Brexit

UK chips away at post-Brexit housebuilding crisis

12 Sep 2018

The government and Barclays will lend 1 bln pounds to cash-starved small developers. It’s a neat way to help reduce Britain’s reliance on a few large builders. Yet a skills shortage as the country leaves the EU and arcane planning rules mean it’ll be a drop in the cement bucket.

The Exchange: From slump to Trump

4 Sep 2018

In the first of our “Ten Years After” series, Peter Thal Larsen talks to Adam Tooze. The Columbia University history professor joins the dots from the 2008 crash to Brexit and U.S. elections, noting a declining faith in U.S. willingness to be the global lender of last resort.

Britain is making a mess of replacing Mark Carney

3 Sep 2018

The Bank of England boss may extend his term for a second time, keeping him at the central bank beyond June 2019. That could offer comfort to investors worried about Brexit. But it would suggest the government is struggling to find a good successor. That’s a bad signal to send.

Hadas: The missed opportunity to do Brexit right

29 Aug 2018

Planning for “no deal” should embarrass serious supporters of Britain’s departure from the European Union. An abrupt break will cut thousands of crucial ties and create chaos. The pro-Brexit crew could have learned from the EU’s history of backing high deals with dull details.

UK-Africa trade is tiny plaster for Brexit wounds

28 Aug 2018

Prime Minister Theresa May hopes deeper ties with the continent will help cushion the blow of leaving the EU. But UK trade with sub-Saharan Africa is less than 3 pct of what it exchanges with Europe. With Nigeria and South Africa in the doldrums, prospects for growth look slim.

Brexit plan B is an exercise in UK humility

23 Aug 2018

Britain’s contingency plans for leaving the European Union without an exit deal distil the economic risks of red tape, border delays, and financial disruption. While the scenarios aren’t novel, they underscore the extent to which the UK is relying on Brussels’ good will.

Britain can limit no-deal Brexit currency crisis

23 Aug 2018

The UK is publishing contingency plans for a no-deal EU exit. Its unspoken parachute, however, is Britain’s vast pile of overseas assets, which cushion a sterling crash and calm solvency fears. The bad news is that the impact on the City of London could erode that defence.

Sterling looks ripe for a short sharp bounce

9 Aug 2018

The pound is at its lowest in nearly a year against the dollar and the euro, and options prices show extreme pessimism about its outlook. Investors have grown too gloomy too soon about the risk of a messy Brexit. Even a glimmer of hope of a better outcome will spark a snapback.

Sterling’s Brexit jitters bigger than they look

7 Aug 2018

The pound’s gyrations in the coming year will be fairly restrained, options prices imply. But the currency is expected to be jumpier than a basket of major exchange rates, rather than less volatile as in pre-EU vote days. That gap is a sort of Brexit risk premium, and will grow.

Mark Carney raises rates from position of weakness

2 Aug 2018

The Bank of England governor nudged up borrowing costs even though growth is tepid and will suffer if Brexit goes badly. The economy’s speed limit has declined since the financial crisis and EU talks will take time to pan out. He had little choice, but may have to reverse course.

May at least gains soft-power edge over Trump

13 Jul 2018

As the U.S. president ripped into the prime minister’s Brexit policy, an annual ranking of nations’ powers of persuasion put the UK back at No. 1. America’s slide to fourth is less surprising. It’s a crumb of comfort for Theresa May, but she will struggle to stay on top in 2019.

Brexit is confronted with its own contradictions

12 Jul 2018

Theresa May’s exit plan involves the UK sticking to EU goods rules in return for symbolic but uncertain benefits on immigration and trade. Even if Brussels accepts the convoluted customs arrangement, Britain’s parliament may not. A dangerous standoff looms later this year.

Rotten food is least of UK grocers’ Brexit worries

11 Jul 2018

British supermarket operators worry that failure to reach a deal with the EU would see goods stuck at the border. More serious is the prospect of tariffs on imports from the bloc. That would leave them scrambling to protect thin margins and their market share from foreign rivals.

Boris Johnson exit makes UK pound more binary bet

9 Jul 2018

Sterling fell after the foreign secretary resigned. Prime Minister Theresa May may have a freer hand to negotiate a less economically damaging Brexit. Or she, the negotiations, and the economy could fall victim to political infighting. There’s little middle ground for the pound.

May’s Brexit plan faces battle on three fronts

9 Jul 2018

The resignation of two cabinet ministers emboldens hardliners who say PM Theresa May’s proposal to quit the EU is too soft. But opposition parties think it’s too hard, while Brussels will demand more concessions. That increases the chances Brexit will be chaotic – or be delayed.

UK counts cost of finance jobs which never come

9 Jul 2018

BlackRock’s choice of Paris over London as the base for its new alternative asset management business underscores the shift in investment away from the British capital. Though the focus has been on bankers relocating, the bigger cost is those new jobs which pass the City by.

Brexit dividend will be cashed in euros

6 Jul 2018

Nine months before Britain is due to leave the European Union its departure terms remain unclear. Prime Minister Theresa May’s latest plan cannot provide the certainty businesses seek: hence the shifting of investment and people elsewhere. Banks look set to lose whatever happens.

Derivatives spat is bad omen for UK-EU regulation

27 Jun 2018

The Bank of England wants European authorities to provide assurance that contracts worth 100 trillion pounds will be valid after Brexit. The EU’s watchdog says banks must prepare for the worst. Playing politics with financial stability bodes ill for future regulatory cooperation.

Airbus’ Brexit certainty drive is wishful thinking

22 Jun 2018

The nature of the planemaker’s business means that earmarked transition periods after a UK exit could be too short. But its call for clarity on future arrangements will fall on deaf ears. Even if UK politicians weren’t bungling the process and wanted to help, they can’t.

UK’s Brexit backstop only a partial step forward

7 Jun 2018

Britain has proposed a backup plan for avoiding a hard border in Ireland when it leaves the EU. Characteristically, it fudges how long the plan will last, and it still needs Europe to agree. Investors wondering whether Brexit will be mild or ruinous still have little to go on.