Brexit

Brexit means UK is wise to defer budget handouts

23 Nov 2016

Leaving the European Union means lower growth and more borrowing. Dumping previous constraints enabled Chancellor Philip Hammond to invest a bit more in housing and research. Though he has wiggle room, Brexit negotiation uncertainty means there are grounds to hold back for now.

Irish lack ammo in corporation tax battle

22 Nov 2016

Theresa May and Donald Trump’s plans to slash UK and U.S. corporation tax rates are ominous for Ireland. Cutting its headline rate further is toxic politically and would reduce a key source of revenue. It leaves Dublin reliant on EU access as competition for investment grows.

Britain’s brave new world hits post-Brexit reality

21 Nov 2016

Prime Minister Theresa May wants capitalism to work for the little guy. But in a speech to UK business she softened ideas like putting workers on boards, while promising low corporate taxes. Pressure to rein in the deficit and migration leaves less room for policy innovation.

Clearers’ worst-case scenario requires EU own goal

14 Nov 2016

A London Stock Exchange-commissioned report reckons Brexit could lead to the loss of up to 83,000 market infrastructure jobs in the UK. This most painful outcome might cost banks at least $77 bln, says a UK data provider. It's in European interests to avoid that outcome.

London visa idea is clever but quixotic

10 Nov 2016

A business lobby wants a post-Brexit visa valid only in the capital for roles that can't easily be filled by UK workers. That would be good for the economy, but politically tricky. It would worsen divisions and jeopardise Prime Minister Theresa May's pledge to slash immigration.

Politics-scarred investors will deploy new tactics

9 Nov 2016

After Brexit, Donald Trump's U.S. presidential win is another surprise that leaves money managers clueless about future policies. With more ballots ahead in Europe, waiting for post-event buying opportunities is increasingly less risky than betting the consensus will prevail.

Brexit divergence puts Bank of England in a bind

3 Nov 2016

The pound has fallen as investors brace for the economic pain of Britain’s exit from the EU. Meanwhile consumers are behaving as if nothing has changed. Rising prices will squeeze spending, leaving BoE Governor Mark Carney trapped between slower growth and higher inflation.

UK government court loss is no bar to hard Brexit

3 Nov 2016

Prime Minister Theresa May needs parliament's approval to trigger the EU exit process, judges ruled. She could win the vote even if she loses any appeal, and restricting May's negotiating position risks weakening her hand. The legal ruling is no roadblock to a damaging divorce.

Britain better off if Carney stays

31 Oct 2016

The governor’s tenure has become a test of the Bank of England’s status. If he left in 2018 the decision would spook foreign investors and embolden the bank’s domestic critics. Extending his term would signal that the British government still values independent monetary policy.

Britain’s Brexit airbag can’t cushion everyone

28 Oct 2016

Nissan’s UK plant will get state help if its competitiveness is harmed by Britain leaving the EU. Offsetting potential tariffs is unorthodox, but feasible and not especially expensive, even if rolled out to the whole industry. But picking winners also means picking losers.

Resilient UK growth adds to policymakers’ quandary

27 Oct 2016

GDP rose by 0.5 pct in the third quarter as the economy barely broke its stride after Britain voted to leave the EU. The good news makes it harder for the government and Bank of England to justify a hefty stimulus. But if things do get worse their response may come too late.

Infrastructure dream grounded by Heathrow reality

25 Oct 2016

Britain has finally agreed to add a runway to London’s main airport. Even now, the plan may yet founder. Western democracies face challenges when launching big projects. The benefits of a renewed splurge of infrastructure spending will take decades to materialise.

Defiant losers are becoming a costly problem

20 Oct 2016

Pro-EU campaigners and Britons who live near airports have challenged the will of the majority. Donald Trump may not accept U.S. election results. In finance, companies regularly face and resolve such insurrections. Solutions are similar in politics, but harder to implement.

Unshackled May is best bet for Brexit

19 Oct 2016

High Court claimants say the government owes parliament a say before triggering EU exit. The risk is that MPs use a vote to restrict Theresa May's options and weaken her hand. Proponents of a "soft Brexit" might end up with a more agreeable deal if the government goes in hard.

Inflation shows up at wrong time for Mark Carney

18 Oct 2016

UK consumer prices are rising at their fastest pace in nearly two years. It should be a proud moment for the Bank of England chief, who has been struggling to achieve exactly this. Unfortunately, the pound’s fall is going to give him a bit too much of what he wanted.

UK property didn’t get the “hard Brexit” memo

17 Oct 2016

Real estate funds that froze after the UK vote are opening, and prices have stabilised. Yet rents could collapse if Britain makes a clean break with the EU, and foreign investors may not ride to the rescue. Property stocks pricing in 20-percent price falls aren't cheap.

Breakdown: The dismal art of forecasting sterling

14 Oct 2016

Most economists agree the pound has further to fall, but there is a wide range of views on how far. Long-term forecasts are an unfortunate necessity, but they are stab in the dark when it comes to a currency that is more in the thrall of politics than economics.

German labour law not so bad, unless you’re a bank

13 Oct 2016

Only in Venezuela and China is it harder to sack workers. Teutonic industrial companies have learned to cope and job creation is booming. The only catch is that Germany’s labour-friendly rules are ill suited to the generous pay and hire-and-fire culture of global finance.

Cox: Amsterdam has first-world financial dilemma

13 Oct 2016

The city that invented the stock exchange and multinational may be Europe's ideal post-Brexit banking hub. Beyond fears about traders' Ferraris clogging bike lanes, however, Amsterdammers will need to overcome a bonus cap. This is where populism may win out over Dutch pragmatism.

ING’s partial London confidence vote stacks up

13 Oct 2016

The Dutch lender is moving 60 staff to the UK capital even as Brexit fears push rivals to ponder leaving. London's financial centre status and talent pool remain big draws. And by relocating only execution-focused traders rather than sales staff, ING caps its downside.