Tag Archives: Brexi

Brexit’s troubles for the UK’s financial center are just getting started: Learning | Brexit News | Instant News

About 7,400 jobs and $ 1.4 trillion in assets have been transferred or could be transferred to the EU from London, a New Finance study found.

More than 400 financial firms in the UK have shifted the combined trillion pound ($ 1.4 trillion) activity, staff and assets to hubs in the European Union because of Brexit, with more difficulties to come, according to a new study by New Financial think- tank.

“We think it is an underestimation and we expect the numbers to increase over time: we are only at the end of the Brexit start,” said the study published on Friday.

The EU has offered Britain little direct market access to financial services, which are not included in the bloc trade deal with Britain that went into effect in January.

“That access is unlikely to come, so it may be better for the industry to accept the damage from Brexit on the chin and focus rather than recalibrating the framework in the UK so that it is more adapted to the unique nature of UK finance. service industry, “said the study.

About 7,400 jobs have either been moved from the UK or have been created at new hubs in the EU, the study said. Bankers told Reuters news agency that some staff transfers had been delayed due to COVID-19 travel restrictions.

The total of 440 relocations was higher than anticipated and well above 269 in the 2019 New Financial survey. New Financial believes that the true number far exceeds 500.

Dublin, Frankfurt, Paris are the winners

Dublin emerged as the largest beneficiary with 135 relocations, followed by Paris with 102, Luxembourg 95, Frankfurt 63 and Amsterdam 48.

Dublin Irish Financial Services Center [File: Clodagh Kilcoyne/Reuters]

“The redistribution of activity across the EU has turned around 20 years in time,” the study said.

Banks have moved or transferred more than 900 billion pounds ($ 1.2 trillion) of assets from the UK to the EU, while insurance companies and asset managers have transferred more than 100 billion pounds ($ 138 billion) of assets and funds, reducing the UK’s tax base.

“We hope that Frankfurt will be the ‘winner’ in terms of assets in the long term, and that Paris will ultimately be the biggest beneficiary in terms of jobs,” said the study.

Amsterdam’s fall over London as Europe’s biggest stock trading hub since January has been the most visible sign of Brexit on the financial front.

The study estimates that 300 to 500 smaller EU financial firms could open permanent offices in the UK, far less than the prevailing estimate of around 1,000.

The city of London will remain Europe’s dominant financial center for the foreseeable future, but its influence will be eroded, risking a reduction in Britain’s annual trade surplus of 26 billion pounds ($ 35.8 billion) in financial services with the EU, the study said. added.


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EU, UK set a meeting on Northern Ireland trade rules | Instant News

BRUSSELS (AP) – European Commission Vice President Maros Sefcovic and UK Brexit Minister David Frost will hold talks Thursday in Brussels to discuss Northern Ireland trade rules, the EU said on Wednesday.

The meeting will take place a month after the EU began legal action against Britain, arguing the former member did not respect the terms of the Brexit withdrawal agreement and violated international law.

EU Commission spokesman Daniel Ferrie said Sefcovic and Frost would hold informal meetings to “examine ongoing technical work” and “to provide political direction for both teams on extraordinary issues.”

The two sides are trying to find a deal on trade rules in Northern Ireland amid rising tensions in a small region where Britain’s exit from the European Union has upset an uncomfortable political balance. Earlier this month, young Protestants and Catholics in Belfast threw bricks, fireworks and petrol bombs at police and each other during a week of violence.

Northern Ireland is part of the UK but remains part of the EU’s single market for goods after Brexit to avoid checks between Northern Ireland and EU member Ireland as the open Irish borders have helped support the peace process. But union members said the new check amounted to the creation of a border between Northern Ireland and the rest of Britain – something they fear ruined the region’s place in Britain.

In March, Britain decided to unilaterally extend a grace period to October for inspections of goods moving between Britain and Northern Ireland, a decision that led the EU to issue a formal notification to its former members. Britain was given one month to respond.


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Vacuum maker Dyson plans to employ 450 new roles in Singapore and the UK | Instant News

Dyson’s founder and chief engineer, Sir James Dyson, speaks on stage in New York City.

Jason Kempin | Getty Images Entertainment | Getty Images

British home appliance giant Dyson, known for its vacuum cleaners, will employ 450 new staff in Singapore and the UK.

The new hires will be part of Dyson’s £ 2.75 billion ($ 3.7 billion) global technology investment plan as the company seeks to expand research into advanced robotics and artificial intelligence.

At its global headquarters in Singapore, Dyson will recruit 250 new engineers to double its existing software and electronics engineering team, the company said Wednesday. The company currently employs about 1,400 people in the city-state, nearly half of whom are engineers and scientists.

Dyson said it also plans to set up a cybersecurity research center in Singapore.

We develop our research and engineering teams to achieve radical leaps in the performance of our machines, supported by technology …

James Dyson

founder and chief engineer, Dyson

The British tech company announced in 2019 that it was moving its headquarters from Wiltshire, UK, to Singapore citing growth opportunities in Asia – a move that was widely criticized as billionaire founder James Dyson is a prominent defender Brexi.

“We developed our research and engineering teams to achieve radical leaps in the performance of our machines, supported by technologies such as solid-state batteries and robotics,” said Dyson, the company’s founder and chief engineer.

In the United Kingdom, another 200 people will be employed in science and research roles at the Dyson Malmesbury and Hullavington innovation campuses, the company said.

The new role there will focus on breakthroughs in areas such as AI, machine learning, as well as high-speed digital motors and sensing technology.

More than 4,000 people, most of them engineers and scientists, work at Dyson’s UK offices.

Dyson’s research and development team is spread across the UK, Singapore, Philippines, Malaysia and the United States.

Company canceled plans to build an electric car by 2019.


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UK economy thrives in February with lockdown ending | Brexit News | Instant News

The rapid rollout of the COVID-19 vaccine has raised hopes that the economy will recover this year and 2022.

The UK economy grew 0.4 percent in February from January as companies braced for lifting of a third coronavirus closure, according to official data which also showed a partial recovery in post-Brexit trade with the European Union.

Economists surveyed by Reuters news agency expected growth of 0.6 percent.

However, the data also showed that the decline in Gross Domestic Product (GDP) in January was not as severe as previously thought, down 2.2 percent compared to the initial reading of which was down 2.9 percent.

The UK economy shrank by nearly 10 percent last year, the biggest slump in more than three centuries and a decline that was more severe than in most European economies, as the country was hit by the coronavirus pandemic.

Data Tuesday showed GDP remained 7.8 percent below its level a year earlier, shortly before the pandemic hit Europe, and 3.1 percent lower than its October level, before two of the latest lockdowns hit Britain’s large services sector.

However, the rapid rollout of the COVID-19 vaccine has raised prospects for recovery this year and in 2022.

Restrictions relax

Non-essential shops and outdoor hospitality establishments reopened on Monday and Prime Minister Boris Johnson hopes to relax most of the coronavirus restrictions by the end of June.

“While the UK is still on track for a modest contraction in GDP in the first quarter, investors are increasingly looking towards an impending rebound in economic growth rather than thinking about negative quarterly figures,” Dean Turner, economist at UBS Global Wealth Management, said.

Growth in February was helped by the first increase in factory output since November, led by car manufacturers after two months of contraction as industry struggled with a global shortage of microchips.

Wholesalers and retailers saw an increase in sales which helped the service sector grow by 0.2 percent.

Post-Brexit recovery

There are signs that trade between the UK and the EU partially recovered in February after taking a hit in January, the first month of a new post-Brexit trade relationship.

UK exports of goods to the EU, excluding non-monetary gold and precious metals, were 41.4 percent below last year’s level in January but partially recovered to 12.5 percent below last year’s level in February. Imports, which fell 19.2 percent at last year’s level in January, were 11.5 percent below last year’s level in February.

Trade volume between the UK and the EU will increase in late 2020 as businesses stockpile on goods in anticipation of border delays in 2021.

“Despite evidence of a partial recovery from January’s substantial decline in some commodities, it is too early to determine the extent to which monthly changes in trade for January and February can be directly attributed to the end of the transition period,” ONS said.

Early signs of pent-up demand emerged on Monday as consumers crowded into shops that were left open for the first time in nearly 100 days along with pubs and restaurants that had space to serve outside.

The return of non-essential shops is the latest stage in a plan that Prime Minister Boris Johnson hopes will see all remaining restrictions removed by June 21. The first step is the reopening of schools on March 8, and signs are showing that economic activity picked up in March. The main purchasing managers’ index rose well above the 50 level separating contraction from expansion.

Economists said the UK could experience a consumer boom if only a fraction of excess savings were released, and the Bank of England chief economist saw the risk of inflation being unwanted.

A drop in infection rates and a rapid vaccination program are raising confidence that the UK can avoid another lockdown. More than 60 percent of adults are immunized, most from any major economy.


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100 days later, Brexit doesn’t work and business wants to be repaired | | Instant News

When British Prime Minister Boris Johnson announced it Brexit trade deal on December 24, he said it would allow British companies “to do more business” with the European Union.

Britain will be “affluent and dynamic and content” thereafter completing his exit from the European Union, Johnson says, is free to enter into trade deals around the world while continuing to export unhindered to the EU market of 450 million consumers.

But it’s been 100 days since Britain broke away from its biggest single trading partner and Brexit has proven to be a disaster. for many UK exporters, who has dismissed Johnson’s description of the problem as a “teething problem” and now calls on the government to take urgent action to prevent further losses.

“We call on Britain and the European Union to return to the negotiating table and come up with solutions that reduce trade barriers and give exporters an opportunity to fight,” said British Chamber of Commerce executive director Hannah Essex in a statement on Monday.

“The difficulty exporters face is not just a ‘teething problem’. It is a structural problem which, if left untreated, could lead to potentially irreversible long-term weakness in the UK export sector, “he added.

The deal is bad for trade. But it has also contributed to the recent violence and growing anger in Northern Ireland.

During the negotiations on the Brexit deal, the issue of moving goods between Ireland, which is a member of the European Union and Northern Ireland, which is part of the UK, proved to be the most difficult to solve. Honoring the 1998 Good Friday Agreement which ended three decades of sectarian violence meant avoiding a return to the border on the Irish island.

Instead, Johnson agreed that Northern Ireland would remain subject to EU market rules and to set up trade borders in the Irish Sea to control them, angering pro-British union members who objected to Northern Ireland being treated differently from other British nations. Johnson has promised in 2019 that there will be no inspections of goods moving between Britain and Northern Ireland.

The rioting and violence on the streets of Belfast this month have sparked fears of a return to Northern Ireland’s troubled past and led a US State Department spokesman to warn that the Good Friday Agreement should not “fall victim to Brexit.”

Exports are collapsed

The UK government has not published an assessment of the economic impact of Brexit, and continues to promote the benefits it claims.

A government spokesman told CNN Business that the Brexit deal “protects high-quality jobs and investments right across the UK and ensures that businesses continue to trade effectively and sell to their customers in the European Union.”

But a survey of more than 1,000 UK business leaders conducted by EY and the London First lobby group in late February found that three-quarters had experienced disruptions to their operating model after the end of the Brexit transition period, and half expect it to continue in the long term. .

UK exports to the European Union plunged 41% in January compared with December, according to the Office for National Statistics, and many companies said their ability to continue trade with the bloc was at risk due to problems arising from the trade agreement. Businesses that were previously able to get goods into Europe within hours of placing an order now face long and costly delays due to new customs and food safety checks.

A UK Chamber of Commerce survey published Monday of 2,900 UK exporters found that 41% of companies reported a drop in export sales in the first quarter, driven by Brexit and the impact of the coronavirus pandemic.

British exporters are struggling to adjust to the “paperwork” they now have to handle, according to Suren Thiru, head of economics at the British Chamber of Commerce.

There is also ambiguity surrounding sales tax payments as well as confusion about new rules of origin requirements, with companies reporting very little accessible advice from the UK government on the matter, he told CNN Business. Rules of origin determine the origin of goods, including raw materials and component parts, and whether tariffs should be charged.

“The fact is, companies trading with the EU did not need to know or understand customs until now. And there is not enough capacity at [customs] industry to provide the support it needs, “said Anna Jerzewska, founder of international trade consultancy Trade & Borders.

While large companies can cover new costs, small businesses have been hit hard. A survey of 132 exporters by the Small Business Federation in March found that 23% had temporarily suspended sales to the European Union and five had stopped permanently.

“Small traders are struggling, and are considering whether exports are worth pursuing again,” the organization’s national chairman Mike Cherry said in a statement last month.

Can the deal be fixed?

On Monday, a group of lawmakers, business leaders and economists announced an independent commission to scrutinize Britain’s trade deals with Europe and the rest of the world.

The UK Trade and Business Commission, which counts Virgin chairman Peter Norris among organizers, will make recommendations to the government on how to scale up this deal.

“We will take a detailed look at the impact of this deal, especially on small businesses bearing the brunt of the new bureaucracy on our borders,” said conservative lawmaker Roger Gale, who sits on the commission, in a statement. . “It’s about putting ideology aside and finding a pragmatic, evidence-based way forward,” he added.

The situation is especially urgent for food producers, who have seen their all-in-one exports but have been wiped out by new trade arrangements. From 1 January, all plant and animal products entering the EU require an export health certificate (EHC) which must be stamped by a government-certified veterinarian.

This prevents the Cheshire Cheese Company from selling to online buyers in the European Union because the price of the certificate is many times the average selling price of £ 25 ($ 34) to £ 50 ($ 69) per order.

Prior to Brexit, these sales were valued at around £ 180,000 ($ 247,800), or 20% of the company’s revenue, and are on track to hit £ 250,000 ($ 344,000) this year, according to managing director Simon Spurrell. “We used to have an ocean of opportunity, we dealt with 27 different countries. It quickly became a pool,” said Spurrell.

UK food and beverage exports collapsed in January, driven by a 76% drop in sales to the European Union compared with the same month last year, according to the Food and Beverage Federation. Salmon exports fell 98%, beef fell 92% and animal feed fell 80%. Whiskey exports fell 63%.

“The solution is to swallow our pride and reach a veterinary agreement,” said L. Alan Winters, founding director of the UK Trade Policy Observatory at the University of Sussex. “Without it we will see that animal products are unlikely to increase,” he added.

There are several other areas that also need attention.

For example, reciprocal recognition of professional qualifications, such as doctors, accountants and architects, still has to be agreed per sector. It hasn’t happened yet and it is a “big problem” facing businesses, said Thiru.

Johnson’s Brexit deal makes no provision for financial services, an industry that accounts for nearly 11% of government tax revenue and 1.1 million jobs, according to PwC and the Office for National Statistics.

The prospect of a deal that will give Britain the same market access rights as some other non-EU countries is looking slim, and it could further undermine London’s position as Europe’s top financial city.

Since the referendum, international financial services firms have transferred assets worth nearly £ 1.3 trillion ($ 1.8 trillion) and relocated 7,600 jobs from Britain to the European Union, according to data tracked by EY. Amsterdam has surpassed London as the top stock trading center in Europe.

“The days of significant asset announcements and job relocations appear to have passed and are likely to be replaced by a slower but sustained movement of people and assets to Europe for compliance purposes,” said Omar Ali, financial services management partner at EY, said in a monthly report. then.

Long term consequences

Leaving the EU single market means an end to frictionless trading and higher costs for British companies, even as they adjust to new ways of doing business.

“It’s important to realize that there are some teething problems, but there are also problems to come because the long-term consequences make it more difficult to trade back home,” Winters said.

That will encourage foreign direct investment into the UK over time as companies wishing to serve the European market will no longer choose to be based in the UK, he added.

The new trade relationship is expected to cause a long-term loss of output in the UK of around 4% compared to the rest in the European Union, according to the UK Office of Budget Responsibility, which produces economic forecasts for the government. Exports and imports will fall by about 15% in the long run.

According to Jerzewska, a trade expert, the main consequence is a gradual shift in supply chains as EU producers seek alternative suppliers. “Businesses are following the path of least resistance and new trade barriers could make UK suppliers less competitive in the EU market,” he said.


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