Brexit

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Due to exceptional market circumstances, Standard Life Investments has taken the decision to suspend all trading in the Standard Life Investments UK Real Estate Fund (and its associated Feeder Funds) from 12:00 noon on 4July 2016. The decision was taken following an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the EU referendum result.

If you voted for Brexit and like open-ended UK property funds, we have some bad news | FT Alphaville

Opportunity or disaster? Small firms describe the impact of the Brexit vote The vote to leave the EU has struck a mighty blow to many small businesses, but others say it has opened up opportunities. They share their stories

Opportunity or disaster? Small firms describe the impact of the Brexit vote | Guardian Small Business Network | The Guardian

The European Union is to show its determination to make no concessions to the UK on Brexit terms by telling Switzerland it will lose access to the single market if it goes ahead with plans to impose controls on the free movement of EU citizens. The Swiss-EU talks, under way for two years but now needing a solution possibly within weeks, throws up the exact same issues that will be raised in the UK’s exit talks – the degree to which the UK must accept free movement of the EU’s citizens as a price for access to the single market.

EU tells Swiss no single market access if no free movement of citizens | World news | The Guardian

Part of London’s attractiveness as an international financial centre is its access to the internal market of the wider European Economic Area (EEA). By using a UK licence as a European passport, foreign financial firms can offer their financial services throughout the EEA. London as a financial centre is also home to the bulk of euro-denominated trading with access to euro-settlement and clearing systems. If the UK cannot secure a ‘Norway’ deal and stay within EEA, the UK will lose the passporting rights and access to the euro settlement and clearing systems.

Lost passports: a guide to the Brexit fallout for the City of London | Bruegel

HSBC Holdings Plc has been inundated with foreign-currency account applications as British customers rush to protect their savings, spooked by the post-Brexit rout in the pound. Those who’ve requested the accounts, which allow customers to hold their cash in foreign currencies for overseas trips or to cover international payments, are being told the waiting time is 10 to 15 days, according to Jenna Brown, a spokeswoman for the London-based bank. That’s opposed to five working days advertised on the bank’s website.

HSBC Inundated by Foreign Currency Account Requests Post-Brexit - Bloomberg

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Britain would start the process of leaving the European Union by the end of this year, after consulting with administrations in Scotland, Wales and Northern Ireland and other business groups and unions Britain to leave the European Union finally by December 2018 UK should seek to strike a deal with the EU based on a “liberalised” existing trade arrangement with Canada to eliminate all customs duties and not allow uncontrolled immigration into the UK Britain should seek new free trade agreements with “the biggest prospective markets as fast as possible” The UK should “accelerate” the agreement of the controversial Trans-Atlantic Trade and Investment Partnership deal with the US Britain should prioritise trade deals with the rest of the world focusing initially on China, USA, Canada and Hong Kong then others like Australia, Brazil, India, South Korea, Japan, Mexico and South Africa Britain should start to wean itself off grants from Brussels well before the UK finally severs its links to the EU and instead pay grants directly to farmers and fishermen

The Blueprint for Brexit: how Britain will negotiate out of the EU and spend for the sake of the economy

Theresa May's new Government has indicated that it is prepared to spend in order to stabilise the economy, as it set out a blueprint for post-BrexitBritain. In a major shift away from the era of austerity imposed by George Osborne, the former Chancellor, his successor Philip Hammond suggested his Treasury will borrow in order to invest in British infrastructure. Mr Hammond said that Mrs May’s Government will “borrow and invest wisely” following the “shock” to the economy caused by the Brexit vote.

The Blueprint for Brexit: how Britain will negotiate out of the EU and spend for the sake of the economy

The Leave campaign misled the nation about the full risks of Brexit and what can be achieved without collateral damage to the economy and the unity of these Isles. While it is true that UKIP has only one seat in Parliament, and does not own the vote, its powerful voice cannot be ignored without setting off a dangerous popular revolt.

Parliament must decide what Brexit means in the interests of the whole Kingdom

Policymakers will need to deliver a “collective response” in the wake of the Brexit vote, including fresh central bank stimulus, the Bank of England’s chief economist has warned, in his first public comments on the matter since last month’s referendum. Andy Haldane said that the vote had generated a “heady cocktail” of uncertainty about the economy, policy and politics.

'Take a sledgehammer' to Brexit risks with new stimulus, says Bank of England's chief economist

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EU subsidies via direct farm payments make up 54% of British farmers’ income. And the EU takes 62% of British agricultural exports.

We plough the fields and scarper | The Economist

The issue adds to the problems facing Andrea Leadsom, the surprise appointment to the Department for Environment, Food and Rural Affairs (Defra), as she struggles with the looming end of EU farming subsidies. Farmers and conservationists are tussling over what form any new subsidy should take, while the new secretary of state will have to explain her views on subsidies having previously rejected them. The National Farmers Union (NFU) told the Guardian: “We will obviously be looking for guarantees from government that the support given to our farmers is on a par with that given to farmers in the EU, who will still be our principal competitors.”

Brexit won't free UK from paying for botched EU farming subsidies, warn audit office | Environment | The Guardian

Actually, it's against the law for EU member states (we'd still be an EU member state until the end of the two-year process) to conduct bilateral trade negotiations with other member states or countries. There might be wriggle room here. If the UK and the EU enter into negotiations in good faith they could authorise those talks. But there's not that much good faith about and EU leaders are irritated by Britain's constant demands for a bespoke single market, its vote to leave and the continued uncertainty around its negotiating position. The thing to remember when imagining all this is that we have very little leverage, except for when we trigger Article 50.

Everything you need to know about Theresa May’s Brexit nightmare in five minutes

So what happens when we fall out the EU at the end of the Article 50 process? It's Year Zero. We will have no trade deals, no financial arrangements with the EU or anyone else. We're like a man being thrown out of a plane into the sea with no lifejacket.

Everything you need to know about Theresa May’s Brexit nightmare in five minutes

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The prime minister is under pressure, economists are slashing growth forecasts and companies are warning of Brexit’s dire consequences. London? No, Dublin. The intertwining of trade and finance means no other country is feeling the fallout from the U.K.’s vote to leave the European Union more than Ireland. In the year the Irish marked the centenary of their uprising against British rule, the country remains at the mercy of the unfolding drama in its closest neighbor. “It’s the most serious, difficult issue facing the country for 50 years,” said John Bruton, 69, who was Irish prime minister between 1994 and 1997 and later served as the EU’s ambassador to the U.S.

Ireland Hits Brexit Alarm in Biggest Foreign Crisis in 50 Years - Bloomberg

“Brexit means Brexit” has become Theresa May’s catchphrase. What withdrawing from the European Union actually means is a matter of debate even within her team. Just a week since May became U.K. prime minister, a review of recent comments from her and those she’s tasked with negotiating the country’s departure suggests some contradictions are already surfacing. “We don’t really know what version of Brexit they want,” said Simon Hix, professor of political science at the London School of Economics.

Brexit Means What? It Depends Who in May’s Government You Ask - Bloomberg

The pace of North Sea oil-field shutdowns is picking up as the impact of the market slump is compounded by the uncertain investment environment created by Brexit. Projected spending on decommissioning in the British sector in the decade to 2024 has risen to 16.9 billion pounds ($22.4 billion), according to Oil & Gas UK, an industry group. That’s 16% higher than a 10-year forecast in 2014 as more sites are targeted for closing, it said.

North Sea field shutdowns to climb as Brexit deepens oil gloom

But however much Brussels is reviled for burdensome regulations, especially in the conservative British press, it is primarily up to the national governments to regulate business and ensure that their regulation is competitive. In recent years, individual European countries have actually improved the environment for doing business. Half of the 25 countries in the world where it is easiest to do business are EU members, according to the 2016 World Bank’s Doing Business survey. These are Denmark (3), United Kingdom (6), Sweden (8), Finland (10), Germany (15), Estonia (16), Ireland (17), Lithuania (20), Austria (21), Latvia (22), Portugal (23), and Poland (25). Malta is the lowest-ranked EU country, at 80 (of 189 economies).

European Red Tape Is a Bogus Justification for Brexit | PIIE

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Securities trading in Frankfurt will probably experience an upswing in the wake of Britain’s decision to leave the European Union, with Germany’s banking capital emerging as one of the main beneficiaries in the changing landscape, according to a survey of German financial professionals. More than three-quarters of the respondents said trading and settlement would gain while asset management, corporate banking and professional services are also likely to benefit.

Frankfurt’s Trading Importance Set to Grow Post-Brexit: Chart - Bloomberg

Members of the U.K.'s science and agriculture industries have already begun to voice concerns about the impact on funding and labour as a result of the Brexit vote to leave the European Union. Seven major science academies, including The Royal Society and the Academy of Medical Sciences, have signed an open letter warning there have been immediate implications from Brexit and called for assurances from the U.K. government that academics from the EU will be allowed to stay and that funding for U.K. science will be maintained.

Brexit already impacting UK science and farms

Britain's decision to leave the EU has led to a "dramatic deterioration" in economic activity, not seen since the aftermath of the financial crisis. Data from IHS Markit's Purchasing Manager's Index, or PMI, shows a fall to 47.7 in July, the lowest level since April in 2009. A reading below 50 indicates contraction. Both manufacturing and service sectors saw a decline in output and orders. However, exports picked up, driven by the weakening of the pound.

Brexit causes dramatic drop in UK economy, data suggests - BBC News

The first real signs of distress in the market for luxury London apartments are starting to emerge, as investors who agreed to buy homes off-plan are starting to sell them on for less than they agreed to pay for them. Property websites are now advertising many unfinished flats being offered for sale by the buyers who originally agreed deals with the developers. Estate agents and developers are generally coy about how much sellers were expecting to pay on completion, but some listings reveal that people are selling at or below the original purchase price, hoping the “bargain” price might pull in a new buyer.

Jitters in London luxury flat market as investors sell for 'bargain' prices | Society | The Guardian

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Foreign companies play a pivotal role in Britain’s unusually open economy, carrying out half of all research-and-development spending as well as raising productivity and wages in the firms they snap up (see article). Yet, despite the good news about ARM, two clouds hang over Britain’s ability to attract foreign direct investment. The new government appears to have a more interventionist approach to the economy, one that may put the brakes on similar deals in the future. And Brexit may eventually mean that there are fewer British firms worth bidding for in the first place.

Open for business? | The Economist

Britain’s divorce from the European Union is not going to be easy given there is no precedent and no planning was done before the historic referendum result. A bit more than one month on, here’s what we know -- and what we still have to find out -- about the key issues facing investors and executives as officials work out exactly what Brexit will mean.

The Beginners’ Guide to Brexit: What Have We Learned So Far? - Bloomberg

One benefit of Brexit is that it allows the economy to be rebooted. That is true after any severe economic shock, which certainly applies to the decision to leave the EU. The last time UK policymakers had the chance to implement root and branch cures to the economy’s structural weaknesses was during the financial and economic crisis of 2008-09. Instead they bottled it, relying almost wholly on the Bank of England to support activity through interest rate cuts and the money-creation programme known as quantitative easing (QE).

Brexit offers key opportunity to reboot UK economy | Business | The Guardian

The CBI reported today that manufacturers’ business confidence has fallen at its fastest rate since early 2009, causing falls in investment and hiring plans. This corroborates surveys by Deloitte, Markit (pdf), the Institute of Directors and, to a lesser extent the Bank of England* all of which suggest that the Brexit vote will depress economic activity. This shouldn’t be surprising: uncertainty is bad for the economy. What worries me is that the pain of this will disproportionately hit the low-paid. A new paper (pdf) from the Minneapolis Fed says: It is precisely the households at the bottom of the wealth distribution with low savings rates and high propensities to consume out of current income that suffer the largest welfare losses from a severe recession. Further, these losses are much more severe than those sustained by the "average" household. This is because the low-paid have no financial assets to cushion themselves against job loss and so must suffer either big falls in living standards or resort to high-cost payday lenders whereas the rich have savings and/or access to cheaper credit

Stumbling and Mumbling: Brexit: a blow to the low-paid?

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Bloomberg's handy updates by the minute

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A fearful shadow is hanging over our impending Brexit negotations with the EU – and it centres on the very people who were most vocal in calling for a referendum in the first place: those senior Tory Eurosceptics, including the “Three Brexiteers” now billed to play the lead roles in the negotiations. What became painfully clear during the campaign was not just that the official Leavers were unable to offer a coherent “exit plan”, but that they also seemed to be woefully ignorant of the technical complexities involved in any process of leaving the EU. Although they did not share any common strategy, the likes of Boris Johnson, David Davis, Liam Fox, Bill Cash and Co, came up with one naïve suggestion after another, based on nothing more than wishful thinking.

We need to get real about how to leave the EU

The most crucial gap in their knowledge, however, is their failure to understand that, because all arrangements governing trade are now solely a competence of the EU, we can only legally carry on international trade in accordance with the immensely complex procedures laid down in the EU Customs Code, a package that is 1300 pages long. Unless Theresa May takes a firm grip on what her ministers are up to, by insisting on them going for the simple option of remaining in the EEA, we could even face the ultimate disaster where the timetable for negotiations runs out and we don’t just drop out of the EU without a settlement, but also its Customs Code on which all our current trading procedures depend. Overnight we would no longer have any system of law allowing us to continue trading at all. Not just with the EU, but with anyone else.

We need to get real about how to leave the EU

There has been a pronounced tone-change among UK economics analysts since the EU Referendum: They are in unanimous agreement that the UK will sink into recession in the second half of this year. They disagree only on the details and depth. Call it the Silence of the Bulls: no one — literally, no one — is making a bullish case for the post-Brexit economy. That is what is so scary about this recession. Usually, analysts and economists like to hedge their bets. Their opinions are spread over a range, with outright disagreements. They talk about "the risk" of something happening; they don't say "this will happen."

Statistics show Brexit is causing a recession in the UK - Business Insider

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The Bank’s survey found that most firms didn’t think Brexit would affect their capex or hiring plans. I take no comfort from this. As Geroski and Gregg showed in their great book, Coping with Recession, recessions happen because a few firms suffer badly, not because all suffer mildly. In the 1991 downturn, 10% of firms accounted for 80% of the gross drop in sales.

Stumbling and Mumbling: Brexit: a blow to the low-paid?

Activity among UK manufacturers contracted at its fastest pace for three years in July, according to a closely watched survey. The Markit/CIPS manufacturing purchasing managers' index, the first to have full data since the UK's vote to leave the EU, showed a fall to 48.2, the lowest since February 2013. The survey adds to concerns that the vote prompted a sharp fall in activity. A reading above 50 indicates expansion, but below 50 indicates contraction. The decline was sharper than an initial reading of 49.1 indicated late last month.

UK factory activity falls 'at fastest pace for three years' - BBC News

On the syllabus for that course should be Sarah Lyall's portrait of Boris Johnson this week, as well as her 2002 profile: ''Beneath the carefully constructed veneer of a blithering buffoon,'' Johnson said of himself, ''there lurks a blithering buffoon.''

Going Long on Uncertainty - Bloomberg Gadfly

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For years the EU has been agreeing to fund more projects - commitments - than it makes payments. By the end of 2015 the difference amounted to €218bn, up from €190bn the previous year. Essentially, the EU has maxed out its credit card in the last decade, after splurging on new motorways, airports and other shiny new infrastructure projects in central and eastern Europe. The overspend rolls from one year into the next and is not seen as a problem in Brussels, but now the UK is leaving there has to be a reckoning. According to Wirtschaftswoche, the UK’s share of that “debt” amounts to €25bn.

Britain owes the EU £21bn, report claims – but is it true? | Politics | The Guardian