Top stories

  • EU to revise mandate for Brexit deal
  • EU to tighten rules on money laundering
  • Rented properties should face MOT-style tests

Stat of the day

1.4 per cent – the amount GDP is expected to increase by in the event of a good Brexit deal, according to KPMG’s first quarterly economic outlook report.

EU to revise mandate for Brexit deal

The EU is preparing to give its chief negotiator, Michel Barnier, new instructions to help close a Brexit deal with Britain, according to The Financial Times (p1,£). It’s reported that an informal summit in Salzburg on September 20th between the EU’s 27 remaining leaders will see the planned timing, the Irish border and the ‘political declaration’ on future relations discussed. If approved, the move to update Mr Barnier’s instructions would help to “serve as a sort of mandate to do the deal” according to a senior EU diplomat. If an agreement is reached, diplomats expect a final set of guidelines to be formally adopted in October.

Meanwhile, BBC News (online only) reports as many as 80 Conservative MPs are prepared to vote against the Prime Minister’s Chequers plan. Former Brexit minister, Steve Baker said the level of opposition means Theresa May faces a “massive problem” at this month’s party conference. He told the Press Association the party will suffer a “catastrophic split” if Mrs May sticks with the Chequers deal. This follows on from Boris Johnson, former Foreign Secretary, who yesterday accused the Prime Minister of pursuing a Brexit strategy that had strapped a ‘suicide vest’ to the country (The Financial Times, p2, £).

EU to tighten rules on money laundering

Brussels will seek to toughen the powers of EU agencies to crack down on money laundering and terrorist financing in the wake of high profile scandals that have highlighted Europe’s deficiencies in tackling criminal cross-border money flows, according to The Financial Times (p1, £).

It’s reported the European Commission is working on proposals that would give the European Banking Authority (EBA), the EU’s banking regulator, greater enforcement powers and more resources to investigate the activities of banks involved in illicit financing, according to senior officials. In separate plans, the commission wants to give the European Public Prosecutor’s Office (EPPO), a recently created pan-EU agency, powers to launch investigations into the financing of terrorist activity across its member states from 2025. “We need a single EU-wide agency to ensure tough, effective and consistent enforcement,” said Bruno Le Maire, France’s finance minister.

Rented properties should face MOT-style tests

Rented homes should be made to pass MOT-style tests to ensure they are fit to live in, according to an academic review of the private rental sector in England funded by the Nationwide Foundation (The Times, p4, £). The report argues that the test could bring together and simplify existing regulation such as electrical and gas safety certificates and help drive up standards in rented homes (Daily Mirror, p7). The MOT test would be carried out by independent inspectors while landlords could claim it as a tax-deductible business cost.

Latest from UK Finance

Walter McCahon, Manager, Technology & Digital Policy at UK Finance, discusses privacy and data protection post GDPR.

News in Brief

The Times (p6, £) reports British Airways is under threat of legal action over the data breach that led to the theft of up to 380,000 passengers’ bank details last week.
Consumers are urged to follow the advice of the Take Five to Stop Fraud campaign.

Governments need more weapons to fight the next economic downturn, since central banks’ firepower is likely to be limited, Eric Rosengren, president of the Federal Reserve Bank of Boston has warned (The Financial Times, p6, £).

Finance leaders have predicted that 2018 could mark a turning point for gender diversity in the sector (The Financial Times, p15, £).

Business confidence has fallen to a 15-month low, with services firms being “particularly gloomy”, according to a new report by business advisers BDO LLP (The Independent, online only).

London house prices are set to drop 0.7 per cent next year, marking the lowest annual rate of growth in the UK’s property market since the 2008 financial crisis according to KPMG’s UK quarterly economic outlook report (City AM p2).

What the commentators say

In The Financial Times (p11, £), Tom Keatinge, director for financial crime and security at the Royal United Services Institute, writes on how cross-border money laundering cannot be fought with domestic tools. Keatinge argues we appear no closer to turning the tide against illicit money flows today than when the Financial Action Task Force (FATF) was founded in 1989, the global response remains trenchantly national, hindered by complex cross-border mutual legal assistance treaties and a lack of information-sharing. Mr Keatinge concludes that “as long as we fight a cross-border challenge with a nationally-based response, the only ones benefiting are crooks, kleptocrats and criminals”.

Business Editor Oliver Shah argues in the Sunday Times (online only) that the public resentment caused by the banking crisis a decade ago has encouraged politicians and regulators to introduce “nakedly political” measures to regulate the financial sector. He suggests that while increased capital requirements were desirable and have made the industry safer and more stable, the ring-fencing of retail banks from investment banks will create huge costs with no discernible benefits to customer. Shah contrasts the situation in the UK with that of the US and concludes that Britain’s banks are now “seriously over-regulated,” negative impacting on tax revenue and the broader economy.

Calendar

  • GDP figures published
  • TUC Congress continues
  • Carwyn Jones sets out how Brexit will affect Wales

For a full list of upcoming UK Finance statistics releases, please click here.

News in brief – 10 September 2018