Financial services and Brexit.....

Financial services and Brexit.....

The Conservative party has promised an In/Out referendum over the UK's membership of the EU by the end of 2017 should they remain in power after May's election. The Financial Times ("Banks most at risk.... , p.2) looks at the likely consequences of a UK withdrawal, or "Brexit". An Open Europe report concludes that after initial uncertainty and disruption, Britain should be able to negotiate trade deals in the sectors where it is weak, e.g. goods and manufacturing. But where Britain runs a surplus with the EU, i.e. in financial services, such deals are unlikely. This is surely right ..... European financial centres have long been envious of London's position, and it is hard to  imagine them being happy to preserve that status.

Is the worst really over ?

Also in the Financial Times ("Fears of damaging deflationary spiral subside", p.7) , an upbeat review of recent economic data from around the world indicating that deflationary worries may be easing. Last week we remarked upon the irony of the ECB commencing its QE programme just as things look to have taken a turn for the better ..... now the suggestion is that they may be able to conclude the buying spree early.