Brexit

Tesco customer-first strategy will chafe investors

12 Apr 2017

The grocer had its first full year of like-for-like UK sales growth in seven years. Boss Dave Lewis hopes to shield shoppers from rising prices, but not crush suppliers. The risk is that he has to fund that plan with the spoils of Tesco’s $4.6 bln purchase of wholesaler Booker.

Hadas: Hard Brexit could have sting in the tail

6 Apr 2017

Conventional wisdom is that even a "clean break" with the European Union just means a slower UK growth rate. But if modern revolutionaries gain control, Britain might end up with less foreign money and fewer trading partners. That would bring a huge drop in living standards.

Saudi will find luring May was the easy part

5 Apr 2017

The British prime minister’s charm offensive in Riyadh may help sell more planes and halal lamb. It also sends a message to EU negotiators. What Saudi really needs is investment, people and skills – which hinge on the so-called soft issues Theresa May seems happy to overlook.

Britain is appropriate spearhead for bonus rethink

5 Apr 2017

UK ministers want to cut so-called long term incentive plans from executive pay. Such schemes can work, but all too often don’t. Turning them into less opaque deferred bonuses could preserve domestic competitiveness, while aligning Britain with peers that value greater clarity.

Brexit forces issues that are best left murky

4 Apr 2017

A phony battle over how Spain and Britain might treat tiny Gibraltar is a distraction, and a warning. If Britain’s exit from Europe becomes a mechanism for settling old scores, it could kill the constructive ambiguity on which the UK, the euro and the single market all depend.

Review: A flawed compass for post-Brexit Britain

31 Mar 2017

The vote to leave the European Union exposed a new political fault line, David Goodhart argues in “The Road to Somewhere”. The solution is for cosmopolitan elites to share more power with those left behind. The tension is real, but the distinction too broad to be a useful guide.

Lloyd’s exemplifies London’s phantom Brexodus

30 Mar 2017

The insurance marketplace is creating a new company in Brussels. Yet safeguarding access to European clients only means moving a maximum of a tenth of staff. Companies are readying their parachutes, but this is a long way from threatening the city’s pre-eminence.

LSE-Deutsche Boerse failure merits only fake tears

29 Mar 2017

Brussels has blocked the European exchanges’ $30 bln merger. The LSE’s reluctance to sell a trading platform looks like a fig leaf. A cautiously positive market reaction flags that both groups have dodged the trials of steering the deal through Brexit.

Market’s vision of Brexit is too rosy

29 Mar 2017

As Britain triggers the process for leaving the EU, investors are more phlegmatic than they were six months ago, a Breakingviews index based on asset prices shows. There is plenty of scope for that to change if hard bargaining coincides with slowing growth.

Return on equity is fair game for bank regulators

27 Mar 2017

The Bank of England's next stress test will assess if lenders’ earnings exceed their cost of equity. That might sound like statist meddling, or doing investors’ job for them. But as a way to stop banks taking silly risks to offset low rates, it makes sense.

Markets can ease Bank of England inflation dilemma

21 Mar 2017

Prices rose 2.3 pct in February, surpassing the central bank’s target for the first time since 2013. Market rates and sterling rose. This tightening in monetary conditions might allow Governor Mark Carney to defer a hike in official rates until the economic outlook is clearer.

Brexit could weaken Britain’s puny productivity

21 Mar 2017

As in most developed countries, UK companies are struggling to produce more with the same workers. Exporters and foreign-owned firms are the notable exceptions. If leaving the European Union squeezes trade and shrinks foreign investment, living standards will suffer.

Britain’s budget U-turn merits Brexit deal alarm

15 Mar 2017

Chancellor Philip Hammond has reversed last week's tax hike for self-employed workers. As EU exit negotiations begin, the UK critically needs a united government that can be firm in the face of political pressure. Ditching a defensible reform implies the opposite.

Pru’s plain sailing faces potential Asian squall

14 Mar 2017

The UK insurer beat forecasts and is on track to meet 2017 growth targets. One wrinkle is that its Asian business is increasingly reliant on sales in Hong Kong, which could be hit by Chinese capital-flight curbs. Any slowdown will, however, take a while to dent earnings.

Second Scottish vote could still mean hard Brexit

13 Mar 2017

Sterling rose against the U.S. dollar as Scotland’s first minister called for another independence referendum. One theory is Prime Minister Theresa May will need to take a softer line on Brexit negotiations to persuade Scots to stay. But a hard divorce is still possible.

Bovis Homes suitors have good reasons to pitch low

13 Mar 2017

The UK homebuilder has attracted interest from two peers. The rival premiums of 5 pct and 7 pct appear underwhelming. But a takeover would be a quick fix for investors’ worries about management and building standards, and there are few justifications for a much sweeter offer.

Aviva’s transition from zero to hero gathers pace

9 Mar 2017

The UK insurer beat forecasts and is on track to hit 2018 targets on operating profit, cash generation and dividends. It’s a far cry from its hapless performance post-financial crisis. Increasingly, CEO Mark Wilson’s job is to avoid splurging his excess capital on duff deals.

Do-nothing UK budget belies big risks ahead

8 Mar 2017

Finance Minister Philip Hammond revealed minimal changes to tax and spending. His prudent message makes sense, but contrasts with the large and unpredictable economic consequences of leaving the European Union. It won’t take much for these to knock deficit reduction off course.

Britain needn’t fear SoftBank’s pass-the-parcel

8 Mar 2017

The Japanese tech group may shift part of its stake in British chip designer ARM to a $100 bln fund forged with Saudi Arabia. If SoftBank and ARM's board retain control, commitments over UK jobs should be upheld. A more international shareholder base may extend ARM's clout.

Foxtons shines light on London’s squeezed middle

8 Mar 2017

The London-centric estate agent is a good guide to the capital’s property market since the vote to leave the EU. Things look toughest in the affluent middle, and city centre. With its shares below their IPO price, Foxtons is suffering for hitching its wagon to the metropolis.