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BANGKOK 19 January 2019 11:48
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Brexit takes toll on Britain's financial sector, outlook weak

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Brexit takes toll on Britain's financial sector, outlook weak

By Huw Jones

 

2019-01-14T043617Z_2_LYNXNPEF0D07W_RTROPTP_4_BRITAIN-EU-BANKS.JPG

FILE PHOTO: People walk through the Canary Wharf financial district of London, Britain, December 7, 2018. REUTERS/Simon Dawson/File Photo

 

LONDON (Reuters) - Uncertainty over Brexit and the economy have led demand for Britain's financial services to shrink for the first time in five years, with no immediate sign of an improvement, a survey by business group CBI and PwC showed.

 

And profitability in the sector which raises most tax in Britain was flat for the third quarter in a row in the three months to December 2018, the survey released on Monday said.

 

The survey of 84 firms said demand is expected to continue falling during the quarter to March, with profitability also expected to drop for the first time in three years.

 

"A combination of macroeconomic and Brexit uncertainty, regulatory compliance and global market volatility are taking a toll on the UK's financial services sector," CBI Chief Economist Rain Newton-Smith said.

 

"The persistent weakness in optimism and the deterioration in expectations sound a warning for the outlook."

 

Britain's parliament is expected to vote on Tuesday to reject the divorce settlement with the European Union, an outcome that would prolong uncertainty for the financial sector.

 

But many banks, insurers and asset managers who use Britain as their EU base are opening hubs in the bloc to avoid being locked out of the continent if Britain crashes out of the EU in March without a deal.

 

The survey painted a mixed picture for the sector, with business holding up among insurers, while volumes were flat or easing at banks, building societies and specialist lenders.

 

The survey found a "striking loss of momentum" at investment managers, who reported the steepest fall in activity since the financial crisis a decade ago.

 

A large majority of investment management firms surveyed were less optimistic about their prospects in coming months, with business from overseas customers taking a hit.

 

It marks a reversal for investment management, which has grown well since the financial crisis as risk-averse banks draw in their horns. It now faces volatile asset prices and weaker demand, the survey showed.

 

Despite an overall gloomy tone, headcount in the financial sector is expected to rise in the current quarter and investment intentions remain broadly stable, the survey said.

 

(Reporting by Huw Jones; Editing by Alexander Smith)

 
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-- © Copyright Reuters 2019-01-14

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They only quoted the CBI and PwC...
 
Fact is British and None British companies with interests in the UK have taken a big hit over Brexit, Hopefully we will see a recovery Brexit nonsense is dead and buried.
 
I take it you mean when the remainers shut up and let Brexit go ahead.

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2 hours ago, welovesundaysatspace said:

...and while (presumably) 99.9% of businesses, economists, and politicians agree that a (no-deal) Brexit will be bad, some hardcore Brexiteers keep trying to tell us they know better. 

Big "presumably" there.

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2 hours ago, RichardColeman said:

The problem is a staunch remoaner doing the Brexit talks, what do you expect ? 

Absolutely. Having vowed "no deal is better than a bad deal", she is now trying to push through arguably the most disastrous excuse for a deal in our history.

 

Unless she wants a revolution on her hands, she had better go back to Brussels and tell Junker and his cronies where they can stick it.

 

It's one thing to bend, but we don't have to suck.

Edited by Krataiboy
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6 minutes ago, welovesundaysatspace said:

True, it might actually be 99.88% or even 99.79%. 

 

In your dreams.

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43 minutes ago, ivor bigun said:

I take it you mean when the remainers shut up and let Brexit go ahead.
 

Nice to hear democratic views like yours. Those "Remainers" were just a few: 48,11 % of all voters. Of course a lot less as the overwhelming, landslide supporters of Brexit with a eclattant 51,88 %. A 27 % to stupid or too lazy to vote.

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3 hours ago, anterian said:

Reuters has in many articles shown itself to be anti Brexit, so I take all its comments with a large pinch of salt.

When I see how many financial institutions from London already opened an office in Amsterdam, Frankfurt, Paris etc. I am curious how many will follow. Also out of other services and industries. Maybe the U.K. turns back to an agricultural society, as they wanted for Ireland, during and after the potato disaster mid 19th century.

Edited by puipuitom

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