Banks

BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

Continue Reading

Economy

Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

Continue Reading

Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Categorized | Economy

BDI warns of ‘ill will’ to UK over Brexit


Posted on September 29, 2016

COLOGNE, GERMANY - NOVEMBER 22: Markus Kerber, member of the board of Bundesverbandes der Deutschen Industrie poses for a picture on November 22, 2013 in Cologne, Germany. (Photo by Ute Grabowsky/Photothek via Getty Images)

Markus Kerber, director-general of the BDI, Germany’s leading business body

The head of Germany’s leading business body says the UK should not underestimate the “political ill will” in Europe, and that London would be better off seeking a hard Brexit rather than a fudge that creates “lingering uncertainty”.

Markus Ke
rber, the director-general of the BDI, told the BBC Today programme on Thursday: “If British decision makers look very hard at what it is that they want, and what it will be that they get, then there is no other option than the hard Brexit.”

    His comments come as divisions emerge in the British government over what sort of trade relations the UK should be seeking in the negotiations on the UK’s exit from the EU, with some ministers arguing it is critical to maintain access to the single market.

    However Mr Kerber said: “It is better to have a hard Brexit that works than to have a fudge in the middle that may have to be renegotiated and doesn’t politically work and you have uncertainty lingering on.”

    Mr Kerber acknowledged the UK was a key market for German industry, taking 7.5 per cent of German exports. But he made clear the EU and Germany would not give the UK a preferential trade deal.

    “Well 7.5 per cent is a big number but 92.5 per cent goes somewhere else. The vast majority goes to other European countries. So, as much as we would like to uphold our very good relations with British customers, it is extremely important for us not to alienate other European markets.”

    Britain’s civil service scales up to meet Brexit challenge

    Department for Exiting the EU to double in size but uncertainty is creating strains

    He also warned that “the political ill will in Europe is much, much bigger than the economic rationality”, alluding to the anger felt in EU capitals that the UK is now quitting the bloc having been a champion of the single market project and one of the strongest supporters of enlarging EU membership.

    “If you look at the fact that the extension, the enlargement of the European Union to eastern and central Europe, was at the core of British strategising and it’s exactly those countries whose migrants are causing headaches in Great Britain, you will find it relatively easy to understand why the political ill will in Europe is much, much bigger than the economic rationality,” he said.

    Mr Kerber’s comments mark a significant hardening in the BDI’s position. In July he told the Financial Times: “We should not talk about punishing people, if we don’t know that we might be punished ourselves.”

    In separate comments in the immediate aftermath of the June vote, he said imposing trade barriers on the UK and protectionist measures “would be a very, very foolish thing”.

    The BDI at that stage was urging “politicians on both sides to come up with a trade regime that enables us to uphold and maintain the levels of trade we have”.

    You need JavaScript active on your browser in order to see this video.

    No video