Brexit

New UK cabinet best suited to deliver Brexit-lite

14 Jul 2016

British Prime Minister Theresa May has appointed the pro-EU Philip Hammond as chancellor. Brexiteers Boris Johnson and David Davis also have major roles. But the appointments imply a post-EU Britain will look less different to the one that preceded it had others been in charge.

Positive earnings surprise marks peak Daimler

12 Jul 2016

The German carmaker performed much better in the second quarter than analysts had expected, beating operating profit forecasts by more than 5 percent. Unfortunately, it could be Daimler’s last good news for a while. A Brexit-related slump will dent car sales in Europe.

London faces a luxury ghost-town problem

7 Jul 2016

The city’s charm was fading for high-end home investors even before the UK’s vote to quit the EU. A developer in the fancy Nine Elms complex just took a writedown, and prime prices are 8 pct below their peak. Sterling’s fall is a temporary lure, but the capital is losing lustre.

Property gives Britain first post-EU stress test

5 Jul 2016

Standard Life’s 2.9 bln stg UK property fund blocked redemptions after too many investors wanted out. Something similar happened in 2007-08, after which real estate values fell 40 pct. The property market is stretched, as it was then. Hopefully the financial system is more solid.

Japan’s carmakers are passengers in wild FX ride

5 Jul 2016

Shares in Toyota, Nissan, Honda and others have crashed since Britain voted to quit the EU. All will be hit by an economic slowdown, and some would suffer from new tariffs on UK-made vehicles. But the selloff mostly reflects how exposed the firms are to currency-market swings.

Britain joins China in investment limbo

1 Jul 2016

Heathrow Airport's expansion is on hold. Now the UK has voted to leave the EU, controversial or financially demanding decisions may be left dangling. There's a precedent in China, where a graft purge led to widespread dawdling. British inertia could be much tougher on growth.

London’s divorce from wider UK can only go so far

1 Jul 2016

The capital's new mayor is right to seek greater tax autonomy. But after a divisive vote in which Londoners wanted to stay in the EU, the trick is to do so without increasing divisions with the rest of the UK. Offsetting devolution with lower grants is a good place to start.

Britain tests catastrophe bounce back theory

1 Jul 2016

Doom-mongers overestimated how much the U.S. economy would suffer after Lehman's collapse in 2008 or the 9/11 attacks. Gloom about the UK leaving the EU is better judged. As Bank of England Governor Mark Carney acknowledges, policymakers face much tougher challenges this time.

UniCredit plucks direction out of disorder

30 Jun 2016

The Italian bank named Jean-Pierre Mustier as chief executive, much faster than expected. The potential mess from the UK vote to leave the EU means it is not a good time to be rudderless. Mustier is internationally respected, and unlikely to shirk tough decisions.

BoJo exit is small net positive amid UK shambles

30 Jun 2016

Boris Johnson’s decision not to run as Tory leader adds to Britain’s political chaos. The next UK prime minister will most likely be EU-exit advocate Michael Gove or reluctant Remainer Theresa May. A Brexit U-turn now looks less likely - but the process could be more cordial.

Believe bonds not stocks on Brexit damage

30 Jun 2016

Stocks have rebounded after the referendum, suggesting Britain’s prospects aren’t too grim. Yet falling gilt yields point to bleaker outcomes. In the absence of hard economic data, a post-vote slump in consumer morale supports the pessimistic thesis.

Britain’s best course of EU action is inaction

30 Jun 2016

It would be silly to push the button on leaving the European Union before Italy’s referendum in October or French and German elections in 2017. By then the UK will have more leverage, and voters a better idea what leaving looks like. Investors could be in for a dull interregnum.

Post-Brexit generation war can still be avoided

24 Jun 2016

Older Britons voted to leave the EU, while younger ones wanted to stay. It’s a flashpoint in a wider global story of inter-generational strife. Unless some of the wealth is diverted their way, a brain drain of justifiably cheesed-off millennials will hit economic growth.

Football apart, UK has no reason to envy Iceland

28 Jun 2016

The Nordic nation outshone England on the pitch but its EU trade ties are nothing to emulate. It has the single market access that Britain already enjoys, only without any say over the rules. Nor can it dodge the free movement of people or contributions to the bloc’s budget.

Post-EU Britain could address North-South divide

28 Jun 2016

Ditching EU state aid rules means Britain can in theory set different corporate tax rates around the country. That could ease regional economic disparities - a key flashpoint from the referendum. The catch is such a move would require a cleaner break with the single market.

Sterling destined for more measured misery

27 Jun 2016

After voting to quit the EU, Britain faces an economic slowdown that will warrant more monetary easing, a pickup in inflation, and huge political uncertainty. It’s a toxic mix for any currency. Spectacular plunges in the pound will give way to steady falls to new lows.

Austerity has no place in post-Brexit Britain

27 Jun 2016

Chancellor George Osborne has since 2010 aimed to cut public debt and deficits in the name of financial stability. He may now need to row back to cope with any post-vote economic slowdown. Investors’ reaction so far suggests his fiscal rigour was over-zealous in the first place.

The City’s future is in lap of EU gods

27 Jun 2016

Britain’s Leave vote could strip so-called passporting rights from domestic banks and asset managers. One solution is to claim the UK merits equivalent status as its rules match Europe’s. But even if euro peers okay that, London will lose control over future policy-making.

UK banks have range of Brexit shock absorbers

23 Jun 2016

British lenders can weather the storm if Britons vote to leave the EU. Banks will no doubt be hit should the economy slow. But it’s harder for them to go bust than it was in 2008. They have bigger liquidity backstops to cope with any bank run - and so does the Bank of England.

Britain’s EU vote: a guide for the perplexed

23 Jun 2016

The UK is voting on whether to leave the European Union. In many ways, Britain is already a euro-anomaly. No matter which way the public votes, the referendum will leave scars, and usher in big changes that go beyond the EU’s borders – whatever shape those may take.