Top stories

  • Treasury to publish analysis on economic impact of Brexit
  • FCA reports rise in cyber attacks and IT outages

Stat of the day

340,500 – The number of UK businesses trading internationally in 2017, up by 16,000 on the previous year, according to the Office for National Statistics
https://www.ons.gov.uk/releases/annualbusinesssurveygreatbritainnonfinancialbusinesseconomy2017exportersandimporters.

Treasury to publish analysis on economic impact of Brexit

The Treasury is set to publish economic forecasts today showing that the UK’s GDP will be around 7.6 per cent lower in 15 years’ time under a ‘no-deal’ Brexit scenario than if it had remained in the EU, according to the Daily Telegraph
https://www.telegraph.co.uk/politics/2018/11/27/theresa-may-accused-rehashing-project-fear-treasury-says-uk/ (p1, £). This compares to a predicted economic hit of between one and two per cent of GDP under the so-called Chequers agreement, which forms the basis of the government’s deal, and 1.4 per cent under the Norway option. Speaking on BBC Radio 4’s Today programme this morning, the chancellor Philip Hammond admitted that the current deal would leave the UK economy worse off, but emphasised it would bring political benefits (BBC News
https://www.bbc.co.uk/news/uk-politics-46366162 ,online only). The chancellor also hinted that the government has begun its contingency planning should it lose a vote on the proposed Brexit deal scheduled for 11 December, stating that the country would be in “uncharted political territory” (The Guardian
https://www.theguardian.com/business/2018/nov/27/labour-plan-to-give-customers-of-big-firms-vote-on-boardroom-pay, online only). A report in The Sun
https://www.thesun.co.uk/news/brexit/7843364/theresa-may-commons-200-vote-defeat-brexit-deal/ (p1) claims that the deal could be defeated by up to 200 votes, with 98 Conservative MPs having publicly declared their opposition to the proposed agreement.

It comes as US ambassador Woody Johnson downplayed remarks by President Trump that the current deal could hamper future trade between Britain and the US (The Times
https://www.thetimes.co.uk/edition/news/we-won-t-rain-on-your-brexit-parade-us-envoy-assures-may-cp5j03fsv, p6, £). Writing in The Times Red Box
https://www.thetimes.co.uk/edition/news/trump-is-clear-if-britain-takes-back-control-of-trade-you-will-be-at-the-head-of-the-line-8t3hxk2m6 (online only), the ambassador says: “The president has always said that Brexit is for the British people to decide but as he made clear again this week, he hopes there will be room for an ambitious trade deal with the United States”. Meanwhile the government’s white paper on immigration, which had been expected to be published next week, could reportedly now be delayed due to ongoing disagreement in cabinet (Daily Mail
https://www.dailymail.co.uk/news/article-6434407/Cabinet-war-post-Brexit-border-plan.html, p6). The Evening Standard
https://www.standard.co.uk/news/politics/cabinet-war-over-theresa-mays-bid-to-clamp-down-on-lowskilled-immigration-a4001276.html(online only) reports that a proposed clampdown on low-skilled migration is being opposed by cabinet ministers concerned about the potential impact on businesses.

FCA reports rise in cyber attacks and IT outages

The number of cyber attacks on financial institutions has increased by 18 per cent in the year to October, according to figures
https://www.fca.org.uk/publications/research/cyber-technology-resilience-themes-cross-sector-survey-2017-18 published yesterday by the Financial Conduct Authority (CityAM
http://www.cityam.com/269760/tech-outages-financial-firms-have-more-than-doubled-past, p6). The regulator also reported that the number of IT failures at banks and finance firms has more than doubled in the same period (Daily Mail
https://www.dailymail.co.uk/news/article-6435919/Cyber-attacks-major-banks-DOUBLED-year.html, p15). Megan Butler, Executive Director of Supervision at the FCA, claimed in a speech
https://www.fca.org.uk/news/speeches/cyber-and-technology-resilience-uk-financial-services that there is an “overconfidence bias” in financial services when it comes to dealing with cyber attacks and technological change (The Times
https://www.thetimes.co.uk/article/high-street-banks-too-confident-in-their-it-abilities-xhpbbldqs, p43, £).

Responding to the report, Dan Crisp, Director Technology and Digital Policy, UK Finance said:

“Cybercrime is costing UK firms billions and has the potential to seriously disrupt our economy and wider society. The FCA cyber and technology findings published today, highlights the urgent need for firms to be more effective in tackling the ever-increasing cybercrime threat.

“The Financial Services Cyber Collaboration Service (FSCCC) launched in October will bring the industry together to address cyber threats as they emerge, in a faster, more coordinated and effective way. Managing activities and focused operations across financial services organisations, the government and law enforcement in this way will improve the industry’s ability to detect, disrupt and protect against cyber threats. This will help to strengthen the resilience of the UK financial sector.”

Latest from UK Finance

Walter McCahon and Ali Imanat blog
//www.ukfinance.org.uk/walking-the-tightrope-balancing-fraud-prevention-privacy-and-the-customer-experience/ on balancing fraud prevention, privacy and the customer experience, ahead of our upcoming Economic Crime Congress.

News in Brief

A customer was targeted by fraudsters who impersonated his bank on Twitter. Katy Worobec, managing director of economic crime at UK Finance, warned that customers should “always question any phone calls, texts, tweets or emails out of the blue asking for your personal information in case it is a scam” (BBC News
https://www.bbc.co.uk/news/business-46309561, online only).

France’s markets watchdog, the Autorité des Marchés Financiers, is calling for a rethink of the EU’s Mifid II rules that mean fund managers have to pay for analyst research separately to trading fees (Financial Times
https://www.ft.com/content/74138918-f236-11e8-9623-d7f9881e729f, p16, £).

Average house prices have fallen in just one in 20 UK cities since the Brexit vote, according to the latest Hometrack Cities House Price Index (Bloomberg
https://www.bloomberg.com/news/articles/2018-11-28/u-k-s-regions-see-house-prices-drive-higher-in-spite-of-brexit, online only).

The Labour Party is considering plans that would give customers of big firms a vote on boardroom pay, reports The Guardian
https://www.theguardian.com/business/2018/nov/27/labour-plan-to-give-customers-of-big-firms-vote-on-boardroom-pay (p1).

Uber has been fined £385,000 by the Information Commissioner’s Office (ICO) after a data breach which led to the details of around 2.7 million UK customers being stolen (Daily Telegraph
https://www.telegraph.co.uk/news/2018/11/27/uber-fined-385000-watchdog-hackers-stole-sensitive-details-27m/, p3, £).

The UK has been ranked seventh in the world in the Legatum Institute’s latest global prosperity index
https://www.prosperity.com/feed/2018-key-findings-prosperity-growing-not-equally, up three places from last year (CityAM, p3, print only).

What the commentators say

Writing in The Times
https://www.thetimes.co.uk/article/open-banking-is-a-new-headache-for-big-players-but-not-their-customers-8jmbz8vb0 (p39, £), banking editor Katherine Griffiths warns of the threat from new agile online banks to the more traditional brick and mortar establishments. Since the adoption of open banking in January of this year, Griffiths notes the increasing ambition of challengers to provide financial products at a much faster pace. However, Griffiths notes a trust deficit with customers dealing with largely unknown institutions. She also asks how long it is before the main banks will be able to copy the best features of the challengers. In the end, Griffiths notes, it will be customers who gain.

Conservative MP Nick Boles argues that only the ‘Norway Plus’ option can save Brexit in this morning’s Financial Times
https://www.ft.com/content/833dd0b6-f168-11e8-938a-543765795f99 (p11, £). Boles claims that last week four cabinet ministers invited him to speak about the Norway option, which he claims strikes the right balance between respecting the 2016 referendum and preserving economic ties with the EU. Boles claims that should May’s deal be defeated in parliament, the ‘Norway Plus’ option of remaining in the single market offers a pragmatic solution.

Calendar

  • Treasury to publish economic forecast on Brexit scenarios
  • Bank of England stress test results, Financial Stability Report and report on EU withdrawal scenarios
  • Prime Minister Theresa May visits Scotland
  • European Commission progress report on the EU’s capital markets union

For a full list of upcoming UK Finance statistics releases, please click here
//www.ukfinance.org.uk/statistics/.

News in brief – 28 November 2018