Top stories

  • BoE’s Mark Carney warns ‘no-deal’ Brexit would be “worst outcome”
  • UK Finance publishes regional mortgage lending trends
  • South Korean candidate Kim Jong-yang appointed head of Interpol

Stat of the day

300 – the number of companies that have signed up to the Treasury’s Women in Finance Charter.

BoE’s Mark Carney warns ‘no-deal’ Brexit would be “worst outcome”

Bank of England governor Mark Carney has warned MPs on the Treasury Committee that leaving the EU without a deal would be the “worst outcome”, adding that it would result in “lost output, lost jobs, lower wages and higher inflation” (The Times, p7, £ and CityAM, p5). Carney repeated his warning that interest rates could rise in the event of a “no-deal” Brexit (Sky News, online only). He also welcomed the draft withdrawal agreement published last week, including the proposed continuation of current supervisory cooperation with EU authorities, which he described as “absolutely essential given the size and complexity of the UK’s financial system” (Daily Telegraph, B3, £). Meanwhile Sir Jon Cunliffe, the Bank’s deputy governor, said legal certainty over cross-border derivative contracts is needed by mid-December to enable UK-based clearing houses to continue serving clients in the EU (Bloomberg, online only).

It comes as prime minister Theresa May has reportedly revived proposals for a technical solution to the Irish border question in order to avoid the need for a controversial backstop, ahead of talks with European Commission President Juncker today (The Times, p7, £). The Daily Mail (p2) reports that the Conservative chief whip Julian Smith has privately told the prime minister that she needs to extract new concessions from the EU in order to get the withdrawal deal through parliament. The prime minister is also expected to use an economic assessment of the long-term impact of the draft withdrawal agreement, due to be published next week, to try to win over sceptical MPs (Financial Times, p3, £).

UK Finance publishes regional mortgage lending trends

UK Finance has today published its Regional Mortgage Lending Trends Update for the third quarter of 2018. The mortgage market in Northern Ireland saw significant growth, with lending to first-time buyers the largest sector by value as borrowers take advantage of the most affordable region in the UK. Remortgaging in Scotland increased by 18 per cent compared to the same period last year, following a period of strong growth. London remained resilient despite an uncertain economic environment, with first-time buyers in the capital reaching the highest level since 2015. Finally, the mortgage market in Wales remained steady, with overall house purchase activity consistent with the same period last year.

South Korean candidate Kim Jong-yang appointed head of Interpol

Kim Jong-yang, from South Korea, has today been elected president of Interpol by delegates at the organisation’s general assembly in Dubai (The Times, online only, £). Jong-yang had been acting president of the global police co-operation body, which helps coordinate efforts to tackle money-laundering, fraud and cyber-crime. Today’s result follows concerns that Russia’s candidate Alexander Prokupchuk, an alleged former KGB agent, could have been appointed to the position (BBC News, online only). Leading UK politicians had put pressure on the government to reconsider its role in Interpol if Prokupchuk were to win (Guardian, p36.

Latest from UK Finance

Sonia Sedler, Managing Director (EMEA), Sutherland, guest blogs on why the future of mortgage tech hangs on a collaborative, hybrid approach.

News in Brief

Economic Secretary John Glen has given a speech calling for a “cultural shift” to help tackle gender inequality in the financial services industry (Daily Telegraph, p9, £).

The incoming head of the European Central Bank’s Single Supervisory Mechanism Andrea Enria has said his first priority will be to clean up banks’ balance sheets, warning that unless this is done the eurozone’s banking union may not survive another crisis (Reuters, online only).

Around three million homeowners will still be paying off their mortgage during retirement, according to research by broker L&C mortgages (Daily Mail, p19).

Manufacturing activity picked up in the quarter to November, according to the latest monthly CBI Industrial Trends Survey (CityAM, P10).

Two in three London buyers have been “gazumped” on a house purchase in the past year, according to a survey by estate agent Emoov (CityAM, p11)

What the commentators say

Katherine Griffiths, banking editor at The Times (p47, £), highlights the importance of the Bank of England’s upcoming economic assessment of the Brexit withdrawal. She describes how the analysis will be released a week or two before Parliament votes on Theresa May’s deal, and may help the prime minister’s efforts to “push her deal over the line”. Griffiths adds that the Bank’s stress test results published next week may also attract criticism, as they are expected to reveal individual banks still do not have enough adequate capital to withstand another crisis. She concludes that the Bank will be crucial in ensuring MPs understand how robust the economy is before they vote on the withdrawal agreement.

Writing in City AM (p25), Tracey Blackwell, chief executive of Pension Insurance Corporation, says that to rebuild public trust, the financial sector must tackle the cost of intermediation. Blackwell claims that reducing this cost should lead to a more cost-efficient financial services industry overall, creating jobs and growth, and helping improve the image of the financial industry.

Calendar

  • Prime minister Theresa May meets European Commission president Jean-Claude Juncker to discuss Brexit deal
  • UK Finance Regional Mortgage Trends
  • Treasury Committee session with HMRC
  • HM Treasury forecast for the UK economy

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

News in brief – 21 November 2018