the vote unleashed for the economy. This month, a member of the Bank of England’s monetary policy committee, Gertjan Vlieghe, put the cost at £40bn a year of lost GDP growth compared to a vote to remain two-and-a-half years ago. That’s about £800m a week, he said, which is more than double what the leave campaign claimed could be saved on EU membership fees and instead spent on the NHS.
26th Feb 2019 - The Guardian
Pound rises amid Brexit delay speculation
The pound has hit a 21-month high against the euro, following increased speculation about a delay to Brexit. Prime Minister Theresa May said in the Commons that if no deal was agreed and if a no-deal exit was rejected, then there could be a short extension to the date for Britain to leave the EU. At one point, sterling hit €1.1643, its highest level since May 2017. However, Mrs May's concession was not as wide-ranging as investors had hoped, causing sterling to dip again.
26th Feb 2019 - BBC
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@CBITweets says "No deal will damage every region and nation of the UK"
No deal will damage every region and nation of the UK
25th Feb 2019 - @CBITweets
No-deal Brexit risks 'full-blown economic crisis'
The risk of a no-deal Brexit is turning into a "full-blown economic crisis", the aerospace trade body has warned. ADS Group said it was now able to track "the very real economic damage being caused" by the continuing uncertainty over the UK's exit from the EU. Its warning comes as insurance trade body, the ABI, said a no-deal Brexit "would be a be an unforgivable act of economic and social self-harm".
The UK is due to leave the EU on 29 March, but no deal is yet in place.
26th Feb 2019 - BBC
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The Japanese aren’t daft – that’s why they’re getting out of Brexit Britain
A new Japanese consensus has formed. The Conservative party and its leaders cannot be trusted. They ignore warnings, break their word and do not understand business – personified by Old Etonians Boris Johnson and Jacob Rees-Mogg. Brexit is a first-order disaster, striking at the heart of how Japanese companies organise themselves as “lean manufacturers”. As Honda’s Patrick Keating, its European government affairs manager, briefed a meeting in Swindon in September, Brexit is likely to interrupt the just-in-time delivery of 2 million parts a day – a fifth of which come from EU suppliers. Those suppliers would have to fill out 60,000 customs declaration forms a year, he warned. One in five of its UK workforce are EU nationals. The world of tariff-free barriers – access to the EU’s free-trade agreements with other countries, and ability to move staff between countries promised by Thatcher – has evaporated in front of Honda’s eyes.
24th Feb 2019 - The Guardian
Honda, Brexit and the collapse of Japan's love affair with the UK
24th Feb 2019 - Wired UK
The City may thrive despite Brexit, but the rest of us won’t
The real gap that Brexit will widen yet further is not just between financial services and trade in food and manufactures. It is between London and the rest of the country. Already the Treasury’s staggering £4.2bn “for Brexit preparations” is tipping jobs into the capital. The greatest irony is that London and the south-east of England, which voted overwhelmingly for remain, will emerge from a hard Brexit richer than ever. It is the provinces that voted leave that will suffer. Manufacturing will slide towards recession, while Londoners smile all the way to the bank – a bank for which Brexit will not exist.
22nd Feb 2019 - The Guardian
UK economy £100bn smaller because of austerity – thinktank
Austerity policies from the Treasury have resulted in slower growth in every year since 2010 and left each household £300 a month worse off as a result, a thinktank has said. The New Economics Foundation said its analysis of the impact of tax and spending changes since the Conservatives came to power, first as part of a coalition with the Liberal Democrats, had left the economy £100bn smaller than it would otherwise have been.
21st Feb 2019 - The Guardian
Clear of Brexit's teething troubles, 2020 could be a boom year for the UK
The adverse effects of Brexit will be front-loaded and the benefits back-loaded. It is difficult to find even the most devoted of Brexiteers arguing that things will start to improve immediately after Brexit. So this issue has something of the characteristic of an investment decision: immediate costs in order to secure long-term benefits.
24th Feb 2019 - The Telegraph
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Fitch puts UK credit rating on negative watch
The UK faces a credit rating downgrade because of the mounting risk that it will leave the EU without a transition deal, according to a leading rating agency. Fitch has put the UK’s double A credit rating on negative watch over the growing uncertainty over Brexit, a move that signals the increasing likelihood of a downgrade. There is “heightened uncertainty” over the outcome of the Brexit process, Fitch said, and an “increased risk of a disruptive no-deal Brexit” that the agency believes “would lead to substantial disruption to UK economic and trade prospects”.
21st Feb 2019 - Financial Times
Fitch may cut UK's 'AA' rating on Brexit uncertainty
21st Feb 2019 - Reuters UK
UK and Ireland retailers warn of 40% tariffs on food in no-deal Brexit
A no-deal Brexit could lead to tariffs of 40% or more being imposed on food such as beef and cheddar cheese, driving up prices in shops and squeezing household budgets across the UK and Ireland, retail organisations from both countries have warned. With mounting fears that the UK could leave the European Union without an agreement in 36 days’ time, the British Retail Consortium (BRC), Northern Ireland Retail Consortium (NIRC) and Retail Ireland, issued a joint warning that this outcome could lead to delays at borders and shortages of fresh meat, fish, fruit and vegetables.
21st Feb 2019 - The Guardian
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No deal Brexit ‘could force Scotland into recession this year’
A no-deal Brexit could force the Scottish economy into recession this year, cut GDP by 7 per cent and lead to a surge in unemployment, an official report will warn on Thursday. The value of the pound could also fall by 30 per cent if the UK leaves the EU without a deal on 29 March, the document by the Scottish Government‘s chief economic adviser says. “Collectively, the above pressures have the potential to push the Scottish economy into recession during 2019″ Dr Gary Gillespie Dr Gary Gillespie’s report, which models two possible no-deal scenarios, also predicts that disruption to trade could hit Scottish exports by up to 20 per cent. The report warns that business investment in Scotland could fall by £1bn by the end of 2019, with net migration into the country likely to slow significantly and possibly go into reverse. The unemployment rate is also forecast to rise from the current level of 4 per cent to between 5.5 per cent and 8 per cent, the equivalent of up to 100,000 people being made jobless
21st Feb 2019 - iNews
No-deal Brexit risks recession in Scotland, economic report warns
21st Feb 2019 - Shropshire Star
No-deal Brexit may cut Scottish GDP up to 7 percent - Scotland's chief economist
21st Feb 2019 - Reuters
Brexit risks making North Sea oil ‘less attractive’ to buyers
North Sea oil risks becoming less attractive to foreign buyers if the UK Government fails to secure key trade deals before Brexit, a leading energy business has warned. SK Innovation claimed that Theresa May’s plans risked creating import tariffs, which would reduce the attractiveness of North Sea oil for the global market.
21st Feb 2019 - The Scotsman
CBI pushing hard for UK and EU to find Brexit compromise
Anna Leach, CBI head of economic intelligence, said: “UK manufacturing activity has moderated at the same time as headwinds from Brexit uncertainty and a weaker global trading environment have grown. “The time for Brexit compromise to support the UK manufacturing industry is now. The clock is ticking quickly towards crisis point. It is of critical importance that politicians of all stripes and on both sides of the channel come to agreement on the terms of a Brexit deal as soon as possible, to allow our manufacturers to continue to create, make and trade their goods with certainty.”
21st Feb 2019 - The Guardian
Retailers sound no-deal Brexit warning bell
The leading retail bodies in the UK and Ireland have issued a stark warning on how a no-deal Brexit will affect shoppers. Aodhán Connolly, director of the Northern Ireland Retail Consortium; Thomas Burke, director of Retail Ireland; and William Bain, head of EU and international at the British Retail Consortium, have said a no-deal Brexit will squeeze household budgets across Ireland and the UK, and lead to reduced availability of some goods. The retail organisations highlighted how increased tariffs and new regulatory checks would lead to increases in the cost of making goods available to consumers, as well as the cost implications of non-tariff barriers such as checks and delays.
21st Feb 2019 - Drapers
Retailers in Ireland and UK issue stark no-deal Brexit warning
20th Feb 2019 - The Argus
Ireland alarmed by UK’s food tariff plans in no-deal Brexit
Ireland has responded with alarm to UK plans for tariffs and quotas on agri-food imports in a no-deal Brexit, as worries grow about the potentially grave impact on the country’s annual €4.5bn food and drink sales to Britain. Leo Varadkar’s government is facing demands to seek emergency aid from Brussels after Michael Gove, UK environment secretary, said reports that Britain would operate a zero-tariff regime in a no-deal were “not accurate”.
20th Feb 2019 - Financial Times
Politicians must stand up for the City of London after Brexit
For financial services, in which the UK has a large surplus, this is bleak, with the Centre for European Reform, a think-tank, reckoning that a free trade agreement would shrink exports to the EU by almost 60 per cent. This means job losses among the 2.2m people employed in the financial and professional services ecosystem, of whom a number live in my constituency of Orpington, and an annual £10bn hit to tax revenues, according to consultants Oliver Wyman.
20th Feb 2019 - Financial Times
Why Pound Traders Should Stop Obsessing Over Brexit Day
Investors in the pound may be ignoring the here and now by being too fixated on the March 29 exit deadline from the European Union. While they are rushing to buy options that help guard against wide swings in the currency around the departure date, they are scarcely prepared for volatility before the end of the first quarter. That means they are at risk of having to pay more for protection later or take a hit on profits, should any early political developments fuel outsized sterling fluctuations.
20th Feb 2019 - Bloomberg
Lloyds bullish over Brexit as £4bn payout to investors unveiled
Lloyds Banking Group has shrugged off growing fears over Brexit as it unveiled a £4bn payout to shareholders, despite reporting smaller-than-expected annual profits. Britain’s biggest high street bank, which operates one out of five of the country’s branches, reported a 24% rise in net profits to £4.4bn for 2018, below the £4.6bn forecast by analysts. Statutory profit before tax was up 13% to £6bn.
20th Feb 2019 - The Guardian
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Brexit Britain will be 'huge tax haven in middle of Europe' - 'UK will prosper
Economists Marc Friedrich and Matthiaas Welk believe the UK will become a tax haven “soon” after Brexit if the country leaves the EU without a deal. Speaking to Focus in Germany, the experts said: “In the case of a hard Brexit, we expect to soon have the largest tax haven in the middle of Europe - Britain.
“The International Monetary Fund expects growth losses of four percentage points in five years for the UK economy. “In the short term, foreign trade will get into a pickle. “The pound will depreciate significantly again and inflation will rise. “Yields on British government bonds will also rise, with consequences for the state budget. The stock markets will significantly lower downwards.
19th Feb 2019 - Express.co.uk
UK labour market bucks growth slowdown and Brexit fears
There were 167,000 more people in employment during the final quarter of 2018 than over the previous three-month period, the UK’s Office for National Statistics reported on Tuesday. The employment rate remained stable at a record high of 75.8 per cent. The data suggest that Britain’s jobs market has so far been insulated from the effects of uncertainty over the outcome of the Brexit negotiations — even as overall economic growth last year fell to its lowest level since 2012 because of a drop in business investment.
19th Feb 2019 - Financial Times
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Brexit donor Odey renews sterling 'short' position, does not see hard Brexit
British hedge fund manager and Brexit supporter Crispin Odey said on Monday he was again positioning for sterling to weaken, calling the currency "mortally damaged". "The market is basically believing we won't have a hard Brexit and I think they're probably right....The truth is there will either be a delay or (Prime Minister Theresa May) will get her way," Odey told Reuters,
18th Feb 2019 - Yahoo!
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Europe could face ‘recession’ if EU rejects UK Brexit demands warns Liam Fox
Brexiter Liam Fox makes the extraordinary claim that rejecting UK Brexit demands could potentially lead to a recession across the continent, after Italy’s economy shrank last year.
17th Feb 2019 - Express.co.uk
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Brexit has wiped £40 billion from Britain's annual economic growth since referendum, top Bank of England official reveals
Brexit has already wiped £40 billion off Britain’s annual economic growth since the 2016 referendum, a top Bank of England official revealed today. Gertjan Vlieghe said it amounted to £800 million per week of “lost income for the country” -- more than twice as much as the £350 million a week that the Vote Leave campaign claimed could be “saved” by quitting the European Union.
15th Feb 2019 - Evening Standard
Who’s the biggest failure in the Brexit cabinet: Chris Grayling – or Liam Fox?
ow badly do you have to mess up, these days, before you’re not allowed in Theresa May’s cabinet? Just how far does tolerance stretch? You might imagine Chris Grayling to be the ultimate prototype in this real-world experiment, with his granting then cancelling of a £13.8m ferry contract to a ferry company with no ferries, but let us also observe the progress of Liam Fox. Fox is one of the most vocal and optimistic Brexiteers in politics. In 2016, he declared that a trade deal with the EU would be “one of the easiest in human history”. In 2017, he promised to “replicate the 40 EU free trade agreements that exist before we leave the European Union so we’ve got no disruption of trade”, and they would be ready “one second after midnight in March 2019”.
14th Feb 2019 - The Guardian
Phew, the Bank would deploy common sense on no-deal Brexit
A no-deal Brexit, in economic terms, would be a trip into the unknown and would very likely involve a severe shock. Even the sober sub-set of Brexit promoters concedes the latter short-term point. But at least one likely outcome is becoming clearer: the Bank of England would not make things worse by cranking up interest rates.
15th Feb 2019 - The Guardian
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Brexit threatens surge in market abuse, financial watchdog warns
Brexit presents its own threat to market cleanliness because City corporates may fail to “knit back together” their oversight after Britain’s departure, Julia Hoggett, the FCA’s director of market oversight, said in a speech on Wednesday. Companies have had to set up EU hubs to retain access to the bloc because Brexit will result in the loss of so-called passporting, which allows them to be based in one country and sell services seamlessly across the EU without separate regulatory permission or ringfenced capital.
14th Feb 2019 - Financial Times
Brexit Set To Break the GBP
Neil Wilson Chief Market Analyst from Markets.com and this is what he is predicting “You have to assume that a no-deal Brexit is very much in play and therefore there are severe downside risks to GBPUSD should that occur. I’d anticipate a very severe shock in the FX markets even from where the pound is now. Sterling is undervalued but a no-deal Brexit could push it as low as 1.10. Should Theresa May somehow get her deal through – stranger things have happened – then a rally through to 1.40 would be on the cards. At present risks are tilted to the downside but a last-ditch agreement on the deal is an upside risk.
14th Feb 2019 - Forbes
5 levers to tackle the economic shock of no-deal Brexit
The five recommended 'levers' to manage a No Deal Brexit are:
Drop import tariffs to avoid big price hikes - Use the Article 21 ‘nuclear option’ - Interest Rates. Should I cut or should I hike? - Stop Customs Checks - Deregulate to become a fiscal paradise
14th Feb 2019 - Politico
UK inflation falls to two-year low, offering households help before...
Allan Monks, an economist with JP Morgan, said the impact of the power price cap would be short-lived because tariffs were likely to rise by around 10 percent in April. “Unlike when the cap is lowered, energy firms don’t have to automatically raise prices when the cap is lifted. But we expect they will,” Monks said.
13th Feb 2019 - Reuters UK
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Brexit delivers a shuddering blow to UK economic data
With four consecutive quarters of declining business investment, 2018 recording the lowest annual growth rate of the economy since the financial crisis of 2009 and a slump in output last December of 0.4 per cent, the effects of Brexit were stamped all over the national accounts data published by the Office for National Statistics.
Economists have been calculating the Brexit effect on the economy for more than a year and most agree that it has cost Britain between 1.5 per cent and 2.5 per cent of gross domestic product.
12th Feb 2019 - Financial Times
Brexit: Mark Carney warns of no-deal 'economic shock'
Bank of England governor Mark Carney has urged MPs to solve the Brexit impasse in a speech warning of growing threats to the global economy. He said a no-deal Brexit would create an "economic shock" at a time when China's economy is slowing and trade tensions are rising. "It is in the interests of everyone, arguably everywhere" that a Brexit solution is found, he said.
12th Feb 2019 - BBC
How the economic cost of Brexit is being hidden from Leave voters
One of the reasons Brexit can happen is that its economic costs are not immediately visible. It is experienced but not isolated as a Brexit effect. It can be estimated to a reasonable degree of accuracy by experts, but the Brexit press keeps going on about the pre-referendum Treasury forecast and the broadcast media prefers a quiet life to routinely quoting these expert assessments. Brexit is not about the economy only because Leave voters are being kept in the dark about the impact Brexit is already having.
12th Feb 2019 - New Statesman
Flirting with Armageddon: That's what hard Brexiteers and the EU are doing
Out in the real world of business, of balance sheets, profits and jobs, there is despair at the political impasse as the clock counts down to March 29 and the threat of the UK crashing out of the EU looms ever larger. Some are unconcerned. Jacob Rees-Mogg and his hardcore Brexit cronies in the European Research Group (ERG) relish the prospect of No Deal. They place their own ideological purity above the economy, or the worries of business. If the economy is trashed in the process, well it's a price worth paying.
12th Feb 2019 - Daily Mail
Brexit: Government immigration plans to cost employers more than £1bn after UK leaves EU
The government’s new immigration plans will cost employers more than £1bn, according to a new report. Global Future, an independent think tank advocating “an open and vibrant Britain”, arguges the flagship proposals will also impose an £80m barrier to EU students, and the proposed “settled status scheme” post-Brexit “exactly mirrors the makings of last year’s Windrush scandal – but on a much larger scale”. The analysis goes on to suggest the proposed £30,000 salary threshold for skilled workers would “leave over 100,000 unfilled jobs in social care and nursing, and cause the total EU workforce to shrink by 2025 – making it very difficult for businesses to survive and expand”.
12th Feb 2019 - The Independent
Hammond's Brexit 'deal dividend' not credible, MPs say
MPs have dismissed the chancellor's forecast of a Brexit "deal dividend" of lower taxes and higher spending. The Treasury Committee said it was "not credible" to describe any resultant economic boost from a Brexit deal as a "dividend". In their report on the 2018 Budget, MPs said what was being talked about was "avoiding something really very bad". They also said the government's aim of eliminating the budget deficit had "no credibility" and should be abandoned.
12th Feb 2019 - BBC
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Brexit is clearly taking its toll on UK economic growth
For beneath the headline figures which showed that the economy grew by 0.2% in the final quarter of last year were a couple of striking stories: first, that the economy is looking weaker than those big numbers suggest; second, that that weakness owes rather a lot to Brexit. For one thing, that when you put it at two decimal places, growth in the fourth quarter was 0.17%, which looks a bit weaker than 0.2%, and is barely more than half the 0.3% economists forecast. Second, look at the monthly pace of economic growth and something else leaps out at you. The economy, it turns out, grew by 0.2% in October and November, but then contracted by 0.4% in December.
Every sector save agriculture shrank, from services to the manufacturing and construction sectors.
11th Feb 2019 - Sky News
UK economic growth slowed in fourth quarter
11th Feb 2019 - Express and Star
Brexit no-deal could blow £18.6bn hole in UK economy, tourism body warns
A Brexit no-deal could blow a huge £18.6 billion hole in the UK economy as a result of more than 700,000 jobs being lost in the travel and tourism sector, a leading trade body has warned. It has forecasted a loss of £18.6 billion in GDP to the UK economy in the event of a Brexit no-deal and deficit of £22 billion to the remaining economies throughout the European Union. The research reveals 308,000 jobs in the travel and tourism sector would be lost, as well as an additional 399,000 jobs in the rest of the European Union.
4th Feb 2019 - Daily Express
Impact of a “no deal Brexit” for the tourism industry and jobs in UK
5th Feb 2019 - MercoPress
British Pound Undermined by Data Showing UK Economy Shrank in December
The UK economy shrank in December 2018 according to official data from the ONS with month-on-month GDP data showing the economy shrank -0.4% in December, a decline that exceeds consensus expectations for a reading of 0%.
11th Feb 2019 - Pound Sterling Live
UK economic growth slowest since 2012
The UK economy expanded at its slowest annual rate in six years in 2018 after a sharp contraction in December. Growth in the year was 1.4%, down from 1.8% in 2017 and the slowest rate since 2012, the Office for National Statistics (ONS) said.
11th Feb 2019 - BBC
‘Toxic alliance’: Rebel Labour MPs warned that support for government's Brexit deal could cost constituencies £1.1bn a year
Rebel Labour MPs targeted by Downing Street are being warned that their constituencies could lose £1.1bn a year within a decade if they back Theresa May’s Brexit deal. Analysis of Treasury figures for the People’s Vote campaign found the 32 constituencies such as Wigan and Hartlepool could be hit by a total annual loss of £970m in economic output and some £100m in agricultural subsidies and structural funds within 10 years of leaving the EU. These areas, whose MPs have either backed the government or been reportedly targeted by Ms May, have also seen £895m cuts from local authority funding since 2010, the research found.
12th Feb 2019 - The Independent
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The Brexit Bill: Here’s the Damage So Far
Britain’s status as European hub of choice has suffered a blow. Japanese electronics groups Sony Corp and Panasonic Corp, insurer Chubb Ltd. and money-exchange firm TransferWise are among the companies who have moved their EU headquarters or set up new subsidiaries.
10th Feb 2019 - Bloomberg L.P.
What effect has Brexit had on the UK economy?
The Bank of England found that business investment has slowed sharply, and reckons it will fall by even more this year. Companies are unwilling to flash the cash until they are confident about what lies ahead. That's not just down to a lack of clarity over Brexit, but a result, too, of weaker demand from elsewhere, as the likes of China and Europe slow down. As a result, the Bank now calculates the total level of GDP is about 1.2% lower than it had expected three years ago.
10th Feb 2019 - BBC
British and U.S. Banks Are Deeply Divided on Brexit Ties
While U.S. banks want Britain to maintain the closest possible ties with the EU after Brexit, U.K. banks and insurers are anxious they don’t become beholden to new laws made by Brussels, two of the people said.
10th Feb 2019 - Bloomberg
Blow For UK Growth Businesses As Brexit Hits Fundraising
Disappointing news for start-up and scale-up Britain – investors’ appetite for funding growing businesses appears to be waning. New research suggests there was a marked drop-off in investment in such businesses last year. Beauhurst, the research analyst that specialises in emerging growth companies, says equity investors pumped £7bn into start-up and scale-up businesses last year, down almost 19 per cent on 2017. Deal numbers were significantly lower too: Beauhurst tracked 1,572 transactions during 2018, a near 10 per cent fall on 2017’s figure of 1,744.
5th Feb 2019 - Forbes
UBS Clear to Move $36.5 Billion of Assets to Germany Over Brexit
The impact of Brexit on London’s financial sector came into stark relief as a judge approved plans by a UBS Group AG unit to shift some of its U.K. business -- involving assets valued at more than 32 billion euros ($36.5 billion) -- to Germany.
The Swiss bank’s plans are a response to the “external shock” of Britain’s exit from the European Union, not designed for “commercial advantage” or based on any “internal rationalization,” said Judge Alastair Norris in London, who approved the proposal Tuesday.
5th Feb 2019 - Bloomberg
House prices in Brexit slump:nearly £7,000 knocked off price of average UK home as uncertainty continues
The property market suffered one of its biggest monthly falls since the financial crisis last month as uncertainly over Brexit undermined buyers’ confidence. The average price of a home across the country slumped 2.9 per cent to £223,691 in January wiping almost £7,000 of its value, according to latest figures from mortgage lender Halifax. The fall brought the annual rate of house price inflation down to just 0.8 per cent.
7th Feb 2019 - Homes and Property