Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

Continue Reading


Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

Continue Reading


Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

Continue Reading


RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

Continue Reading


China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

Continue Reading

Categorized | Financial

Sentiment sours in UK financial services sector

Posted on September 25, 2016

An employee manually counts 20 pound sterling banknotes in this arranged photograph inside a Travelex store, operated by Travelex Holdings Ltd., in London, U.K., on Friday, Sept. 12, 2014. The pound, already suffering its worst month in more than a year, has the potential to tumble 10 percent should the Scots vote for independence from the U.K., according to economists surveyed by Bloomberg. Photographer: Matthew Lloyd/Bloomberg©Bloomberg

Sentiment in the UK financial services industry worsened over the summer despite solid growth in business volumes and profits, reflecting the uncertainty the Brexit vote creates for the sector’s future access to European markets.

A quarterly survey conducted by the CBI business lobby and PwC found that 28 per cent of firms were less optimistic about the overall business situation than three months earlier, with 15 per cent saying they were more optimistic. It was the third consecutive quarter of deteriorating sentiment — the longest spell of pessimism since the depths of the global financial crisis.

    “The challenges facing the sector have not gone away — they’ve actually grown. Add the uncertainty caused by Brexit to low interest rates, technological change and strong competition, and it’s plain to see why optimism is falling and pressure on margins remains intense,” said Rain Newton-Smith, the CBI’s chief economist.

    This gloom is somewhat at odds with the survey’s findings on current activity. Most areas of financial services saw brisk growth in business volumes and improving growth in profitability, and expected this to continue in the coming quarter, albeit at a more moderate pace.

    Yet this picture is consistent with developments in the broader UK economy — the immediate shock of the referendum does not seem to have been as serious as many feared, but most economists still predict a sharp slowdown next year as businesses postpone investment decisions until the consequences of Brexit become clearer. For the financial services sector, the uncertainty is particularly acute, given the paramount importance to the City of “passporting” arrangements that allow firms to sell their products seamlessly elsewhere in the bloc.

    So far, EU leaders have shown little inclination to grant the UK access to passporting, or any equivalent arrangement, unless Britain accepts the rules that go with the single market, including free movement of people.

    The CBI survey found the immediate impact of the Brexit vote to be negative for a majority, but to a fairly modest degree — with more than a quarter of firms reporting some impact on their revenues, funding costs and profits, but a relatively small proportion saying it had affected their investment or hiring intentions.

    However, more than half the respondents saw changes in access to EU markets as the chief risk facing their business over the medium term.