Today it was the turn of the OECD “The OECD has slashed its 2017 growth forecast for the UK in half as a result of the Brexit vote and warned of ‘very high’ uncertainty ahead … The multilateral economics institution had projected UK GDP growth next year of 2 per cent in June, but today reduced that to just 1 per cent in its latest Interim Economic Outlook … That was easily the largest downgrade for any major advanced economy”.
Still, at least their 2016 forecast growth was up from 1.7% to 1.8%, so not all doom and gloom. But then came news from the Bank of England – also today: “The Bank of England’s summary of business conditions, based on reports from regional agents, said ‘investment intentions had fallen since the EU referendum’ and pointed to ‘broadly flat business investment over the next year’”. And there was more.
“In stark contrast to July’s agents’ report, which found employers were buoyant about their prospects, the September report said employers were circumspect about taking on new staff and in many sectors were only hiring ‘where the business case was strong’”. We should expect that to feed through into the unemployment figures, although seasonal jobs may offset any increase. But then came the FTwith bad news for the City.
After pointing out that “More than 8,000 financial services companies based in the EU or the European Economic Area rely on single market passports to do business in Britain”, Martin Arnold’s report tells “There are growing fears that when it leaves the EU, the UK will lose the passporting rights that allow financial services companies licensed in one EU state to work across the bloc, rather than having to win licences in individual countries”.
And while noting “The UK accounts for 40 per cent of Europe’s assets under management and 60 per cent of its capital markets business, according to a report for the British Bankers’ Association” he adds “Most big US, Japanese and Swiss banks use London as their hub for passporting into other EU markets. Since the Brexit vote in june they have been drawing up contingency plans for moving some business out of the UK”.
Arnold then concludes with this chilling statistic: “The total number of passports held by UK groups was 336,421 because many have multiple passports for different sectors in different countries, the FCA said. The total held by European businesses for access to the UK is 23,532”. Or, in other words, if the passporting scheme were to end as a result of Brexit, it would hurt us a lot more than it would hurt them.
But all you hear from the Europhobes is that there’s nothing to worry about, it’s not really happening, the news is all good, and we should stop talking the country down. Someone needs to get a grip on reality, and fast.
This article first appeared in Tim denton’s blog at zelo-street.blogspot.com
