CARNEY: UK FINANCIAL SYSTEM IS BETTER PREPARED FOR 'NO-DEAL'

Mark Carney, governor of the Bank of England, yesterday suggested that ?real progress in the financial system? meant that the UK leaving the EU without a deal may not damage the economy as much as had been feared (The Times, £, p12). He said that preparations made by the government and companies on both sides of the channel, such as simplified customs check procedures and the publication of an emergency UK tariff regime for EU imports, would also lessen the likely impact of a ?no-deal? departure (The Guardian , p37). However, he emphasised that the UK would still most likely fall into a 'severe recession?, albeit with a 5.5 per cent decline in GDP rather than the eight per cent that had previously been predicted (Telegraph, £, p8).

UK Finance has published a ?no-deal? Brexit FAQs guide to help answer questions about the impact of a ?no-deal? Brexit on financial services matters. Our Let's Talk Business campaign, launched earlier this year and supported by leading business groups, helps SMEs prepare for the potential changes brought about by the UK's departure from the European Union. 

BRITISH MANUFACTURING ACTIVITY CONTRACTS SAYS SURVEY

The UK industrial sector is facing its most negative outlook for over three years, according to a survey from a major trade body (The Times, £, p44). Make UK and accountants BDO said that domestic new orders fell in Q3 for the first time in three years while export order growth also weakened (Reuters , online only). Meanwhile, an IHS Markit/CIPS survey highlighted that British manufacturing activity contracted last month at the fastest rate in seven years, leaving the economy on course to shrink by 0.1 per cent in the three months to September, which would make two consecutive periods of negative growth (City A.M. p1, The Times , £, p41).

NEWS IN BRIEF

The chancellor, the Rt Hon Sajid Javid MP, has rejected demands from the UK Statistics Authority for immediate changes to the retail prices index (RPI), saying he would consult on whether to introduce them from 2025 (The Times, £, p44).

The Treasury has confirmed a 2.5 per cent real terms increase in funding for the security and intelligence agencies, with a particular focus on protecting the country from cyber threats (Financial Times , £, p4).

The European Central Bank (ECB) is to debate the effects of negative rates on eurozone banks (Financial Times, £, online only).

Government figures have revealed that although salaries in the UK's digital sector are 50 per cent higher than the national average, women earn just 79p for every £1 earned by men (City A.M., p10).

The general secretary of the Trades Union Congress (TUC) Frances O'Grady has said Britain needs to have a ?debt reality check?. It comes after TUC research found young people are disproportionately likely to be in debt, with 70 per cent of 18-34 year-olds having a type of unsecured debt compared to 33 per cent of those over 65 (The Guardian, p39).

China and the United States have agreed to hold high-level trade talks in early October in Washington, amid fears that an escalating trade war could trigger a global economic recession (Reuters, online only). 

WHAT THE COMMENTATORS SAY

Writing in the Daily Telegraph (£, B2), Ben Marlow points to today's announcement of record annual profits for the UK's largest housebuilder Barratt Developments, with 40 per cent of their sales coming from Help to Buy. Marlow suggests that sales and profits across the housebuilding industry have been increased by taxpayer money that was intended to help poorer households get onto the property ladder.

LATEST BLOGS

In our new blog Jo Causon, CEO of the Institute of Customer Service, focuses on what lies behind the key to customer excellence. 

LATEST VIDEOS

Our Director of Payments Becky Clements looks forward to next month's Digital Innovation Summit in association with KPMG UK, which takes place on 15 October in London. Watch here.