- Business leaders call for People’s Vote on Brexit
- US hits Iran with ‘toughest ever’ sanctions
- Surge in demand for Help To Buy from high earners
Stat of the day
31.6 per cent – the proportion of UK employees that experienced less than or equal to one per cent nominal earnings growth in 2017, according to new figures from the Office of National Statistics.
Business leaders call for People’s Vote on Brexit
More than 70 business leaders (City AM, p2) have joined calls to urge the prime minister to agree to a second referendum on the final Brexit deal, in a letter to The Sunday Times. Signatories including former chairs and CEOs of Lloyds of London, Sainsbury’s, BT and Standard Chartered argued that “the uncertainty over the past two years has already led to a slump in investment, which will make our country poorer”. Meanwhile 1,500 leading lawyers have signed a letter questioning the validity of the 2016 referendum in today’s Guardian (p9).
Boris Johnson writes in The Sun (p10-11) today that the UK will become a “non-voting EU colony” as we face a £40 billion Brexit divorce bill. The former foreign secretary urged ministers to turn their back on the prime minister. Meanwhile, Theresa May spent Sunday calling colleagues to reassure them she was not going to strike a deal with the EU without reaching wider agreement with her party (Times, p8, £). According to the (Guardian, p1), the prime minister’s chances of reaching a deal with the EU over Ireland is 50-50.
Financial services in the City have reached a consensus over Brexit, reports the (Financial Times, online only, £), with issues all but settled as plans for future free trade agreement were reassessed. In London this morning UK Finance CEO Stephen Jones chairs the panel at the 3rd UK Financial Services BREXIT and Beyond Summit, the topic being “What will be the long-term basis for trade in financial services between the UK and the EU?”
US hits Iran with ‘toughest ever’ sanctions
The United States has unleashed its ‘biggest ever’ sanctions on Iran (BBC, online only), reinstating all sanctions removed in the 2015 nuclear deal. It is set to hit the critical areas of exports, shipping and banking, although US Secretary of State Mike Pompeo insists it won’t hurt the Iranian people (Guardian, online only) and that sanctions would be gradual rather than immediate, as Iran warned of a military build-up in response (Times, p30, £). US Treasury secretary Steven Mnuchin argued in the Financial Times, (p13, £) that “renewed sanctions will push Iran towards a better nuclear deal”. Meanwhile, European governments are preparing measures to safeguard trade with Iran in the event of sanctions (Financial Times, p8, £), a subject mentioned by Justine Walker, Head of Sanctions Policy at UK Finance, in a May blog post.
Surge in demand for Help To Buy from high earners
A report from the Ministry of Housing, Communities and Local Government found that two in five Help To Buy applicants have a household income in excess of £50,000 (Times, p18, £), suggesting that a large number of Help To Buy applicants may not necessarily need the assistance to buy a first home. Meanwhile, the government’s new flagship housebuilding policy, announced by the prime minister at last month’s Conservative party conference, “will not deliver a single new home in more than half of the local authorities in England” including many deprived areas (Independent, online only), because of account restrictions.
Latest from UK Finance
In today’s UK Finance blog post, Simon Hills poses the question: Are the proposed changes to the Definition of Default necessary?
News in Brief
The financial outlook is the worst since the 2008 crash, according to today’s Business Confidence Monitor survey from the Institute of Chartered Accountants in England and Wales (ICAEW), giving the chancellor his ‘first big setback since the Budget’ (Times, p35, £).
British PLC profits set a new record of £217.9 billion after an increase of almost 14 per cent in the third quarter of the year (City AM, p5).
New rates for the Living Wage announced today give more than 180,000 an inflation-beating pay rise (Guardian, p29).
It is harder for new digital banks to challenge in the market despite efforts to boost competition, says Starling Bank founder and chief executive Anne Boden (Express, p42).
Many firms are now switching to a four-day week to increase productivity (Guardian, online only).
What the commentators say
Writing in The Times (p39, £), Columnist Oliver Kamm analyses remarksmade by the Bank of England governor Mark Carney last week that interest rates could rise even if there is an economic slowdown, as a result of a ‘no deal’ Brexit. Kamm says that it is not obvious what the right policy response would be in such a scenario, as the UK could be faced with both lower economic output and higher inflation. This means the Bank would be faced with the conflicting objectives of boosting output and employment in the short run and stabilising inflation in the long term.
Christian May, editor of City AM (p2), writes that a second referendum on Brexit would not heal the UK’s divisions, but would instead cause a fresh wave of uncertainty. He argues that asking people to vote again would be a betrayal of voters’ trust, and businesses would be faced with more uncertainty after having begun to adapt to the result of 2016. He concludes that Britain will remain an attractive place for investment post-Brexit and the UK should focus on adapting to a different future, rather than seeking a return to the past.
- Living Wage Week: new rates for UK and London announced
- UK Finance CEO Stephen Jones chairs panel at City and Financial Brexit Summit
- Share Centre publishes Profit Watch UK report
- Treasury Committee questions Chancellor Philip Hammond on his 29 October Budget
- Eurozone finance ministers meet ahead of EUROFIN
- UK Services Purchasing Managers’ Index report from Markit/CIPS
For a full list of upcoming UK Finance statistics releases, please click here.