Brexit

The Organisation for Economic Cooperation and Development on Tuesday issued a forecast for weak economic growth in the UK over the next two years that is worse than a much reduced estimate published last week by Britain’s fiscal watchdog.

The club of rich nations expects Britain’s economic growth to drop sharply from a rate of 1.5 per cent in 2017 – placing the UK at the bottom of the G7 group of countries – to 1.2 per cent in 2018 and 1.1 per cent in 2019.

“The growth slowdown is expected to continue through 2018, due to continuing uncertainty over the outcome of negotiations around the decision to leave the European Union and the impact of higher inflation on household purchasing power,” said the OECD, adding that there would be a “moderate” rise in the UK’s current 4.3 per cent unemployment rate.

Credit Suisse is considering spreading its trading, investment-banking and wealth management activities across several European locations after Brexit, «Bloomberg» reported, citing three sources on condition of anonymity.Switzerland’s second-largest bank is considering moving the activities affected by Brexit to a number of European cities, instead of replacing London with one large alternative location.

Daniele Nouy, head of supervision at the European Central Bank, said in Frankfurt on Tuesday that license applications from about 20 banks are in some stage of assessment by supervisors on the continent, Bloomberg reported.
"Some have visited us several times to discuss their plans to move," said Daniele Nouy, who heads the ECB’s banking supervision.

The chief executive of UBS, Sergio Ermotti, says it is becoming "more and more unlikely" that the bank will move 1,000 staff from London after receiving "regulatory and political clarifications" around Brexit.
The Swiss bank has previously said that around a fifth of its 5,000-strong UK staff were involved in operations dependent on passporting rights that allow financial services to operate across the bloc.

Two separate house price surveys published Monday, report a further decline in London property prices in September and October. According to the monthly house price index from Acadata and LSL Property Services, the average house price in England and Wales fell 0.1% on the month and rose 1.3% on the year, in September. However, excluding London and the south east, annual house price inflation was 3.3% higher.

British Euroskeptics now have a new watchword: Beware the “Swiss Trap.” Theresa May’s government is reportedly heading towards a Swiss-style model for its relationship with the European Union after Brexit. To the frustration of hardline Brexiteers within the Conservative Party, the deal Switzerland has with the EU is now being seriously considered within Whitehall and has not been ruled out by the prime minister, according to Politico.

Frankfurt is emerging as the frontrunner in the battle for the post-Brexit spoils, as the German city lures banks and jobs out of London amid uncertainty over divorce talks.

After months of stalled negotiations in Brussels between Britain and the EU left London’s future shakier than ever, a growing number of banks are stepping up their contingency plans by leasing office space in other European cities.

While rival hubs have jostled to attract London’s bankers, Frankfurt – the city known by locals as Mainhattan, indicating its dreams of financial stardom – has established a clear edge over competitors such as Paris, Dublin and Amsterdam.

EU taxpayers should not be made to pay for the U.K.’s decision to leave the bloc, European Commission President Jean-Claude Juncker told the European Parliament on Tuesday, adding that there had not yet been “sufficient progress” in the negotiations.

In a short speech to open the Parliament’s plenary debate on Brexit in Strasbourg, Juncker emphasized his intention to stick to the bloc’s hard lines on key divorce issues. “The taxpayers of the EU27 should not pay for the British decision,” he told MEPs.