- Despite a slick campaign to lure companies from London to Berlin
after Britain voted to leave the European Union, some of those which
have moved say it is not as easy as it first appeared.
the unexpected referendum decision in June, Germany's liberal Free
Democrats hired a truck to drive around London with a billboard
declaring, 'Dear start-ups, Keep calm and move to Berlin'.
ironic reference to a popular poster entreating Britons to Keep Calm and
Carry On at the outbreak of World War Two against then Nazi-ruled
Germany, it was soon followed by the opening of an official Berlin
marketing office in London.
Two London based companies are among
those who have already taken the plunge. Their experience highlights the
attractions of the German capital but also the bureaucracy that lurks
behind the marketing, a factor in the global tussle for business
unleashed by the Brexit vote.
Web-design company MBJ London and
real-estate investment platform Brickvest, both co-run by Germans, had
already planned to open offices in Berlin but were jolted into speeding
up their investments by Britons' June 23 decision.
The motivation: to limit their London exposure in case of a "hard Brexit" - where Britain loses access to the single market.
To recover confidence in Sterling and UK gilts, markets will need
increased policy clarity. Political uncertainty will remain a key
negative factor for UK asset prices, especially as there is little
prospect of an early resolution to the Brexit negotiating stance. There
is, however, the potential for greater fiscal and monetary policy
clarity during November, which would help lessen the risk premium on UK
November will be a key month for the shot-term UK outlook with the Treasury and Bank of England
carrying a heavy responsibility. The immediate focus will be on Bank of
England monetary policy meeting on November 3rd, which will coincide
with the latest inflation report.
At the August MPC meeting,
there were comments that a majority of members expected that monetary
policy would be eased further before the end of 2016 if the economy
performed in line with the bank’s expectations.
Since then, the overall tone of indicators has been slightly stronger
than expected, especially for consumer spending, although there has
been some evidence of moderation in PMI surveys. Overall, the economy
has performed slightly better than expected since the August meeting.
Sterling has fallen sharply over the past month with the UK currency
at fresh 31-year lows against the dollar. There will inevitably an
impact in pushing inflation higher, although bank officials have
expressed the opinion that the immediate increase in prices has been
weaker than expected.
The government’s Autumn Statement is due for release on November
23rd. and the bank will inevitably be briefed on its content ahead of
Markets have been expecting the government to deliver a significant
boost to spending to help support the economy, potentially through the
announcement of additional construction spending.
That would involve common sense prevailing. An unknown quality in politicians these days.
political positioning by May and as for the parliamentary debates they
can talk all they but still little chance of a vote ever happening.
has heard that US banks want the financial industry shielded for a
longer period than the 2 years under article 50. Bank Execs have spoken
to the European Commission to say they will need longer to prepare and
transition no matter what new arrangements are made with the UK.
They would like to keep full access to the single market as well as current regulation for several years.
senior EU source told Buzzfeed that UK officials said banks wanted a 5
year transition period. Sources also said that banks will ramp up
lobbying of both the EU and UK into a full campaign, which will
highlight uncertainty over jobs and investments if their demands are not
Recently we've heard all about banks and their
views on relocating and the possibility of job losses but that's all
surface noise. This story highlights that deeper down the banks want
greater certainty over what may come from Brexit negotiations, and are
prepared to threaten to get it. In the wider picture, this is
potentially positive news as it makes it more likely that banks will be
looking to stay in London, if they get the right conditions from Brexit
For all the back and forth between the UK
and EU politicians, one thing they are all concerned about is the
potential financial fallout from Brexit, as that's where the biggest
stability risks lie. The banks themselves are going play a very big part
in how that turns out.
You can read the full story from Buzzfeed here.
form the usual arguments he acknowledged that the UK was centrally
important to the financial world but that he may still have to move
firms and families abroad.
Inside the warnings about
moving staff and operations he also touched on the fact that banks an
institutions might use Brexit to look locations as a whole and whether
they need operations in so many countries. That sounds like someone who
sees a big cost saving flashing in his eyes.
He also said it wasn't a shoe-in that banks would move to Europe and may choose to go to the US instead.
That's the story that's being cited for the drop. Reader Biscotti highlighted the event earlier in the comments section.
GBP getting some support on the headline just published by Reuters.
further detail at this point but one might reasonably think the man who
drafted Article 50 may have some knowledge of the terms.
GBPUSD has spiked to 1.2365 but back to 1.2350. EURGBP dropped to 0.8991 but now 0.9007 again.
UK High Court ruling on whether a parliamentary vote is need
before even triggering Article 50 is due at 10.00 GMT