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Brexit: Everything You Need To Know - page 7

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Fleeing Brexit to Berlin? Beware red tape, startups say


- 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.

Following 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'.

An 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.


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Brexit Update: November Will See Greater UK Financial Clarity, Risk Premiums To Decline Slightly


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 assets.

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 release.

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.


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UK's May says there will be a series of parliamentary debates on Brexit


UK PM May out on Reuters 24 Oct

  • including "high level" negotiating principles
  • firmly believe that if we approach Brexit talks in constructive spirit then can ensure smooth departure

That would involve common sense prevailing. An unknown quality in politicians these days.

  • a number of European leaders congratulated her on her party's conference Brexit speech
  • disappointed by stalled talks over EU-Canada trade deal, will do everything UK can to help get it back on track
  • clear that UK has already been discussing future trading relationships with "third countries"

More political positioning by May and as for the parliamentary debates they can talk all they but still little chance of a vote ever happening.

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US banks to push UK and EU for Brexit extension

US banks want a longer transition period than 2 years

Buzzfeed News 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.

A 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 met.

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 negotiations.

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.

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BOE's Carney says UK banks have post-Brexit contingency plans at varying stages of readiness


BOE gov Carney still in full flow at the House of Lords 25 Oct

  • different banks have different tolerance levels
  • some banks will be able to activate contingency plans over next year if they see fit
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Brexit - secret audio of PM May with Goldman Sachs on what she really thinks

This is from The Guardian, what they say is "a secret audience with investment bankers a month before the EU referendum."

  • Theresa May privately warned that companies would leave the UK if the country voted for Brexit
  • reveals she had numerous concerns about Britain leaving the EU
  • "I think the economic arguments are clear," she said. "I think being part of a 500-million trading bloc is significant for us. I think, as I was saying to you a little earlier, that one of the issues is that a lot of people will invest here in the UK because it is the UK in Europe.
  • If we were not in Europe, I think there would be firms and companies who would be looking to say, do they need to develop a mainland Europe presence rather than a UK presence? So I think there are definite benefits for us in economic terms."
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Morgan Stanley CEO: Don't be too sure Europe will be the Brexit bank destination of choice


Morgan Stanley's CEO James Gorman spoke to Bloomberg and passed on his worries about Brexit

Aside 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.

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Pound under pressure as Northern Ireland high court passes judgement on Brexit

The pound has another wobble 28 Oct

  • High Court says ruling on royal prerogative use to trigger Article 50 relates only to NI law not England
  • court rejects all the applicants arguments and finds in favour of govt
  • not viable that NI veto Brexit for all of UK
  • rejects argument that NI govt should pass legislative consent b4 Article 50 triggered
  • the specific provision on consent of the people of NI is only required re whether it's part of UK or re-unification

That's the story that's being cited for the drop. Reader Biscotti highlighted the event earlier in the comments section.

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UK High Court to rule on Brexit tomorrow (Thursday)

Reuters reporting that the announcement will be made at 10.00 GMT Thursday

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UK could still change its mind over Brexit after triggering Article 50

So says the man who drafted it, John Kerr, talking to the BBC 3 Nov

GBP getting some support on the headline just published by Reuters.

No 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.

Today's UK High Court ruling on whether a parliamentary vote is need before even triggering Article 50 is due at 10.00 GMT      

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