Brexit: MPs vote to block no-deal

The UK Parliament has today voted to block the no-deal Brexit scenario. According to this bill, the Prime Minister will have to seek Brexit delay if no new agreement has been made by the 19th October. The bill was voted by numbers 327 to 299. This result has been a defeat for the new PM Boris Johnson, which has been against the delay of the exit time.

The Parliament also voted down the PM´s attempt for snap general elections, which would have needed two thirds of MPs to win the case.

On Wednesday the Treasury Committee published the letter of the Bank of England Governor Mark  Carney regarding the new updated Brexit perceptions. The BoE says that in no-deal Brexit case the economic impact would not be so severe than the bank´s forecast in November. This is due to the situation that there has been preparations by companies and government for the new trade situation.

– UK banks are capitalised to withstand much more adverse combinations of domestic and global economic shocks and to keep serving the UK´s households and businesses. The UK banks have sufficient capital to continue lending through both worst-case, disorderly Brexit and a global trade war, Mr Carney wrote in the letter.

The stocks closed slightly up in London on Wednesday and the FTSE-index was up 0,59 % to 7311 points. The UK sterling was trading also up 0,02 % at 1,23 dollars.

 

 

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Brexit: Is there democracy?

After several months fierce debate over the Brexit agreement and its content, the next week will be historic for the UK economy and the country´s citizens. The Parliament is voting on Tuesday about the Brexit-deal and it will then give more guidance, how the Brexit-deal is going further and how the exit will happen on March this year.

The UK Prime Minister Theresa May and the Bank of England have warned of the non-deal Brexit. This means that if the Parliament rejects the negotiated Brexit-deal by the PM, this would be the worst scenario for the UK´s economy and its citizens, according to Central Bank´s analysis. The analysis, which was published in December, highlights that this would mean dramatically lower property prises, market volatility and  severe difficulties in trade for goods and services.

Today on Sunday, the PM Theresa May wrote in Sunday Express about her feelings and thoughts. Her message was clear: “It is time to forget the games and do what is right for the country”. She also pointed that by rejecting her Brexit-deal would mean that the Parliament has forgotten the original Brexit-vote and thus undermined the deomocracy.

In the BBC TV Labour leader Jeremy Corbyn told in today´s interview that his own view is that he would rather get a negotiated deal now and stop the danger of a no-deal exit from the EU.

Also the Japanese Prime Minister Shinzo Abe, who was visting the UK Cabinet last week in the UK,  sent his greetings that “the whole world want UK to avoid no-deal Brexit” and gave his full-support for the UK-EU deal.

Theresa May and her Cabinet have been discussing with the EU leaders about the Irish border issue ( a new physical border)  during the December and January time. This issue is sensitive for the UK, while the critics see this border issue as an binding element for the UK to follow the EU rules forever.  The new border would be between the Northern Ireland and the Republic of Ireland.

The UK economy saw the worst Christmas sales for years while the consumer confidence was weak due to Brexit. The UK economy is like in a war situation: the inventories are been filled with foods and drugs if the non-deal Brexit would cause chaos in the customs during the spring time. Travellers have been warned for the longer waiting times in the customs.

According to the Band of England´s Governor Mark Carney, the banks and the banking system are prepared for the worst, if this would be the case.

So, what to expect from the next week? The market volatility is expected to continue, but the traders and markets are looking for the Tuesday  UK decision until they make any big decisions. The markets are doing the thing PM May wished for today.

 

 

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Global stocks down – BoE considering green tests for banks

The global stock market continued the downward trend on Monday. S&P 500 -index ended down 2,08 % to 2545 points and Dow Jones -index 2,11 % to 23592 points. Tech-index Nasdaq ended down 2,27 % to 6753 points.

Global economic growth concerns continued in the markets. Markets were also looking at the Federal Reserve meeting this week about the future interest rates.

France decided to introduce the digital tax, starting from the January 1st. This means that big tech-companies must pay “digital tax” from their revenues. This will be implemented to big tech companies like Apple, Google, Facebook and Amazon. France expects that the tax will be about 500 million euros a year.

In Europe the stocks were also down. In Germany the Dax-index was down 0,86 % to 10772 points, in France, Paris the CAC 40 -index ended down 1,11 % to 4799 points and in London City, the FTSE 100-index was ended down 1,05 % to 6773 points.

The Bank of England´s governor Mark Carney told to FT, that he is considering of green stress tests for banks. This would mean that the national banks would be tested how they  can manage Climate Change risks and opportunities in their operations.

According to the bank survey, only 10 % of the banks were taking long enough view of the climate related issues. The final decision of the green stress test will be made by the central bank´s financial policy commitee.

In the Brexit-update, the UK Prime Minister Theresa May told that the vote about the Brexit-deal would happen in mid January in the Parliament.

In Asia, Nikkei 225 index was among the few indexes to gain on Monday trading. It ended up 0,62 % to 21506 points., In Hong Kong the Hang Seng  index ended down 0,03 % to 26 087 points.

Euro was unchanged at 1,13 dollars.

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