Economics
Brexit: A six-point guide to why the UK’s unresolved EU exit plans are weighing on its credit rating
The EU’s agreement of a short extension of Article 50 reduces the likelihood of a no-deal ‘Brexident’ next week. Even if Scope has expected the UK to avoid a no-deal exit, the consequences of prolonged uncertainty for the UK’s credit ratings are growing. The EU agreed Thursday to a short Article 50 extension until 22 May, less than the UK’s request for an extension to 30 June and conditional on the Brexit deal being approved in the UK Parliament next...
Whatever happens now, Brexit has inflicted serious damage on UK financial services
Whatever happens next, Brexit has inflicted unprecedented damage on the UK’s financial services industry, the founder and CEO of one of the world's largest independent financial advisory organisations has warned. The finance sector, which makes up about 6.5 per cent of Britain’s GDP, is heavily reliant on Britain's connections with the EU's single market and could face significant disruption in the event of a no deal Brexit. But regardless of how the negotiations pan out, Nigel Green of deVere Group says...
UK loses £900bn as Brexit damage to city worse than expected
A new report has found the hit to the City of London from Brexit so far has been worse than expected, with financial institutions moving £900bn abroad. Dublin has been the biggest winner according to a study which found 275 banking and finance firms have moved business abroad. After rumours that is was to be cancelled again, Tuesday's second meaningful vote in the Commons on Theresa May's Brexit deal will go ahead as planned confirmed Brexit Minister Robin Walker. He...
Concerns money laundering could increase in rush to secure post-Brexit trade deals
The Treasury Committee has warned that the UK must get a grip on money laundering and that is could even increase post-Brexit. The Committee concluded that efforts to fight money laundering in the UK is “highly fragmented.” at the moment. They urged the government not to ignore the seriousness of economic crime in a rush to secure new trade deal in the post-Brexit political environment. Committee chair Nicky Morgan said government should not "bow to buccaneering regulatory pressures” The Treasury...
No-deal Brexit would push UK economy into recession
In more unsettling Brexit news, it has been reported that in a No-deal Brexit scenario the UK economy would tank. According to the OECD (Organisation for Economic Cooperation and Development) the UK economy would slide into recession and growth would plunge under 1 per cent. Even if there is a smoother Brexit the OECD believes that UK economic growth would fall to 0.8 per cent, following on from 1.4 per cent growth in 2018. The last time UK growth was...
No deal Brexit could leave economy 9% weaker & cause food shortages
A ‘no deal’ Brexit could cause huge harm on the UK economy according to a new report. Over the next 15 years the economy could contract by 6 to 9 per cent, according to the Government report. Additionally there could also be food shortages as 30 per cent of food is imported from the EU. It is thought that food prices will rise as well. The report said: “In the absence of other action from government, some food prices are...
Study suggests a key assumption of economic theory may be wrong
The concept of equilibrium, one of the most central ideas in economics and one of the core assumptions in the vast majority of economic models, may have serious problems, concludes a study from the Institute for New Economic Thinking at the Oxford Martin School. The concept of equilibrium is the basis of many economic models, including models used by policymakers on issues like monetary policy, climate change, trade policy and the minimum wage. In a paper published today in Science Advances, Marco Pangallo,...
2019 property market off to a slow start
The year got off to a slow start, with the latest RICS UK Residential Market Survey pointing to a subdued backdrop, as enquiries, sales and new instructions all declined further in London. In the near term across the UK, contributors sense little prospect of a turnaround, as concerns over the potential impact of Brexit, alongside affordability constraints continue to cause buyers and sellers to hesitate. During January, new buyer enquiries fell in London, although at a slower pace than previously. ...
Conservative zero tariffs plan will ‘tear heart out of UK manufacturing’
Business Secretary Greg Clark refused to rule out imposing zero tariffs which would ‘rip the heart’ out of UK manufacturing. Today in Parliament Louise Haigh MP asked the Secretary of State for Business, Energy and Industrial Strategy if he agreed zero tariffs “leave us open to a flood of cheap imports driving down wages and costing jobs?” Greg Clarke replied: “No decision has yet been taken on that . Imposing zero tariffs would be a disaster for UK’s proud manufacturing...