Brexit, the economy and house prices part 5

gfplux

The whole atmosphere seems like fiddling while Rome burns.
Business hate the continuing uncertainty.
As I have said before every day small decisions are being made by both businesses and family's that mostly are not positive for Britain.
Britain and the EU appear to have slipped into that "phoney war" stage again. No dought (it is hoped) there are many things slowly moving forward out of the glare of publicity but with the countdown at 515 days contingency plans will be hardening.
This Brexit Blight of Uncertainty is more damaging to Britain than to the EU.

Eric_the_half_a_bee

gfplux wrote: »

Business hate the continuing uncertainty.

Funny. The businesses I speak to understand the nature of the negotiating process very well and think it's obvious that the UK-EU negotiations were always going to proceed like this.

Herzlos

Eric_the_half_a_bee wrote: »

Funny. The businesses I speak to understand the nature of the negotiating process very well and think it's obvious that the UK-EU negotiations were always going to proceed like this.

I can't tell if you're trying to disagree here, because nothing you've said contradicts him.

The EK-EU negotiation was always going to go like this, but businesses don't like uncertainty so are going to take the pessimistic approach. As a no deal is looking more likely, they need to take account of that risk. I doubt many of these decisions are going to be good for the UK in the short-medium term.

LHW99

businesses don't like uncertainty

I have heard this from a lot of sources - and yet, from experience, being in business means dealing with the uncertainties. Being able to chart a certain path in the business plan may help with the accountants and bank manager, but in reality it won't work out like that more than 50% of the time.

Herzlos

Big businesses spend a lot of time dealing with uncertainties to try and mitigate against them.

westernpromise

cogito wrote: »

It would be surprising if it was otherwise. Four of the major contributors to the EU, Germany, France, The Netherlands and Spain

Spain's not a net contributor, it's a net taker.
http://uk.businessinsider.com/brexit-eu-members-net-contributions-and-net-funding-2016-12

setmefree2

On Friday, as he presented upbeat third-quarter results, UBS’s chief executive Sergio Ermotti also sounded cheery about Brexit. It was now becoming “more and more unlikely”, he said, that the Swiss group — one of the biggest investment banks in the City of London — would put into practice its original Brexit plan to move 1,000 of its 5,000 UK staff to the EU27. Over the weekend it emerged that barely 250 of those jobs are set to go. Brexiters have always rubbished doomsday predictions that more than 70,000 of the City’s half a million roles in financial and related roles could leave as a result of the UK exiting the EU. So is UBS’s changed stance an admission that original estimates were overblown? Or does the bank’s new-found optimism, and its explanation of “regulatory and political clarifications”, reflect a genuinely brighter outlook?

The truth is that despite the apparent stalemate in UK-EU talks, there have been two crucial developments in recent weeks. First, thanks to prime minister Theresa May’s conciliatory Florence speech last month, it is now a common assumption in the City and elsewhere that there will be a “standstill transition period” of at least two years beyond the formal Brexit enactment date. This removes the March 2019 “cliff-edge” — and with it the need for swift and dramatic restructurings. Second, it seems that UBS, like other City peers, has been reassured by EU regulators that they will not take a hard line on requiring traders and risk managers to be located on the ground in EU markets. The reason? “Back-to-back trading” will be allowed, at least for an initial period.

This practice might sound like something schoolchildren would do with their sweets at playtime. But back-to-back is a serious, if abstruse, business practice. It has long been a crucial mechanism for the build-up of the City’s status as a global financial centre. It is why big US banks such as Citigroup and Goldman Sachs have been able to book vast chunks of their global operations (business actually done in Africa, Asia and Latin America) via UK subsidiaries. In simple terms, back-to-back means that transactions done on the ground for a client in Thailand or Tobago, for example, can be replicated through a matching trade in the UK unit. The draw for the banks is efficiency. By shifting the risk to a single UK balance sheet, they centralise the bulk of capital needs, risk management and staffing in one location.

Until now, the back-to-back tactic has not been necessary for European business, given the UK’s membership in the EU. But post-Brexit, it could become a key way of preserving something like the current set-up, without requiring the duplication of capital and roles, or shifting staff unnecessarily. The question, though, is how permanent such a set-up would be. And that, of course, will depend on political negotiations. The widespread hope in the City is that its blueprint for a financial services free trade deal with the EU — floated by former City minister Mark Hoban a few months ago — will first be adopted as UK policy, and then agreed by the EU27.

If that were to happen, it would create a system of mutual market access and mutual recognition of regulation, which could all but preserve the status quo, potentially making back-to-back transactions unnecessary. A less perfect alternative would call for mutual regulatory recognition and a long-term framework for back-to-back transactions.

The potential snags, though, are twofold. First, policymakers will need to be convinced that the back-to-back system is not open to abuse. In January, Deutsche Bank agreed to pay US and UK regulators $630m to settle a probe into alleged mirror trades used to launder $10bn out of Russia. Mirror trades are a form of back-to-back transaction designed to launder money from one country to another. Even more challenging, political leaders in countries that sense a competitive opportunity from Brexit will need to be convinced not to design policy that forces mass staff moves. Duplication of jobs and capital would make banks less efficient and raise the cost of banking services for European clients. And hopes of winning US banks’ global back-to-back business are overdone — that is more likely to shift to New York than to Frankfurt or Paris. On the current evidence, the banks-and-Brexit optimism spurred by UBS’s latest pronouncement might be perfectly justified. But Europe is still capable of shooting itself in the foot.

https://www.ft.com/content/2bb50314-bd70-11e7-b8a3-38a6e068f464

setmefree2

Brexit talks hit fresh stalemate as UK negotiators delay signing up to ‘pointless’ talks with the EU

Britain's negotiating team are yet to agree to the timetable for new face -to-face rounds amid fears they would go in circles without movement from Brussels.
Officials are concerned that talks ending in stalemate again would kill any the "new momentum" after Theresa May's Florence speech and last week's better than expected meeting of EU leaders.
Despite promises to “speed up” the process after this month's EU Council, a new wall has been hit over how many talks to have before the next meeting of EU leaders in mid-December.
UK negotiators believe no further progress can be made at any such talks without our future trade agreement with the EU also being on the table.

A government source said: “Fundamentally the underlying issues haven’t changed - there are only so many times we can sit opposite each other and keep saying that same thing.”

https://www.thesun.co.uk/news/4794843/brexit-talks-hit-fresh-stalemate-delayed-talks/

setmefree2

Way to go guys - truly undermining the government. I hope Barnier finds time to meet up with some of our Arch Brexiters - those who want to leave the EU on WTO terms and not give the EU a penny.

Michel Barnier meets with UK arch-Remainers in Brussels as official talks stay deadlocked The meeting will consider 'the direction of talks' and 'future scenarios' for the UK

The EU’s chief negotiator held meetings with British arch-Remainers in Brussels on Monday as frustration at the deadlock in the official Brexit talks continues to mount.
A cross-party group of Nick Clegg, Ken Clarke, and Andrew Adonis met with Michel Barnier and EU commissioner Pierre Moscovici in the EU capital, where The Independent understands, they discussed “future scenarios” and “the direction of talks”.
The delegation was organised by former deputy prime minister Mr Clegg, who has known Mr Barnier for decades since they both worked in the Commission together. The group aims to show Brussels that the British public are not united behind Theresa May’s Brexit strategy.

The meetings follow discussions between EU chiefs and Jeremy Corbyn in Brussels earlier this month. That rendezvous took place while Theresa May attended a European Council summit in the city, where she was not given an opportunity to discuss Brexit face-to-face with other EU leaders.

http://www.independent.co.uk/news/uk/politics/brexit-michel-barnier-nick-clegg-uk-remainers-brussels-meeting-talks-deadlock-theresa-may-eu-a8027431.html

setmefree2

'We're the Rebels' say Clegg, Clarke and Adonis before meeting EU's chief Brexit negotiator

For Adonis read Tony Blair by the way.

Nick Clegg, Ken Clarke and Lord Adonis, three of Britain’s leading Europhile politicians, were today accused of trying to undermine Brexit after meeting with Michel Barnier, the European Union’s chief Brexit negotiator.

But Nigel Farage, a MEP and former leader of the UK Independence Party, branded the trio “an Unholy Trinity” hell bent on thwarting the referendum.

http://www.telegraph.co.uk/news/2017/10/30/rebels-say-clegg-clarke-adonis-meeting-eus-chief-brexit-negotiator/