By end March, the UK will trigger the nuclear button splitting it from the European Union. A landmark decision which will determine both parties’ future, irrespective of the side of the English Channel they find themselves on.
BoAML | After Brexit, we followed through on our scenario analysis, penciling in a full-blown UK recession, cutting 0.5% off of Euro Area growth and slicing 0.2% off of US and global growth. Events since Brexit have not changed our call. The pound has plunged more than 11% since the vote, and both consumer and business confidence have tumbled.
Time is moving on. After the more than satisfactory agreement reached by Prime Minister David Cameron after renegotiating the UK’s relationship with the European Union, the countdown to the June 23rd referendum has begun. And as happened with the Scottish referendum, the British government is ready to bring out all the big guns.
The sale of Telefonica’s O2 to Hong Kong telecoms giant Hutchison remains up in the air. And the European Commission (EC), which has the final responsibility for the outcome of the transaction, is still being a dog in a manger, under pressure from the UK authorities.
The Chancellor’s latest Budget saw the cumulative forecast for government borrowing over the next five years revised up by close to GBP 40bn. This reflects both weaker cyclical growth and also the Office for Budget Responsibility (OBR) taking a gloomier view on UK trend productivity growth.
UBS | A date for referendum is set and the pound is getting pounded. The United Kingdom reached an agreement with the European Union and the UK announced that the referendum vote will take place on 23 June 2016.
LONDON | UBS analysts | UBS expects the ECB to widen its asset purchase programme to include corporate, parastatal and sovereign bonds on 5 March 2015. Our base case is for €1 trillion of sovereign bond purchases to be undertaken over a two-year time horizon. In this note, we examine how a broadening of the ECB’s QE programme is likely to impact the UK economy and sterling-denominated asset classes.
LONDON | By Víctor Jiménez | Raise the main interest rate? Certainly not. Or not yet, anyway. While the US economy is not showing clear signs of having overcome the assisted breathing phase (i.e. printing money or the recently wound up phase of quantitative easing that the Fed finished two weeks ago), the chances are that the Bank of England will keep the price of the pound at a very low level.
madrid | By Álex García
MADRID | By J.P. Marín Arrese | Bets heavily lean on the No campaign snatching victory tomorrow from the jaws of defeat in the Scottish referendum. Trust professional gamblers for picking out the winning horse. The prospects of a yes vote on independence have suddenly started to look dim.