Tag Archives: Brexit

​British retail sales rebound sharply post Brexit vote

Retail sales in Britain, a key driver of the economy, rebounded 1.4 percent in July from June’s drop, official data showed Thursday, indicating no immediate fallout from Brexit but analysts warn of a tough year ahead.

Sales by volume rose far higher than expected following a 0.9-percent drop in June that had been caused by wet summer weather, according to the Office for National Statistics.

The ONS noted however that all sectors showed sales growth in July amid warmer weather, “with the main contribution again coming from non-food stores”.

Analysts added that the retail sector was boosted by tourists profiting from a sharp fall in the pound since Britain voted on June 23 to leave the European Union.

Experts are meanwhile expecting a tougher economic climate for Britain in the months ahead.

Thursday’s “data suggests that consumer spending remained resilient in aftermath of the referendum”, said Anna Leach, head of economic analysis at the CBI, Britain’s main business lobby group.

“Clothing retailers and department stores had a particularly good month, buoyed by better weather and a weaker pound encouraging tourists to spend.

“But looking ahead, we can expect weaker spending. The recent fall in the pound will push up the cost of everyday purchases over the coming year, which will eat into (British) households’ spending power,” Leach added in a statement.

Following Thursday’s data, London’s benchmark FTSE 100 stocks index and the pound were up slightly in morning deals.

The Bank of England, which looks into the future when setting monetary policy, slashed its main interest rate to a record-low level of 0.25 percent from the beginning of August — and announced a vast stimulus package to combat economic fallout that it expects to occur from Brexit.

Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown, said that while “it’s important not to hang too much significance on one month’s set of figures… the Bank of England might start to feel uncomfortable about its interest rate cut if economic data continues to follow this robust trend”.

‘Set for a tough year’ –

Separate official data on Wednesday revealed a surprise drop in British claims for unemployment benefits in July.

However Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that “with firms intending to stop hiring and inflation set to soar, the high street is set for a tough year”.

Another set of official data this week showed that Britain’s annual inflation rate edged higher to 0.6 percent last month, while it is set to climb further as the weak pound raises import prices.

Sterling slumped to 31-year lows against the dollar after the Brexit vote and has struggled to recover.

Markets dislike uncertainty and a report from the Sunday Times newspaper said that Britain’s departure from the EU could be delayed until late 2019, as civil servants struggle with the task and French and German elections risk holding up the start of exit negotiations.

Prime Minister Theresa May’s government has indicated that it is planning to trigger Article 50 of the EU’s Lisbon Treaty, which would start a two-year countdown to leaving the bloc, early in 2017.

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  4. Source: Vanguard

Graham Brady, Britain should negotiate Brexit before any election


Britain should negotiate the terms of its exit from the European Union before holding its next parliamentary election, the chair of the committee of Conservative lawmakers told Sky News on Monday.
Prime Minister David Cameron said he would resign after Britons voted to leave the EU last week, and earlier the Conservative committee recommended his successor should be in place by Sept. 2 at the latest.
Asked if there should be an early parliamentary election following the selection of that new leader, chairman of the 1922 committee of Conservative lawmakers Graham Brady said the negotiation with the EU should be carried out first.
“We have just been given a very clear steer, direction by the people of Britain … we have a big complicated task to accomplish, ” he said.
“I think it is entirely reasonable to expect that the government should embark on that, get on with that, seek to negotiate as good an outcome as we can before the people then are asked to approve or reject that in a general election. ”

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Source:  Pulse

In Germany Most industrial firms say Brexit won’t hurt their business – Ifo


Nearly two-thirds of German industrial companies say a British exit from the
European Union won’t hurt their business, a poll by the Ifo economic institute showed on Wednesday, albeit underlining differences in size and sector.
According to the survey, 61 percent of respondents said a Brexit would have no negative consequences for their business while 38 percent said it would cause damage.
Larger companies, those with more than 500 employees, were more concerned, with 53 percent of them saying a British exit would have negative consequences for their business.
Looking at different sectors, firms in the electronics, automobile and metals industry were most concerned while food and textile companies were the least unsettled, Ifo said.
The head of the BGA trade association said on Monday German exports will grow less than expected this year due to external risks, including a British exit from the EU and uncertainties ahead of elections in the United States and France – Germany’s two most important trading partners.
Britain is Germany’s third most important export destination. In 2015, German companies exported goods worth some 89 billion euros ($100 billion) to Britain . At the same time,
Germany imported British goods worth some 38 billion euros, leaving a trade surplus of around 51 billion euros.
With a total trade volume of 127.5 billion euros, Britain is Germany’s fifth biggest trading partner behind the United States, France, the Netherlands and China. For the UK, Germany is the most important trade partner, ahead of the United States.
The DIW economic institute DIW has warned a British exit would likely lead to higher export tariffs, reducing German trade and knocking up to half a percentage point off growth in Europe’s biggest economy next year.

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Source: Pulse

Michel Sapin French finance minister says Brexit would affect London as finance hub


Some French banks had told him Brexit would have consequences for them and that some of their activities based in London might not carry on as they were, he said.

London’s status as a global financial centre would probably be affected to some extent if Britain votes to leave the
European Union in next month’s referendum, French finance minister
Michel Sapin said on Thursday.
“The City (of London) is a considerable financial force and I don’t think that (Brexit) would transform all the elements that constitute its strength ,” Sapin said through a translator during a visit to London.
“But I don’t think that it would be without effects which would have to be seen .”
Some French banks had told him Brexit would have consequences for them and that some of their activities based in London might not carry on as they were, he said.
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