Economic impact of Brexit: special focus

By:
Erica Jeffery
Published on:

What will Brexit mean for the UK, and for the rest of the EU? Bankers, traders, corporates and economists prepare for the economic impact of Brexit.

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FX: Weaker sterling here to stay
June 2017 
From strong and stable to weak and jittery, the pound bore the brunt of the surprise UK general election result, but despite May’s quick move to form a working coalition government, sterling will likely stay soft, say analysts.

Brexit: Relocating? Let me call my cousin
June 2017
The one-year anniversary of the UK vote to leave the European Union is fast approaching and still most banks clustered in London haven’t disclosed plans to relocate staff to deal with EU clients, senior management to answer to regulators, or even any support staff.

Banking: The UK versus Europe
May 2017

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Continental European banks have long looked with envy over the English Channel – more than ever since the eurozone crisis – but with UK banks facing Brexit and a more advanced economic cycle, and as a degree of inflationary confidence returns to the eurozone, could the tables be turning?

Against the tide: Election summer surprises
April 2017

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By the time we get to the German federal elections in September, we should have a new pro-EU French president and a UK prime minister looking for a soft Brexit deal and willing to negotiate.

Surprise snap election rocks UK risk profile
April 2017


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"The risk scenario is if the Conservatives lose their majority, plunging the UK into political chaos during the Brexit negotiations, which would then be delayed."

Fears over access to capital push UK's country-risk score to new low
April 2017
Economic and political analysts are becoming more concerned about the UK’s future access to capital markets after Brexit, a fear that helped push the UK down one place on ECR's combined country risk scorecard in the first quarter of 2017.

ECR survey results Q1 2017: Europe marches on without the UK
April 2017
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Euromoney’s country risk survey shows disparate risk trends emerging in Q1 2017 as leading economists and political experts reassess their views on asset safety in the wake of changing commodity prices, currencies and populist political trends.

Brexit-related FX mis-selling claims hitting hurdles
April 2017
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Claims of FX derivatives mis-selling have spiked since the EU referendum, although the limited number of court cases brought to date indicates the difficulties faced by companies who feel they were sold products not appropriate for their hedging requirements.

Brexit is an apt end to RBS’s futile restructuring
April 2017
Williams & Glyn fits a pattern of how mishandled dealings with the UK government and the EU have overshadowed the banks’ wider recovery. Now, as the end to an epic restructuring nears, Brexit begins.


Against the tide: Populist threat held off but don’t expect bond rally
March 2017

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The populist surge is being restrained for now, but several factors are likely to drive up sovereign bond yields in Europe.


Eurozone corporates prepare to quit the UK
March 2017

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As Europe improves, corporate investment is rising – with one glaring exception.


Sterling rally has Brexit bears scratching their heads
March 2017

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Conventional wisdom says the UK’s forthcoming exit from the European Union will be bad for the pound, but after a year in which the UK currency has lost a fifth of its value on a trade-weighted basis, there are some in the FX markets who say the worst impacts of Brexit are already priced in.

UK banking: No wish for post-Brexit deregulation
February 2017
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Bankers in the UK have little if any appetite to row back on a decade of regulation they are just about getting used to.

Private equity: The beauty of being Brexit-proof
February 2017
It is not only banks that are wearily trying to assess the impact that the UK leaving the EU will have on their businesses – private equity firms are getting increasingly concerned too.

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Econ calls for ‘fair’ deal with UK on market access
February 2017
There may be yet some good news for UK based financial services in the wake of Brexit, if the Economic and Monetary Affairs Committee (Econ), a powerful committee within the EU Parliament, gets a draft resolution now being considered through to a plenary vote in its current form.

FX: Bad news better than no news as sterling surges on hard Brexit talk
January 2017
On a day many expected would see the pound sink to new depths, the currency instead responded to news that the UK would be leaving the single market by posting its best performance since the referendum – but whether the day marked a turning point or a mere relief rally, nobody can be sure.



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Against the tide: Italy – another victim of the anger vote
January 2017
With the sizeable majority voting no to political reform in the Italian referendum, the anger vote has claimed its next victim – Italy. The dominoes of Brexit, Trump and now Italy continue to fall.

Euromoney Country Risk survey results 2016: Italy, UK and US shocks underline the risks of populism, as oil exporters take a caning
January 2017
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ECR’s crowd-sourcing survey shows global risk rising in 2016, with leading economists and political experts revising their views on asset safety.

Trade Finance Survey 2017: Tough times in trade finance
January 2017
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The world seems to be turning away from globalization and towards protectionism. Yet despite this challenging environment for trade, the bankers who finance it remain surprisingly upbeat.

Country risk review 2016: Populism is risky

January 2017
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Euromoney Country Risk shows global risk rising, as leading economists and political experts revise their views on asset safety.

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Impact of Brexit on the City is as much about logistics as logic
December 2016
The question of banks moving to the mainland after Brexit will be settled at the dining table.

Year in data 2016: A watershed year for European bank shares
December 2016
For many European bank stocks, 2016 was an unrelentingly awful year.

2016: A rollercoaster year for foreign exchange
December 2016
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2016 will be remembered as the year the people punished politicians at the polls, unleashing a torrent of volatility in financial markets, with currencies taking a huge hit. Here are the biggest currency stories of 2016.

EU finance post-Brexit: London, Paris, Frankfurt … Vilnius?
December 2016
Perhaps size is an advantage for an innovation centre – small size, that is. It means you are nimble. So says Lithuania.


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Capital markets: Has Brexit killed CMU?
November 2016
Capital markets activity in Europe is dominated by the UK, so the Brexit vote could have dealt a mortal blow to the European Commission’s plans to promote it through the capital markets union initiative. To survive, CMU will have to get global.

Brexit: FX hedging headache on the horizon
November 2016
UK businesses face a post-Brexit hedging headache, as FX protection purchased before the referendum is now running out for many companies. The cost of renewing it has subsequently sky rocketed.

Banking: CEOs call for regulatory harmony, time to digest change
November 2016
Brexit threatens eurozone, but region still crucial to global banks.

Dimon, Corbat and Gorman talk Brexit
October 2016
The topic of Brexit was never going to be far from the minds of delegates at the annual meetings of the International Monetary Fund and the Institute of International Finance, both being held this week in Washington, DC. And on Friday afternoon, delegates got a chance to hear the views of three vocal US bank chief executives — Jamie Dimon of JPMorgan, Mike Corbat of Citi and James Gorman of Morgan Stanley.

Against the tide: Politics and economics – the anger vote
October 2016


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The European Project faces a much greater danger from the rise of populism than from the sovereign debt crisis.

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Real Estate Survey 2016: Brexit – mortal blow for bricks and mortar?
September 2016
UK commercial real estate’s post-Brexit shock has proved short-lived, and high-profile gating of investors in a number of UK real estate funds did not precipitate a flood of copy-cat behaviour. But the long-term outlook for investors and lenders in UK real estate remains extremely uncertain.

Brexit offers glimmer of hope for challenger banks
August 2016


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The UK’s challenger banks are stuck in a capital bind, forced to compete with each other on far worse terms than the big banks, but Brexit could offer a glimmer of hope.

FX recruitment holds firm after Brexit
August 2016
While market talk suggests a number of finance professionals are delaying planned moves to London and some hiring seems to have been put on hold, specialist FX recruiters claim it has largely been business as usual post-Brexit.


Brexit volatility fuels FX mis-selling claims
August 2016
Brexit-related currency volatility is fuelling a rise in foreign-exchange product mis-selling enquiries from businesses that have been burnt on ‘fiendishly complicated’ currency trades.

Treasurers left in the dark over ring-fencing plans
August 2016
The uncertainty created by the UK’s recent referendum decision to leave the European Union is making the country’s banks reluctant to discuss openly their plans for ring-fencing parts of their domestic operations. 

Real estate: Property fund gatings revive memories of 2008
August 2016
Brexit sparks investor flight; private equity sees an opening.

Check your hedges, Citi warns corporates, amid Brexit FX volatility
July 2016
The UK's decision to leave the EU has left corporates scrambling to review many aspects of their business to ensure they are able to withstand heightened volatility. Injecting a greater level of optionality into their hedging strategies is one way to protect themselves from increased uncertainty, says Citi.

Brexit is no disaster for the UK, but it has increased the risk of investing
July 2016
The swift formation of a new government and the opportunities created by the pound’s fall have quietened the doomsayers. But risk experts have downgraded their views on the economic outlook and government stability after the referendum, with so much that is still unknown.


Weak UK economy ties Bank of England's hands on FX intervention
July 2016

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New UK prime minister Theresa May is busy shaping her administration at 10 Downing Street, but it is events taking place barely miles away in Threadneedle Street that are exercising the minds of those trying to predict where the pound goes next.

What banks can learn from fintech CEOs’ reaction to Brexit
July 2016

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Start-ups fear a funding stop and loss of access to the single market, but are already making back-up plans that could point the way for their peers in the more established parts of UK finance.

Euromoney Country Risk survey results H1 2016: Global risk hits new high as Brexit adds to China and EM concerns
July 2015
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The UK’s decision to withdraw from the EU has opened a Pandora’s box for global investors at a time when commodity prices are depressed, sovereign bond yields are sinking to new lows and prospects are still dimming for many emerging markets (EMs).

Bank of England plots strategy to calm fretful markets
July 2016
The BoE still has plenty of monetary weapons in its policy arsenal, including expanding an asset-purchase programme akin to the ECB. But amid febrile market confidence, it needs to tread carefully.

FX: Uncertainty stalks sterling sales and trading post-Brexit vote
July 2016

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As market activity to some extent returns to normal after the immediate post-Brexit plunge, dealers and traders are searching for signs of how clients will behave over the coming weeks and months.

EU regulations to remain for years despite Brexit vote
July 2016


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UK-based financial institutions should expect the bulk of European Union regulations to remain in place up to and even after the UK's exit from the bloc, despite uncertainties over the terms of the eventual exit, lawyers say.

FX: Retail investors dodge sterling Brexit bullet
June 2016

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How and why trading was dominated by banks and ECNs, with retail investors cautious about getting steamrolled by volatility.

The cities seeking to take London’s FX crown
June 2016
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Paris and other leading European cities will have their work cut out usurping London’s status as the continent’s leading FX centre, even if they succeed in undercutting London’s status as the centre for euro clearing.

FX traders pick through Brexit wreckage
June 2016
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Britain's vote to exit the European Union fired volatility back into currency markets and gave traders opportunities in a number of currency pairs, including minors and exotic currencies as well as the majors.

Macaskill on markets: Brexit and the merchant bankers
June 2016


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Brexit will deal a mighty blow to the international and diverse City of London that has thrived for 30 years – but investment banks have bigger worries than the location of their EU offices.

Brexit vote triggers market mayhem
June 2016
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The market tremors of the game-changing UK vote to leave the European Union will reverberate for years to come across global risk assets, the UK economy, banking stocks and currencies.

Brexit imperils City’s status as euro-clearing hub
June 2016 
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The European Central Bank (ECB) is likely to quickly challenge London’s status as the eurozone’s largest hub for the clearing of euro-denominated trades if the EU referendum goes against UK membership – but the move, which would be seen as highly political, would be beset with legal challenges.

Swedish krona in line of fire amid Brexit
June 2016
The Swedish krona is ranked as the third weakest currency in a Brexit scenario after sterling and euro, according to analysts.

Country risk: Experts say UK economy will quickly recover from Brexit shock
June 2016

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The UK’s economic and structural ECR scores are holding up well despite the possibility that its people will vote to leave the European Union (EU) next week. The strength of the sovereign’s outlook means that if the UK did vote to leave, it could quickly recover from the ensuing drop in its risk score, claim several experts this week.

Brexit volatility triggers warnings on stop-loss orders
June 2016 
The potential for next week’s EU referendum to trigger a sizeable movement in sterling highlights the need for clients to review their use of stop-loss orders as a risk-management mechanism, amid memories of the SNB debacle. 

Organized trading facilities set to increase FX transparency
June 2016 
“Most likely they will register in the UK unless Brexit becomes a reality, in which case mainland Europe applications could begin to emerge, probably based in Frankfurt,” he says.

EU referendum: UK banks brace for Brexit risk
June 2016 
Existential threat to euro wholesale industry; Fears for loss of single-market passport.

Corporates hedge Brexit risk with FX forwards
May 2016
With the spectre of a 'Leave' vote predominating in the UK EU referendum hanging heavily over FX markets, corporates are likely to further increase their use of forwards as a hedging option.

FX risk management faces volatility challenge
May 2016 
The sheer volume of risks faced by the FX market is placing pressure on banks to create mitigation strategies to cover a wider range of market challenges, from Brexit to illiquidity.

Heightened concern over Brazil, China and other EMs accentuates global shock prospects
Country Risk Survey Q1 2016
Asia risk experts are, moreover, concerned by three issues: the possibility of Brexit causing ripple effects across the region; a stronger US dollar enticing capital outflow; and tensions in the South China Sea. 

USD: What a difference a year makes in FX
April 2016 
The US dollar has weakened against most major currencies this year, with the exclusion of the British pound, which is under pressure due to the threat of a potential Brexit.

UK and US – the not-so-special special relationship
Off message, April 2016
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Brexit presents a fascinating situation for the financial services community.


Sterling volatility here to stay as referendum countdown begins
February 2016 
The announcement of the referendum date of June 23 on UK membership of the European Union (EU) sent an already-weakening pound into a tailspin, which saw it testing multi-decade lows, but traders are divided on whether sterling has bottomed out as Brexit fears jump.

Country risk: Global risk is as much political as economic
February 2016
The movement of peoples displaced by the warfare has increased political risk in Europe, and Syria’s problems are likely to be exacerbated by growing tensions between Iran and Saudi Arabia. This, in turn, will affect European economies, feed into the UK Brexit debate, influence the outcome of elections and affect the EU project as a whole, all of which have the potential to buffet the financial markets.


Cameron’s sterling effort
Against the tide, December 2015 
Britain’s renegotiation of its relationship with the EU could be a good thing for Europe too.


UK politics – Dependent and independent
Against the tide, June 2015
The newly elected Tory party must wrestle with an invigorated SNP and its old bête noire, the EU. The proposed in/out referendum will cast a long shadow over the UK.

General election a lose-lose event for UK banks
May 2015 
"The longer-term risk of a Conservative-led consortium is an in/out referendum on Europe by 2017, stoking increased fears of Brexit," says Ghose. "This could potentially have severe consequences for the UK banks, including reduced access to the single EU market if the current passporting rights cannot be renegotiated. This could potentially make corporate and investment banking untenable for global banks operating with a UK hub."

The fragmentation of Europe
Against the tide, March 2015
Political pressures and lack of growth have put the European project under threat. Reform is urgently needed to set Europe back on course. 

The year of the dollar bull
December 2014 
Steven Englander, global head of G10 FX strategy at Citi, says: “Investors don’t see any positive outcomes for GBP, with a Labour majority/coalition bad for business and Conservative majority/coalition raising prospects of Brexit.”




"I told him: if you think the French and the Germans are going to leave the position of London as a financial centre untouched you’re living in cloud-cuckoo land"  - A top investment banker on his words of warning to a senior Bank of England official about the implications of a Brexit 


Sterling safe from currency war but Brexit casts a shadow
January 2013
Improved eurozone sentiment has seen sterling lose its safe-haven status and has renewed worries about the UK’s credit rating.

Brexit will lead to 'years of uncertainty' for Britain
January 2013
A referendum to decide whether the UK should remain in the European Union could negatively affect trade and investment into the UK, say economists, though some businesses threw their weight behind David Cameron's announcement.

Fears over EU exit weigh heavy on City
RBS sponsored article, January 2013
After a couple of turbulent years worrying about Grexit – Greece being ejected from the euro – the City now has something closer to home to worry about: Brexit.

EU budget talks spark calls for a British exit
November 2012
Although a Brexit remains in the balance, real politics suggest the government will favour a less confrontational position in Europe, though it still remains a high-stake option for Britain to take.


Eurozone fragmentation: special focus