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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/oct/17/brexit-uncertainty-uk-businesses-natwest-bank-sterling-ftse-business-live
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| UK firms face lending squeeze; IMF chief warns against no-deal Brexit - business live | UK firms face lending squeeze; IMF chief warns against no-deal Brexit - business live |
| (32 minutes later) | |
| Even if Johnson’s deal is passed on Saturday (unlikely, but not impossible), the City won’t know its long-term relationship with the EU. | Even if Johnson’s deal is passed on Saturday (unlikely, but not impossible), the City won’t know its long-term relationship with the EU. |
| Jonas Lindqvist, Head of Product Strategy for Principal Trading at trading platform Itiviti, explains: | Jonas Lindqvist, Head of Product Strategy for Principal Trading at trading platform Itiviti, explains: |
| “The champagne may well be on ice in Number 10 having reached a ‘new deal’, but the long-term effects of Brexit on European market infrastructure are still unknown. | “The champagne may well be on ice in Number 10 having reached a ‘new deal’, but the long-term effects of Brexit on European market infrastructure are still unknown. |
| Agreeing the terms of exit, which still has to go through the House of Commons, is simply transitioning from one political relationship to another. What firms are really craving is intricate details into exactly how trading on European financial markets will function. | Agreeing the terms of exit, which still has to go through the House of Commons, is simply transitioning from one political relationship to another. What firms are really craving is intricate details into exactly how trading on European financial markets will function. |
| In theory, recognition of third-country regulatory equivalence should be fairly straightforward. The UK has, after all, already implemented rules such as MiFID II. That said, there is still a huge amount of uncertainty as to what this will look like in practice. | In theory, recognition of third-country regulatory equivalence should be fairly straightforward. The UK has, after all, already implemented rules such as MiFID II. That said, there is still a huge amount of uncertainty as to what this will look like in practice. |
| During the transition period, there needs to be a clear and detailed framework for EU based firms to easily operate in the City. At least in the midst of this political psychodrama, it has been encouraging to see the FSA attempting to keep things as stable as possible.” | |
| Ricardo Evangelista, senior analyst at ActivTrades, says the DUP’s opposition has punctured the pound’s rally. | Ricardo Evangelista, senior analyst at ActivTrades, says the DUP’s opposition has punctured the pound’s rally. |
| A roller-coaster day for the pound with it almost reaching $1.30 following the announcement of a Brexit deal between the EU and the UK only to then lose all of the day’s gains in the aftermath of the refusal by the Northern Irish Democratic Unionist Party to back such an agreement. | A roller-coaster day for the pound with it almost reaching $1.30 following the announcement of a Brexit deal between the EU and the UK only to then lose all of the day’s gains in the aftermath of the refusal by the Northern Irish Democratic Unionist Party to back such an agreement. |
| It is widely assumed that without the support of the of DUP the deal is condemned to be voted down by parliament, as the hard Brexit wings of the Conservative Party made their support conditional to the deal being accepted by the DUP. In practical terms this means that a new extension to the exit date is now more likely. As a consequence the pound erased earlier gains and is now unlikely to test the $1.30 resistance level again, at least not until there is another clear solution within sight. | It is widely assumed that without the support of the of DUP the deal is condemned to be voted down by parliament, as the hard Brexit wings of the Conservative Party made their support conditional to the deal being accepted by the DUP. In practical terms this means that a new extension to the exit date is now more likely. As a consequence the pound erased earlier gains and is now unlikely to test the $1.30 resistance level again, at least not until there is another clear solution within sight. |
| Kristalina Georgieva has also warned that the difference between a Brexit deal and no deal was “quite dramatic”. | Kristalina Georgieva has also warned that the difference between a Brexit deal and no deal was “quite dramatic”. |
| The IMF has estimated that leaving without a deal would cost the U.K. between 3.5% and 5% of GDP, and knock 0.5% off EU GDP as well. | The IMF has estimated that leaving without a deal would cost the U.K. between 3.5% and 5% of GDP, and knock 0.5% off EU GDP as well. |
| The Fund’s new managing director says: | The Fund’s new managing director says: |
| “That’s quite significant.” | “That’s quite significant.” |
| No wonder she ‘jumped’ with excitement when Johnson and Juncker announced they’d reached a deal earlier today. | No wonder she ‘jumped’ with excitement when Johnson and Juncker announced they’d reached a deal earlier today. |
| Georgieva also told reporters in Washington that there would still be implications from leaving with a deal but they would be “significantly more modest” -- knocking around 2% off GDP. | Georgieva also told reporters in Washington that there would still be implications from leaving with a deal but they would be “significantly more modest” -- knocking around 2% off GDP. |
| She added: | She added: |
| “A lot of that impact has already been absorbed because anticipation of the U.K. leaving has been built over the past 3 years.” | “A lot of that impact has already been absorbed because anticipation of the U.K. leaving has been built over the past 3 years.” |
| More comments from the IMF’s new chief: | More comments from the IMF’s new chief: |
| First major press conference for @KGeorgieva as IMF MD. She quotes a Pushkin poem: “The breath of autumn begins to ice the roadway.” It’s an analogy for the state of the global economy pic.twitter.com/5wYupRiDk5 | First major press conference for @KGeorgieva as IMF MD. She quotes a Pushkin poem: “The breath of autumn begins to ice the roadway.” It’s an analogy for the state of the global economy pic.twitter.com/5wYupRiDk5 |
| IMF MD @KGeorgieva: “Of course, trade is good for jobs, growth and poverty reduction. But trade is also great for peace. Research shows when countries trade they don’t fight as much. If we want a peaceful and prosperous future we have to work on trade.” | IMF MD @KGeorgieva: “Of course, trade is good for jobs, growth and poverty reduction. But trade is also great for peace. Research shows when countries trade they don’t fight as much. If we want a peaceful and prosperous future we have to work on trade.” |
| Kristalina Georgieva, the new managing director of the IMF, is also pleased that the UK and EU have reached a new Brexit deal. | Kristalina Georgieva, the new managing director of the IMF, is also pleased that the UK and EU have reached a new Brexit deal. |
| Speaking at the Fund’s annual meeting in Washington, she says: | Speaking at the Fund’s annual meeting in Washington, she says: |
| “This is good news. This is welcome. Just like the pound which jumped, when I saw the news I jumped. | “This is good news. This is welcome. Just like the pound which jumped, when I saw the news I jumped. |
| I would very much like to see an agreement being reached” | I would very much like to see an agreement being reached” |
| I wouldn’t dare predict how Brexit will play out. But City analysts have to calculate these things. | I wouldn’t dare predict how Brexit will play out. But City analysts have to calculate these things. |
| And Oliver Harvey, macro strategist at Deutsche Bank, has estimated that there’s a 55% chance that MPs will reject this new Brexit deal on Saturday. | And Oliver Harvey, macro strategist at Deutsche Bank, has estimated that there’s a 55% chance that MPs will reject this new Brexit deal on Saturday. |
| But what happens next? Assuming it’s not ratified, Harvey sees four ways it could play out -- including Johnson winning a general election and then pushing his deal through parliament. | But what happens next? Assuming it’s not ratified, Harvey sees four ways it could play out -- including Johnson winning a general election and then pushing his deal through parliament. |
| Confirmatory referendum before election: 10% | Confirmatory referendum before election: 10% |
| General election leads to Johnson’s deal: 25% | General election leads to Johnson’s deal: 25% |
| General election leads to no deal Brexit: 10% | General election leads to no deal Brexit: 10% |
| General election leads to second referendum: 10% | General election leads to second referendum: 10% |
| BREXIT: DEUTSCHE BANK SEES 55% CHANCE TO JOHNSON'S DEAL NOT RATIFIED ON SATURDAY | BREXIT: DEUTSCHE BANK SEES 55% CHANCE TO JOHNSON'S DEAL NOT RATIFIED ON SATURDAY |
| But he cautions that there is “considerable uncertainty” about how a November election would play out. | But he cautions that there is “considerable uncertainty” about how a November election would play out. |
| Some opinion polls suggest a substantial Conservative lead while others show a smaller lead. In general, however, the Conservatives’ polling performance has improved since Mr Johnson became leader. Importantly, and as discussed above, only one scenario would reintroduce the risk of a no deal Brexit: that of the Conservatives forming a minority government with the support of the Brexit Party/DUP. | Some opinion polls suggest a substantial Conservative lead while others show a smaller lead. In general, however, the Conservatives’ polling performance has improved since Mr Johnson became leader. Importantly, and as discussed above, only one scenario would reintroduce the risk of a no deal Brexit: that of the Conservatives forming a minority government with the support of the Brexit Party/DUP. |
| David Malpass, the World Bank president, says a Brexit deal will be good for poor countries because it will end the uncertainty that has led to slower growth. | David Malpass, the World Bank president, says a Brexit deal will be good for poor countries because it will end the uncertainty that has led to slower growth. |
| “If there were clarity it would help the growth outlook quite a bit” Malpass said at a press conference in Washington. | “If there were clarity it would help the growth outlook quite a bit” Malpass said at a press conference in Washington. |
| Malpass explained that problems in advanced economies have rippled across the globe: | Malpass explained that problems in advanced economies have rippled across the globe: |
| “Uncertainty affects development because part of the slowdown in the developing world is related to the slowdown in the developed world. Europe has slowed significantly. If there was more certainty that would be very helpful.” | “Uncertainty affects development because part of the slowdown in the developing world is related to the slowdown in the developed world. Europe has slowed significantly. If there was more certainty that would be very helpful.” |
| Even by recent standards, this has been a very volatile day for the pound. | Even by recent standards, this has been a very volatile day for the pound. |
| It’s traded in a range of nearly two and half cents against the US dollar today, as hopes of a Brexit breakthrough surged, then subsided. | It’s traded in a range of nearly two and half cents against the US dollar today, as hopes of a Brexit breakthrough surged, then subsided. |
| The pound is now back to precisely where it was before news of the Brexit deal emerged. Here it is vs US$ pic.twitter.com/SfCeB5iXqO | The pound is now back to precisely where it was before news of the Brexit deal emerged. Here it is vs US$ pic.twitter.com/SfCeB5iXqO |
| $GBPUSD daily range: 1.2750-1.2990. Last spotted at 1.2802. https://t.co/esp7Jae3F4 | $GBPUSD daily range: 1.2750-1.2990. Last spotted at 1.2802. https://t.co/esp7Jae3F4 |
| The pound has also fallen back against the euro. | The pound has also fallen back against the euro. |
| Having hit a five-month high this morning, sterling is now down three-quarters of a eurocent at €1.151. | Having hit a five-month high this morning, sterling is now down three-quarters of a eurocent at €1.151. |
| Traders are concluding that MPs may well not pass Johnson’s deal on Saturday. | Traders are concluding that MPs may well not pass Johnson’s deal on Saturday. |
| "we have a deal - oh no wait, we still need approval by the House of Commons" #BrexitDeal pic.twitter.com/aiMAUzMVUr | "we have a deal - oh no wait, we still need approval by the House of Commons" #BrexitDeal pic.twitter.com/aiMAUzMVUr |
| Passing a Brexit deal would be “constructive” for the UK’s credit rating, says S&P. | Passing a Brexit deal would be “constructive” for the UK’s credit rating, says S&P. |
| The credit rating agency currently has a ‘negative’ rating on Britain, essentially a threat to downgrade the country - potentially pushing up borrowing costs. | The credit rating agency currently has a ‘negative’ rating on Britain, essentially a threat to downgrade the country - potentially pushing up borrowing costs. |
| S&P has already downgraded the UK after the 2016 EU referendum, due to the damage that Brexit could cause. | S&P has already downgraded the UK after the 2016 EU referendum, due to the damage that Brexit could cause. |
| European sovereign debt analyst Frank Gill told Reuters: | European sovereign debt analyst Frank Gill told Reuters: |
| “This is constructive news, also for the rating,” | “This is constructive news, also for the rating,” |
| Ultimately [the rating] it is going to come down to how the economy performs.” | Ultimately [the rating] it is going to come down to how the economy performs.” |
| “Even with a deal you still have enormous questions about, for example, UK financial services firms’ access to the (EU) single market.” | “Even with a deal you still have enormous questions about, for example, UK financial services firms’ access to the (EU) single market.” |
| The City’s Brexit optimism is now firmly fizzling out, as the DUP insists it won’t back Johnson’s deal. | The City’s Brexit optimism is now firmly fizzling out, as the DUP insists it won’t back Johnson’s deal. |
| The pound has dropped steadily in recent minutes, and is now back below $1.28, down almost half a cent today (and two cents below its peak this morning). | The pound has dropped steadily in recent minutes, and is now back below $1.28, down almost half a cent today (and two cents below its peak this morning). |
| Cable falls below 1.28 handle#GBP -0.53% against other currencies#GBPUSD 1.27956 -0.29%#EURGBP 0.86853 +0.68%#GBPAUD 1.87566 -1.21%#GBPJPY 139.085 -0.36%#GBPCAD 1.6858 -0.49%#GBPCHF 1.26582 -0.87%#GBPEUR 1.15137 -0.67% pic.twitter.com/nLqhxumV4J | Cable falls below 1.28 handle#GBP -0.53% against other currencies#GBPUSD 1.27956 -0.29%#EURGBP 0.86853 +0.68%#GBPAUD 1.87566 -1.21%#GBPJPY 139.085 -0.36%#GBPCAD 1.6858 -0.49%#GBPCHF 1.26582 -0.87%#GBPEUR 1.15137 -0.67% pic.twitter.com/nLqhxumV4J |
| #BREAKING N. Ireland's DUP says 'unable to support' PM Johnson's draft Brexit deal pic.twitter.com/Fb4cAoiheK | #BREAKING N. Ireland's DUP says 'unable to support' PM Johnson's draft Brexit deal pic.twitter.com/Fb4cAoiheK |