Despite significant economic gloom and a weakened pound, Bank of England governor Mark Carney predicts the UK’s financial future will shift to overdrive once a EU-Brexit deal is done. The UK’s financial sector could even double in size he suggested yesterday as UK interest rates were again left at 0.25%.
Carney’s optimism has not stopped the Institute of Directors (IoD) telling the government to assemble a transitional deal to smooth the way. “Instead of dancing around the edges, this issue must become a policy discussion for the Cabinet,” the IoD says in a new report.
With little in Carney’s words yesterday to suggest a near rate rise the pound was down slightly overnight at $1.3138 while the euro was at $1.1879, also down slightly. The euro is still up 1.74% against the dollar in the last week alone (4.73% up in the month).
- UK FTSE 100 7,474.77 +0.85%
- Dow 22,026.10 +0.04%
- S&P 500 2,472.16 -0.22%
- Nasdaq 6,340.34 -0.35%
- Nikkei 225 19,966.40 -0.31%
- DAX 12,154.72 -0.22%
- CAC 40 5,130.49 +0.46%
- Gold 1,274.10 -0.02%
- Oil WTI 46.95 -0.16%
RBS confirms Amsterdam HQ post-Brexit
Royal Bank of Scotland (RBS), still part-owned by the taxpayer, has plumped for a future in Amsterdam post-Brexit it confirmed this morning, at least for some staff. It also claims profits of £939m for the first half of the year. That compares sharply with a £2,045m loss at the same time a year ago.
However RBS is still having to pay down substantial costs. “Restructuring costs were £790m in H1 2017, an increase of £160m compared with H1 2016, and included a charge of £217m relating to the reduction of our property portfolio.”
In the background also lurks a fine – as much as $5.5bn – from US regulators for RBS' role in selling subprime mortgages pre-financial crisis. RBS shares at 256.22p are up 33% in the last 12 months.
Sports Direct investors pull out
There’s continued concern for Sports Direct International. Yesterday the Guardian claimed that Standard Life, a major Sports Direct investor, had ejected from the stock on more corporate governance worry. It’s thought Aviva has also bailed out.
“Investors have expressed concerns,” said the Guardian, “over the dominance of [Mike] Ashley, the firm’s excessive pay rewards, and poor treatment of workers.” However both would be pulling out after a substantial price rise in the stock, up 36% in the last month.
Elsewhere LondonMetric Property says it has sold its Milford Haven retail park for £15.3m. "As occupier and investor demand for physical retail becomes ever more polarised," LondonMetric chief exec Andrew Jones said, "we will continue to align our portfolio towards logistics and convenience retail in the strongest locations."
LondonMetric shares are at 167.78p, up 7.7% year-to-date.
Breaking news: Bank of England deputy governor Ben Broadbent claims "the level of consumer debt is less compared to incomes than it was during the [financial] crisis." Worry about UK consumer debt levels have been rising as car PCP sale deals, for example, rise.