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United-Kingdom: Brexit is coming, investments are waning…


In the UK, the prospect of Brexit has hindered foreign direct investments.

TRANSCRIPT // United-Kingdom: Brexit is coming, investments are waning… : January 2020

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Now a global phenomenon, the Covid-19 pandemic reached the United Kingdom relatively late and did not give rise to immediate protective measures. Having initially opted for a ‘herd immunity’ strategy, Boris Johnson’s government finally decided, on 24 March, to introduce a national lockdown. As in Italy, France and indeed generally across continental Europe, people’s movements and interactions are now limited in the UK. The disease, meanwhile, has spread rapidly, on a trajectory similar to that seen in the worst affected countries. Faced with the health and economic threats created by the pandemic, the government and the monetary policy authorities have introduced an exceptional package of support.
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On 31 January 2020, the United Kingdom will officially leave the European Union and all of its constituent institutions. Brexit will therefore happen in law if not in fact, as, during a so-called ‘transition’ period set to end on 31 December 2020, the British economy will remain a full part of the single market and the European customs union. Goods, services and capital will continue to move freely into and out of the EU, which will continue to have legal and regulatory authority. True separation will only come at the end of this period, once the framework of the future relationship has been settled. As has been the case for some time now, this final step does not look easy to achieve.
The UK: heading for the door 12/20/2019
The UK’s general election on 12 December gave Prime Minister Boris Johnson’s Conservative Party a substantial majority in the House of Commons. The way is now clear for ratification of the Withdrawal Agreement (Brexit) by the UK and the European Union, and this will come into force after the 31 January 2020 at the latest. There will then follow a transitional period, during which the UK and EU will have to determine the framework of their future relationship. However, at just eleven months long, this period threatens to be too short to implement the clean break sought by Mr Johnson. Unless it is to fall back on WTO rules, the UK will only be able to disentangle its links with the EU through a long and delicate process. In effect, Brexit is only at the beginning.
How major banks have returned to profit 11/8/2019
The financial crisis of 2008 left its mark on the macroeconomic, regulatory and legal environments in the United Kingdom. It was followed by a long period of consolidation in the banking sector. Although the major British banks have managed to improve their performances recently, they are now faced with fresh challenges, starting with the uncertainty surrounding Brexit. For the banks, this uncertainty will not be resolved immediately by the conclusion of the Brexit as they will still need to adjust to the loss of their European passporting rights and potentially to address a contraction in demand in their domestic market.
United Kingdom: credit bank supports bank's activities at the price of a slight increase in risk 11/8/2019
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United Kingdom: Credit risks increase on banks’ balance sheets 7/24/2019
The share of residential loans to individuals whose value at the origination represents more than 90% of the value of the property acquired continued to grow in the first quarter of 2019. This credit category then represented 4.5% of outstanding home loans compared with 4.4% in the previous quarter and 3.3% a year earlier. The increase in their weight in the first quarter of 2019 prolongs the trend observed since the low point reached at the end of 2009. It also goes hand in hand with the increase in the proportion of real estate loans whose value represents between 75% and 90% of the value of housing. The growing financial constraint of households is otherwise illustrated by the increase in the proportion of loans with a high loan to income ratio. The erosion of the margins of credit institutions concerned with preserving volumes and their market shares, has marginally contributed to this by keeping, despite the two increases in the base rate of the Bank of England (BoE) occurred since October 2017, the amount borrowed at a high level, in constant monthly payments.

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