Fleeing Brexit to Berlin? Beware red tape, startups say
- Despite a slick campaign to lure companies from London to Berlin
after Britain voted to leave the European Union, some of those which
have moved say it is not as easy as it first appeared.
the unexpected referendum decision in June, Germany's liberal Free
Democrats hired a truck to drive around London with a billboard
declaring, 'Dear start-ups, Keep calm and move to Berlin'.
ironic reference to a popular poster entreating Britons to Keep Calm and
Carry On at the outbreak of World War Two against then Nazi-ruled
Germany, it was soon followed by the opening of an official Berlin
marketing office in London.
Two London based companies are among
those who have already taken the plunge. Their experience highlights the
attractions of the German capital but also the bureaucracy that lurks
behind the marketing, a factor in the global tussle for business
unleashed by the Brexit vote.
Web-design company MBJ London and
real-estate investment platform Brickvest, both co-run by Germans, had
already planned to open offices in Berlin but were jolted into speeding
up their investments by Britons' June 23 decision.
The motivation: to limit their London exposure in case of a "hard Brexit" - where Britain loses access to the single market.
Brexit Update: November Will See Greater UK Financial Clarity, Risk Premiums To Decline Slightly
To recover confidence in Sterling and UK gilts, markets will need
increased policy clarity. Political uncertainty will remain a key
negative factor for UK asset prices, especially as there is little
prospect of an early resolution to the Brexit negotiating stance. There
is, however, the potential for greater fiscal and monetary policy
clarity during November, which would help lessen the risk premium on UK
November will be a key month for the shot-term UK outlook with the Treasury and Bank of England
carrying a heavy responsibility. The immediate focus will be on Bank of
England monetary policy meeting on November 3rd, which will coincide
with the latest inflation report.
At the August MPC meeting,
there were comments that a majority of members expected that monetary
policy would be eased further before the end of 2016 if the economy
performed in line with the bank’s expectations.
Since then, the overall tone of indicators has been slightly stronger
than expected, especially for consumer spending, although there has
been some evidence of moderation in PMI surveys. Overall, the economy
has performed slightly better than expected since the August meeting.
Sterling has fallen sharply over the past month with the UK currency
at fresh 31-year lows against the dollar. There will inevitably an
impact in pushing inflation higher, although bank officials have
expressed the opinion that the immediate increase in prices has been
weaker than expected.
The government’s Autumn Statement is due for release on November
23rd. and the bank will inevitably be briefed on its content ahead of
Markets have been expecting the government to deliver a significant
boost to spending to help support the economy, potentially through the
announcement of additional construction spending.
US banks want a longer transition period than 2 years
has heard that US banks want the financial industry shielded for a
longer period than the 2 years under article 50. Bank Execs have spoken
to the European Commission to say they will need longer to prepare and
transition no matter what new arrangements are made with the UK.
They would like to keep full access to the single market as well as current regulation for several years.
senior EU source told Buzzfeed that UK officials said banks wanted a 5
year transition period. Sources also said that banks will ramp up
lobbying of both the EU and UK into a full campaign, which will
highlight uncertainty over jobs and investments if their demands are not
Recently we've heard all about banks and their
views on relocating and the possibility of job losses but that's all
surface noise. This story highlights that deeper down the banks want
greater certainty over what may come from Brexit negotiations, and are
prepared to threaten to get it. In the wider picture, this is
potentially positive news as it makes it more likely that banks will be
looking to stay in London, if they get the right conditions from Brexit
For all the back and forth between the UK
and EU politicians, one thing they are all concerned about is the
potential financial fallout from Brexit, as that's where the biggest
stability risks lie. The banks themselves are going play a very big part
in how that turns out.
Brexit - secret audio of PM May with Goldman Sachs on what she really thinks
This is from The Guardian, what they say is "a secret audience with investment bankers a month before the EU referendum."
Theresa May privately warned that companies would leave the UK if the country voted for Brexit
reveals she had numerous concerns about Britain leaving the EU
think the economic arguments are clear," she said. "I think being part
of a 500-million trading bloc is significant for us. I think, as I was
saying to you a little earlier, that one of the issues is that a lot of
people will invest here in the UK because it is the UK in Europe.
we were not in Europe, I think there would be firms and companies who
would be looking to say, do they need to develop a mainland Europe
presence rather than a UK presence? So I think there are definite
benefits for us in economic terms."
form the usual arguments he acknowledged that the UK was centrally
important to the financial world but that he may still have to move
firms and families abroad.
Inside the warnings about
moving staff and operations he also touched on the fact that banks an
institutions might use Brexit to look locations as a whole and whether
they need operations in so many countries. That sounds like someone who
sees a big cost saving flashing in his eyes.
He also said it wasn't a shoe-in that banks would move to Europe and may choose to go to the US instead.
Today's UK press in full cry about the UK High Court's Brexit ruling 5 Nov
BBC reporting a swathe of reaction this morning
The opposition Labour Party has urged the government to
come out and defend the three judges behind the controversial High Court
ruling on the process of leaving the EU.
The Daily Mail branded
them "Enemies of the people", while the Daily Express said the ruling
had marked "the day democracy died".
Labour called the silence of Justice Secretary Liz Truss "embarrassing" and said she had "let down" the judiciary.
On Thursday, the court ruled Parliament should vote on triggering Article 50.
judges found that the government could not start the formal process of
leaving the EU - the triggering of Article 50 - by using the royal
prerogative alone, and would need the backing of Parliament. That would
require publishing legislation to be debated by the Commons and the
The debate/conjecture continues and was ever thus
Full Beeb coverage here and Reuters here with plenty of background reading for the week-end