Brexit

“Could Brexit Boost International Trade By Enabling Free Trade Zones In The UK?”

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Source: Crowe Clark Whitehill via Mondaq, 18 July 2017

“There has been much debate about whether Brexit will have a positive or negative impact on the UK’s international trade. For many, leaving the EU presents many questions to which the answers are unclear. But, in the continuous mist of uncertainty there could be a potential bright side to Brexit, where international trade zones are concerned, in the form of Free Trade Zones.”

“Free Trade Zones are widely used across the world, particularly in the US, South America, Canada, Middle East and Asia. The precise format varies, but it is very common for governments to use Free Trade Zones to encourage local manufacturing. They can also be used to simplify, or remove, import and local tax obligations for goods that are imported into the zones for manufacturing or processing.”

Robert Marchant, of Crowe Clark Whitehill, says “Clearly, the establishment of Free Trade Zones themselves will only help the UK economy if the port infrastructure is in place to support and assist UK manufacturers. A quick internet search shows that the UK is one of Europe’s biggest importers and exporters and my clients tell me that the UK has excellent port facilities; which suggests that the infrastructure is in place and could therefore be a platform for the creation of UK Free Trade Zones.”

Source article here

 

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Carney warns EU on risks of Brexit

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Source: bbc.co.uk 11.01.2017

Mark Carney has put his finger on one of the biggest debates developing in the City at the moment.

Brexit may hold risks for Britain – the economy and the supremacy of London as Europe’s financial capital being two of them.

But the rest of the European Union also faces risks.

And, according to the governor, those risks are greater for the continent.

Source article here

 

Leaked Deloitte Brexit memo “not commissioned by the Cabinet Office”

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Source: The Telegraph 15.11.2016

It is now known that the damaging memo, which was written on Nov 7 by Keith Leslie, a partner at Deloitte, had been intended for an “internal audience”. David Sproul, the chief executive of Deloitte UK, was a prominent Remain campaigner and signed a letter calling for the UK to remain in the EU.

Iain Duncan Smith, former work and pensions secretary, said that Deloitte should be stripped of Government contracts, “I don’t think this was an accident, this was quite deliberate. They were determined to do as much damage as possible.”

“This non-commissioned report is utterly bogus, gleaned from newspaper cuttings. The Government doesn’t need any more civil servants. What a load of old rubbish.”

After a day of criticism Deloitte released a statement admitting that the memo was “not commissioned by the Cabinet Office” and was “conducted without access to No 10 or input from other government departments”.

Source article here

 

Brexit: legal implications and potential impact on M&A activity

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Source: Davis Polk & Wardwell LLP, July 27 2016

On June 23 2016, the UK electorate voted to leave the European Union, a process commonly called ‘Brexit’.

The referendum was advisory rather than mandatory so it will have no immediate legal consequences. It will, however, have a profound long-term effect.

As the next steps will be driven by UK and EU politics, it is difficult to predict the future of the United Kingdom’s relationship with the European Union and their impact on M&A activity.

Source article here

 

 

15% corporate tax rate – will this alone be enough to encourage FDI? asks KPMG

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Source: kpmg.com press release 4 July 2016

“Whilst from a policy perspective it may help make the UK a “super-competitive economy”, a reduction in rates will likely not be enough on its own to drive FDI (Foreign Direct Investment). KPMG surveys of clients have consistently concluded that companies want stability, predictability and certainty, both in economic (including tax) and political terms. Whilst the current political and economic volatility prevails and uncertainty over a post-Brexit UK remains, companies may well be reluctant to invest in the UK.”

Source press release here

 

Standard Life shuts property fund amid rush of Brexit withdrawals

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Source: the guardian website 4th July 2016

Investors in Standard Life’s property funds have been told that they cannot withdraw their money, after the firm acted to stop a rush of withdrawals following the UK’s decision to leave the EU.

The firm halted trading on its Standard Life Investments UK Real Estate Fund and associated funds at midday on Monday, citing “exceptional market circumstances” for the decision. It said the suspension would remain in place until it is “practicable” to lift it, and that it would review the decision at least every 28 days.

Adrian Lowcock, head of investing at AXA Wealth, said the suspension brought back into focus the issues with investing in open-ended commercial property funds.

“During the financial crisis many investors were stuck in funds which had closed to redemptions as liquidity dried up,” he said. “However, whilst there is a short-term issue with the asset class, I do not think this will lead to long-term closure of property funds as it is driven by asset allocation decisions not by investors needing access to money.”

Read theguardian.com story here

 

London’s City braces for historic dealing day

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Source: BBC  22 June 2016

“City of London dealing rooms will be alight on referendum night as firms brace for what could be the most dramatic trading day since Lehman Brothers collapsed in 2009.”

BBC Story here

 

EU referendum: OECD warning of ‘Brexit tax’ sparks row

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BBC Report 27th April 2016

Leaving the EU would be the equivalent of imposing an additional “tax” of one month’s income on UK workers, a leading economic international body has said.

OECD secretary general Angel Gurria told the BBC that he had no doubt that leaving would be a “bad decision” and expressed surprise that the UK was even contemplating such a move.

“Brexit is like a tax. It is the equivalent to roughly missing out on about one month’s income within four years but then it carries on to 2030,” the former Mexican politician told BBC Radio 4’s Today programme.

But economist and Leave campaigner Andrew Lillico said the figures were “very implausible” because they assumed that the UK would not be able to secure a trade deal of any kind with the EU before 2020 or preferential deals with other countries before 2023.

BBC Report here

 

 

UK is top for inbound acquisitions

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The UK was the number one major European economic target for inbound deals from the emerging markets during the second half of 2015, according to KPMG’s Cross-Border Deals Tracker.

Andrew Nicholson, head of M&A for KPMG in the UK, said: “Both the US and UK have been seen by many as being at the forefront of the economic recovery, so it is not surprising that both saw an influx of interest from emerging market suitors acquiring target companies.”

However, overseas investors are factoring in Brexit risk, so with the vote only ten weeks away they are not minded to progress transactions until the outcome is known.

KPMG press release here

 

Brexit campaign is doomed

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The UK’s “Brexit” campaign is doomed – if bookmakers are right again.

“As we edge closer to the EU referendum on June 23, the latest opinion polls put the Remain and Leave campaigns either neck and neck or at least close together.

But the reputation of opinion polls has plummeted following their abject failure to predict the winner of last year’s general election. According to a recent independent review by Professor Patrick Sturgis of the University of Southampton, inadequate sampling procedures led to biased estimates of party support.

Prediction markets, which are often based on betting odds, are an increasingly popular alternative for predicting election outcomes. When you look at their past performance, they have been relatively successful.”

Full article, by David Bell, Professor of Economics, University of Stirling, and posted in “The Conversation”