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Mark Carney has reiterated the view of the Bank of England that the vote for Brexit has already knocked about 2 per cent off the size of the UK economy, a sum equivalent to around Ł40bn.
He added that the cost for each UK household was around Ł900.
Giving evidence to the Treasury Committee on Tuesday, Mr Carney said that the economy has underperformed the bank’s pre-referendum forecasts and that the Leave vote, which prompted a record one-day fall in sterling, was the primary culprit.
“If you look at where the economy is today, relative to that forecast, it’s more than 1 per cent below where it was despite very large stimulus provided by the Bank of England, a fiscal easing by the government and global and European economies, which are much much stronger than they were previously,” he said.
“If you adjust for those factors, the economy is about one and three-quarters – one and a half, one and three-quarters, up to 2 per cent - lower than it would have been.”
He added: “Real household incomes are about Ł900 per household lower than we forecast in May of 2016, which is a lot of money.”
The governor first estimated in January, speaking in Davos, that the cost of the Brexit vote was heading for 2 per cent of GDP by the end of 2018.
Heaven forbid that anyone should ever assume that this is evidence of the fact that the bank's forecasts are nonsense, rather than of Brexit being such an evil?
Carney seems to be the one person in public life at the moment who's even more anti-Brexit than Anna Soubry?
I can't speak for Carney's impartiality, but what seems plain to me is this: whatever benefits Brexit should bring, if any, they may become apparent over the long-term. That is, decades. It could be 10, 20 or 50 years from now. The main issue though is, there are no guarantees that the benefits will come compared to the status quo (as defined up to the Brexit vote).
On the other hand, what's indisputable right now is that Britain is worse off already, with the GBP devalued alongside international investments, investment banks pulling jobs out of London and prestigious agencies being moved out of the UK, just to quote some. That's the immediate impact.
So we have a tangible effect now, against a presumed countereffect, sometime down the road, which is not guaranteed.
Yup - can't argue with that - I'm not sure even Rees-Mogg could argue with that.
(I do think the Bank of England is even more biased against Brexit than the BBC, though, and that's saying something. Of course, they may all still turn out to be right.)
LONDON (Reuters) - Bank of America (BAC.N) is looking to move more jobs than originally envisaged to its new Paris office, in what is expected to be one of the biggest such shifts from London ahead of Brexit, two sources familiar with the matter said.
A first wave of moves from London will begin early next year and will affect roughly 400 jobs in Bank of America’s markets, trading, sales and fixed income teams, the sources told Reuters.
Bank of America’s Chief Operating Officer Tom Montag said in November that about 200 people in sales and trading would move to the European Union and to Paris in particular.
But since then the overall number has risen and the U.S. firm now wanted to fill every desk in Paris, the sources said.
“It is an aggressive plan,” one told Reuters.
The Wall Street bank is refurbishing an 11,000 square metre office in the French capital to create a European trading hub that will serve clients once Britain leaves the EU in March.
One of the sources said the building has capacity for more than 700 people and that staff in London are being notified about their new base. A source close to the bank said it may sub-let some space, depending on the final Brexit deal.
LONDON (Reuters) - Britain’s economy is on course to lag behind its international peers again this year as it nears its departure from the European Union, according to new forecasts from the Confederation of British Industry, an employers’ group.
The world’s fifth-largest economy looks likely to grow by 1.4 percent in 2018, according to the CBI, weaker than projected growth in the euro zone of 2.2 percent and in the United States of 2.8 percent.
Britain went from being the fastest-growing economy in the Group of Seven to its slowest last year as the value of the pound fell after the Brexit vote in 2016 and companies turned cautious about investment.
The CBI argued before the Brexit referendum that staying in the EU would be best for Britain’s economy
The CBI’s forecast for Britain’s growth rate this year represented a slight reduction from its previous forecast of 1.5 percent, reflecting the economy’s weak start to the year during unusually cold weather, the group said.
Growth looks set to slow to 1.3 percent in 2019, when it will again lag behind the euro zone and the United States, the CBI said.
With less than a year to go before Britain is due to leave the EU, the CBI described the risks to the economy as “skewed to the downside”, especially if talks between London and Brussels on their new post-Brexit relationship turn sour.
Uncertainty over Brexit continued to weigh on corporate investment, but the CBI said a growing number of its members planned to spend more on automation, robotics and training to circumvent skill shortages.
The CBI’s chief economist, Rain Newton-Smith, said such technologies were becoming much more affordable so a lot of businesses were starting to adopt them.
“But at the same time there’s a huge amount of uncertainty in a lot of sectors about what our future relationship with the European Union will be,” she said. “That means it’s just harder to make those very long-term, capital intensive decisions. Businesses are still holding back.”
Spanish conglomerate that owns 25% of Heathrow to relocate to Amsterdam
The Spanish infrastructure firm that manages Heathrow and owns 25% of the airport is to relocate its international head office from the UK to Amsterdam as a result of Brexit.
“The reason for the move is to maintain these holdings under the umbrella of the EU’s legislation,” said a spokesman for Ferrovial, which also owns Aberdeen, Glasgow and Southampton airports.
The company runs four international businesses – airports, construction, infrastructure and toll roads – from Oxford. It also operates in the US, Canada and Poland.
Its spokesman said the move of the international holdings to the Netherlands was under way.
The announcement comes just a day after MPs approved the construction of a third runway at Heathrow. The project has an estimated cost of Ł14bn.
Last week, the aerospace firm Airbus warned it could halt investment in the UK if the country leaves the European Union without a deal. The German carmaker BMW has also said it could be forced to halt production of Minis and Rolls-Royces .
Several financial businesses have warned they may be forced to move some activities out of Britain to other EU countries because of Brexit. Bank of America Merrill Lynch said on Tuesday it was sending three senior executives to work in Paris, with more to follow, as part of its Brexit preparations.
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From the NY Times
Boris Johnson resigned as Britain’s foreign secretary on Monday, becoming the second cabinet minister to quit in less than 24 hours in protest over plans from Prime Minister Theresa May to soften the economic impact of British withdrawal from the European Union.
Mr. Johnson’s departure followed that of David Davis, who quit as Brexit secretary late Sunday, and deepens the mood of crisis gripping Mrs. May’s government three days after she thought she had won agreement from her cabinet on a Brexit plan.
A YouGov poll last week showed that for the first time a majority in the UK want another referendum on the terms of any deal, including a “Remain” option.
Both Tory & Labour parties are in complete disarray over Brexit with less than 9 months to go “... & it’s getting more & more absurd”, as Sir Elton once sang.
