- Mary Honeyball MEP (BiE expert)
Brexit deadlock causing uncertainty in financial services industry
Yet again the business industry is reporting an uncertain future post Brexit.
A report published by the CBI and PwC has found that growth in the UK financial services has stagnated and, they say, this is directly related to the uncertainty over Brexit.
Furthermore, growth in other areas such as investment management and general insurance grew at what the report termed a “tepid” rate.
The other attributable factor is the slow rise in wages, which it is stated is holding back the economy.
However, the head of financial services for PwC stated that Brexit is driving uncertainty within the financial services industry.
The survey also revealed the level of concern within the sector surrounding Brexit and the specific concern within the banking sector. There is a level of apprehension in the banks’ ability to implement plans in time for Brexit; in fact a third of banks said they were “not so confident” of implementing Brexit plans by March.
Further concerns revealed that many companies are worried about the status of cross border contracts.
While the Bank of England (BoE) has put in place billions of pounds in cross border derivatives contracts to avoid market disruption, the BoE is still awaiting confirmation from the EU that it will reciprocate this plan.
Calls from within the financial services industry are clear – the Government must develop a specific strategy for the financial services industry in the scenario whereby Brexit does go ahead. The industry expects the Government to find an agreement with the EU which will continue to attract investment, jobs and develops the sector generally following Brexit.
However, Brexit is far from straight forward and the Government has still not significantly progressed talks on other matters which have been before it for many months. With just a matter of weeks until an agreement is expected it doesn’t seem hopeful that the Government will have the capacity to even get close to carrying out such talks.
This post is reproduced, with permission, from Mary Honeyball's blog.