For the moment, it appears the ship is no longer listing or without power, but business and banks are asking if those on deck know which way we’re heading.
This columnist has had a few days abroad and offers these quick catch ups for today. Firstly, during a brief stop in Switzerland I noticed an interesting proposal in the news from a Swiss banker about forming an alliance of the Switzerland, Singapore, Hong Kong, others and the UK (London) financial centres. I think highly of the achievements of the non-UK centres and their specialisations, but I was taken by how quickly such an association implied London’s future as a regional, off-shore or specialist centre, whereas two weeks ago London’s only international comparator was New York and any sentence with the two always finished with ‘London is the international centre’!
The UK’s Chancellor is out there travelling and trying to inspire confidence in UK finance and Parliament, the governing party, at least, has quickly selected a new Prime Minister, while the Bank of England is saying the right things about liquidity, yet there is the lingering question of what comes next or inevitably what will be the UK’s terms of trade. Thus, for the moment, it appears the ship is no longer listing or without power, but business and banks are asking if those on deck know which way we’re heading. Many surveys indicate weakening consumer and business confidence and a slowdown in UK business activity. The UK ship rapidly needs to identify a clear direction and get full steam ahead before weakening confidence begins to feed upon itself. Banks could do worse than increasing the frequency of speaking with clients and customers to identify increasing and new risks.
Dr Peter Hahn is the Henry Grunfeld Professor of Banking at ifs. You can read his entire series on Brexit and it's implications here.