Monday, 19 June 2017

Brexit gets real




Image result for David Davis Brussels

Brexit is here and starting today...

David Davis MP is in Brussels right now, starting the negotiating for the UK's withdrawal from the EU.

There has been so much talk about this, whether it is a 'hard' or 'soft' Brexit, and since the election result earlier this month, everything is up in the air.

There has been a few opening shots fired from both sides, some serious, some more joking. One particular opening shot was aimed at moving the financial sector out of London - which is a bit worrying.

Last week the Eu proposed new laws forcing clearing houses located outside of the EU, to move to within the EU! This could force UK-based clearing houses to move out of the UK, hurting our economy. This, of course, was always a risk of Brexit. London is a major financial institution for the EU, inevitably, if we leave the EU, London will probably stop being a major player in the EU. The impact on the major economy is virtually impossible to predict, it is safe to say it will have a huge impact on the financial services industry though.


Image result for london financialThe financial services industry are facing short, medium and long-term uncertainties. There is a real disincentive to create jobs in London that may have to be moved in a few short years. Medium and long-term risks are the real shrinking of the financial sector. That in itself will have a significant impact on the British economy and the value of the pound. However, by leaving the EU, it opens other doors for our financial industry to work with other economies, so it isn't all gloomy. The problem is, we just don't know. Let's hope David Davis is up to the job and can sort out this mess. One thing we do need to do is stay positive and pull together to work through these uncertain times.

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