Brexit

Unilever-FTSE standoff is test of index power

28 Mar 2018

The benchmark compiler must decide whether to keep the Marmite maker in the FTSE 100 after it opted for a Dutch head office. Recent tax changes and activist pressure may prompt similar rejigs at heavyweights Shell and BHP. The index may have to bend its rules to retain its clout.

Brexit risk looms larger as UK banks get smaller

20 Mar 2018

Shares in the 1.1 bln pound Virgin Money trade below book value despite a 14 pct return on tangible equity. Market behemoth Lloyds, meanwhile, is worth more than its net assets. Investors seem to be betting that a double whammy of funding costs and bad debts hits minnows harder.

Brexit transition deal buys little but time

19 Mar 2018

The agreement that effectively keeps Britain in the European Union until 2021 gives businesses longer to prepare for departure. But key disputes about the UK’s future relationship with Europe, such as the Irish border, remain unsolved. And the risk of a chaotic exit remains.

Unilever exit is double setback for London

15 Mar 2018

The Dove soap maker has picked Rotterdam as its global base in a corporate streamlining. Scrapping its Dutch trust office will help reassure investors that the move is not a takeover defence. However, the reshuffle may also rob the FTSE 100 index of one of its larger members.

City’s Brexit trickle need not turn into an exodus

13 Mar 2018

Banks such as Goldman Sachs and Standard Chartered are already moving London-based bankers to Frankfurt. Losing the “passport” to the EU’s single market means more will go. But large-scale flight can be avoided – as long as UK regulators stick closely to EU rules.

LSE is suspended in comfortable limbo

2 Mar 2018

Despite a boardroom spat over the departure of CEO Xavier Rolet, the exchange operator’s adjusted operating profit rose 18 percent last year. The next boss will face big questions about consolidation and Brexit. The answers will determine whether LSE can justify its valuation.

Advent’s UK car technology bet safer than it looks

1 Mar 2018

The private equity group is snapping up British tech firm Laird for 1.2 bln pounds including debt. Paying a 73 percent premium for a group exposed to the car sector post-Brexit sounds punchy. But Advent doesn’t need to reinvent the wheel to spruce up its undervalued target.

Corbyn turns soft Brexit into hard politics

26 Feb 2018

The Labour leader says Britain should stay in a customs union when it leaves the EU. Though his Brexit vision is fuzzy, it may appeal to voters and galvanise a parliamentary challenge to embattled Prime Minister Theresa May. UK political instability looks set to step up a gear.

Hadas: Brexit trial could go worse than expected

9 Feb 2018

Are economists biased against Brexit? If anything, their estimates, which rely on imperfect precedents, are too optimistic. Leaving the EU will impair UK growth by hitting long-term confidence, institutional strength and workforce quality – all hard to capture in a spreadsheet.

Chancellor: Beware economic models’ hidden biases

6 Feb 2018

In the age of fake news there’s one comforting thought. It’s easy to expose blatant lies. Harder to identify are possible prejudices buried in the models that inform policy decisions, as recent controversies involving Brexit's impact and the World Bank business rankings suggest.

Cox: Sliding stocks don’t surprise our readers

5 Feb 2018

From Mumbai to Milan, we polled participants at our Predictions 2018 summits. Even before last week's rout, most thought investors are too exuberant, bitcoin is a bubble and Donald Trump is doing poorly. More surprising were regional takes on NAFTA, Italian elections and Brexit.

Brexit leak nudges UK towards softer withdrawal

30 Jan 2018

State papers reportedly show the country will lose in every scenario after it leaves the EU. That will inflame tensions within the Conservative Party and government. Sadly for anti-Brexiteers, the upshot is more likely a less abrupt schism than a scrapping of the entire process.

Car lenders’ real risk is fines, not writedowns

15 Jan 2018

The rapid growth of UK auto finance has led to a glut of shiny new motors and twitchy regulators. Banks and carmakers can absorb a hefty drop in used-car prices. The bigger hazard is that lenders may cut corners to keep the market ticking over and end up paying conduct fines.

Next cheer may delay essential style overhaul

3 Jan 2018

The UK clothing retailer is more upbeat about the outlook for full-year profit. The danger is that healthier sales and diminishing price pressures will tempt CEO Simon Wolfson to dodge tough decisions, such as much-needed store closures.

UK rolls out banking red carpet as EU rolls it up

20 Dec 2017

EU banks can continue to operate as branches in the UK after Brexit, according to Bank of England proposals. Meanwhile looming EU rules on bank holding companies and the bloc’s insistence on bonus caps and the like suggest UK lenders shouldn't expect much leeway in return.

Review: Why Brexit will ultimately please nobody

15 Dec 2017

Britons voted to leave the EU for myriad and conflicting reasons, according to “Brexit and British Politics”. It’s hard to see a settlement that addresses them all. The risk is that voters see Brexit as another betrayal by politicians, fuelling the disaffection that caused it.

Britain heads for Brexit in name only

8 Dec 2017

Theresa May’s deal with the European Union averts a chaotic divorce for now. But a fudge about the Irish border exposes the difficulty of preserving trade while leaving the bloc. A transition phase will create scope for May - or another prime minister - to make new concessions.

Brexit deal hinges on enlightened obfuscation

5 Dec 2017

A plan for Northern Ireland to accept some EU rules has met with opposition in Belfast and demands for similar treatment elsewhere. Prime Minister Theresa May's best hope is to fudge tough decisions, and use the threat of a chaotic exit – or another election – to quash dissent.

UK plays weak hand badly in Brexit poker

29 Nov 2017

The country has reportedly bowed to EU demands that it pay up to 100 bln euros when it leaves the bloc. Months of haggling have wasted time and goodwill even before the start of talks on trading arrangements. The outcome shows the UK has a lot less leverage than it pretends.

Britain’s Brexit-ready banks a boon for government

28 Nov 2017

The country’s lenders are robust enough to handle even a messy exit from the EU, according to the Bank of England’s latest stress tests. The clean bill of health will help state-owned RBS restart dividend payments, making it easier for the UK to sell down its 71 percent stake.