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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (118906)	5/7/2016 4:11:05 PM
From: Elroy Jetson	Respond to of 218037

The UK economy has slowed significantly, with zero growth expected in the second quarter, as businesses prepare for the June 23rd vote to decide whether England will exit the European Union. - ft.com The nail in the coffin for the second-quarter outlook came after the services purchasing managers’ survey followed surveys for manufacturing and construction both showing a sharp weakening, hitting more than three-year lows. Most major banks, the largest sector in the UK economy, have announced contingency plans to relocate many of their operations to Dublin, as Ireland has no plans to leave the EU. Last year both JP Morgan and Deutsche Bank announced plans to leave the UK entirely if they leave the EU. HSBC, with 48,000 staff in the UK, is concerned about the implications of a withdrawal from the EU, along with the rising bank levy in the UK and "regulatory and structural reforms" introduced after the 2008 financial crisis. HSBC's board has been studying a move to Hong Kong, central to Asia, where most of HSBC's profits are made. In February HSBC announced 1,000 jobs would be immediately relocated to France if the June 23rd vote indicates the UK will be leaving the EU. On March 27 the Bank of England announced contingency plans to provide billions of Pounds of additional liquidity to prevent a collapse of shares and bond markets in England. - ibtimes.co.uk Large businesses have publicly complained that uncertainty about the referendum is affecting decision-making; the Deloitte survey of top chief financial officers in April found that hiring and investment intentions had been badly affected. There are also signs that smaller businesses are seeing growth slow. Steve Kerassitis, managing director of Stelfox, which recruits senior executives for pharmaceutical companies internationally, said its UK business had suffered. “People take these jobs for five to 10 years. They do not know whether the UK is going to be in the EU in two years’ time, so they won’t move at the moment,” he said. The Brighton-based business recently opened an office in Switzerland, both to serve the Swiss market and to hedge its bets and provide a future continental base if Britain leaves the EU. Two Different Economic Forecasts to be Prepared The weaker data increase the difficulties for the Bank of England ahead of an inflation report next week, with the BoE’s current growth forecast of 0.5 per cent for this quarter now looking far too optimistic. While such a sharp slowdown would historically suggest doves on the BoE’s committee would be advocating more stimulus, the bank has already said it intends to “react cautiously” to news ahead of the vote, noting the uncertainty created by the referendum. Simon Wells, chief UK economist at HSBC and a former BoE official, said that while there was “no escaping the fact that recent indicators have been poor”, he did not expect any “knee-jerk policy reaction” to the data. There is a debate inside the BoE about how it should present its forecast in next week’s report, and some in the central bank are advocating presenting two: one for if the UK votes to remain; another for if it votes to leave. Governor Mark Carney has already said he thinks a vote to leave would risk creating the central bank’s nightmare of “a lower path for growth and a higher path for inflation”, because an inflation-inducing depreciation would be caused by the uncertainty of Brexit. In the event of a vote to stay, officials at the Treasury and the BoE are pinning their hopes on a marked bounce-back in the second half of the year as companies loosen the purse strings for both investment and hiring.