- The British Chambers of Commerce urged the U.K. and EU to delay Brexit if no new trade deal is lined up within two years
- GfK’s measure of U.K consumer confidence weakened, while a YouGov and Centre for Economics and Business Research index of job security slumped to its lowest since 2014
- Poland’s government said Brexit will bring as many as 200,000 Poles back home
- Hungarian Economy Minister Mihaly Varga said Brexit may accelerate the creation of a two-speed EU, threatening eastern European members outside of the euro.
Brexit Bulletin: A Nation of Bankers?
By: Simon Kennedy | Feb 28 2017 at 02:40 AM | International Trade
Once regarded as a “nation of shopkeepers,” Britain may now be a country of bankers.
Some 2.2 million people work in finance and as TheCityUK reports on Tuesday, two-thirds of them are outside of London. Bloomberg’s Richard Partington has been to meet some of them, including David Whitehouse of Duff & Phelps, who spends most of his week in Manchester, sometimes commuting the two hours by train to and from the capital.
He doesn’t want the U.K. to see its advantage in financial services flow to others after divorce from the EU.
What does it all mean for Brexit?
For one thing it demonstrates the importance of finance to the British economy. TheCityUK estimated financial and related professional services contributed £176 billion ($219 billion) to the U.K. economy in 2015, with more than half generated outside the London.
That puts PM Theresa May under pressure to protect the industry. Failure to do so could end up costing jobs throughout the country as the likes of Dublin and Frankfurt lure banks looking to escape Brexit.
The data could also serve as a rejoinder to those irritated that London has come to dominate decision-making and society. Indeed, a separate report from the British Bankers’ Association last week showed 90 of the top 100 parliamentary constituencies with the greatest concentration of banking weren’t around London.
“You can’t just think it’s a London issue,” said Steve Cooper, chief executive officer of personal banking at Barclays.
“There are issues for both London and the wider U.K. around Brexit, so managing the transition to whatever the outcome will be needs to be very well considered and very well thought through.”
Major Intervention
Former Prime Minister followed Tony Blair’s lead in lambasting preparations for Brexit.
In a speech on Monday evening, Major accused May of making undeliverable promises and told her to prepare people for the compromises she will need to make in the negotiations.
The victors of last year’s referendum are treating the losers with a “disregard that amounts to contempt,” he said. “The British people have been led to expect a future that seems to be unreal and over-optimistic.”
Why are Major and Blair speaking out? Perhaps because of frustration that the case for softening Brexit isn’t being made strongly enough within Parliament and the opposition Labour Party is struggling to define its position. The House of Lords on Monday chose not to amend May’s draft Brexit bill to demand membership of the single market or a continued open border between Northern Ireland and the Republic of Ireland.
Major ran into a rebuke from pro-Brexit MP and former minister Iain Duncan Smith. It was “almost the speech of someone who simply refuses to accept that the British people made the decision that they did,” he told the BBC’s Newsnight.
On Brexit’s Front Lines
For the second part of Bloomberg’s series of reports from inside firms as Brexit approaches, Franz Wild met one of the biggest pro-Brexit business figures in northeast England.
During the referendum campaign John Elliott even donned a dress for a comic campaign video, so committed was he to the cause. He now says he has no regrets, even though leaving the EU might cost his water cooler company some duty-free advantages on its exports.
“Tariffs are an inconvenience, not a show-stopper,” Elliott, 73, said. “You just have to build a good product. You can manage the rest.”
Takeover Teeters
As Deutsche Boerse’s $13 billion takeover of London Stock Exchange teeters on the brink of collapse, questions are being asked about whether Brexit thwarted the effort to create a European champion.
While the LSE cited impossible regulatory demands, some of those familiar with the discussions pointed to a stalemate over the location of headquarters, which was magnified by the British vote to leave the EU.
That decision exposed key parts of the business, like euro clearing, to political riptides, they said. It’s the second major deal in as many weeks where Brexit was cited as a factor in its collapse, following Kraft’s decision to pull its bid for Unilever.
Steeling for Pain
Elsewhere, the U.K.’s embattled steel industry faces a hit from Brexit.
Britain has long resisted a proposal that would raise EU tariffs on imported steel for fear it would increase costs for users. But if the country adopts more open trade policies when it leaves the EU, that could open the floodgates for imports.
That has a trade group and lawmaker warning of a surge in below-cost steel from China, Bloomberg’s Thomas Seal reported. The solution, according to Seth Rosenfeld, an analyst at Jefferies International, would be “higher and higher trade barriers.”
Brexit Bullets
