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EU can trounce Trump in the ongoing trade war ‘by using Brexit tactics’

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Brexit EU US Trade war

Last updated on September 24th, 2018

The German media has claimed that if Brussels adopts the same tactics it has used in the Brexit negotiations, the European Union can beat Donald Trump in a trade war.

According to Der Spiegel, a Hamburg-based magazine, both the United States and Britain “have tried to divide the European Union (EU)”. However, if member states stay united, any threats to the future of the alliance can be overcome.

The news publication said that in order to accept short term losses for long term gains, the key to the EU’s negotiating strategy is being prepared.

Markus Becker, the EU correspondent of the magazine, in his piece said that after seeing how the Brexit talks have progressed, Europeans have good reason to be confident.

He said, “In the meantime British Brexit hardliners speak of a national humiliation, and not without reason. The reason is simple: the cohesion of the common EU single market is much more important to the economy in the long term than to allow the British a pleasant Brexit. If need be, industry and governments of the EU27 are willing to accept short-term losses.”

He insisted that the same strategy of cohesion would also work for Donald Trump.

Becker said, “Like Trump, the British have tried to divide the EU. And like Trump, they also have considerable economic threat potential.”

On Wednesday, Trump met with Jean-Claude Juncker, the European Commission President. Both of them seem to end the trade war between the traditionally close allies.

Donald Trump in June imposed levies on steel and aluminium imports which gave rise to tit-for-tat tariffs. Responding to that, Brussels composed a list of American-made products to hit them with levies.

Trump had threatened to target the automotive industry and expand his trade war. This move would have hit Germany severely.

However, as per the talks at the White House, both the sides agreed to stop on imposing any more tariffs, until further discussion on the trade takes place.

Trump’s pledge to not impose levies on European-built cars is against his threat. This has proved to be a big win for Brussels. He said that the EU has agreed to purchase “lots of” soybeans from American farmers.

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Edward Bramson to be Kept Away from Barclays’ Board

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Edward Bramson

Barclays’ bosses in their recent deliberation asked shareholders to maintain distance from Edward Bramson also known as the ‘toxic’ corporate raider. The warning has come up in context to the board voting that is due to take place.

Barclays’ heads have been extremely concerned about the moves taken by Bramson to be a part of the board. It has been stated that he has been indulged in influencing and pushing investors at Barclays to vote for him in order for him to get a position in the board.

Barclays chairman John McFarlane has stressed that such a decision can be worrisome and asked investors to ensure that Bramson should be blocked from becoming a non-executive director for the sake of all shareholders.

As per stats, Edward Bramson controls 5.51 percent of Barclays’ stakes and is interested in slashing its prized investment. In order to address the concerns related to his intents, the Chairman is taking certain steps like warning the investors.

Chairman McFarlane, in order to address the concern, disclosed the case to the stakeholders in a strong letter to the investors. In his letter, he has openly addressed the issue of Bonus. As per his explanation, if Bramson succeeds in achieving his intended position, it would lead to a complicated Bonus structure that will further lead to Bramson procuring tens of millions of pounds in fees.

McFarlane said, “Mr Bramson would likely seek to undertake a new round of restructuring and review which, in our view, would significantly destabilise the group, impede progress and result in a destruction of shareholder value.

“The board believes that the interests of Mr Bramson are fundamentally misaligned with the interests of shareholders.”

He further explained that “Based on his track record, the board believes the presence of Mr Bramson on the board would be unnecessarily destabilising for management and the talent we employ more broadly.”

The chairman also warned about Bramson’s plan for cuts have already been dismissed because they are not in the interest of profit generation.

He also said that though Edward Bramson has the record of turning around failing business but his approach to this involves sacking of managers, cutting the staff which is not a solution but raises various operational problems. And this time he is eying Barclays.

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Uncertain Brexit Deal Propels Stressed Housing Market

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Brexit Deal

Last updated on March 21st, 2019

This month is undoubtedly the most crucial for Britain, which is due to leave the European Union anytime soon. In an already messed up decision, several unexpected and terrible circumstances have surfaced in the three years since the public referendum.

While the chaos only escalates, the uncertainties for the UK market are also soaring. Particularly, the housing market is in dismay due to the approaching Brexit deadline and no clarity over the deal.

The conflict between the Tory MPs and Prime Minister Theresa May over the twice-negotiated and defeated withdrawal agreement, is going through a series of votes in the Parliament. Recently, the MPs voted in favour of extending the Article 50 to the end of June, but the final decision depends on the unanimous vote of the EU member states.

As the Parliament has voted down the withdrawal agreement, a no-deal Brexit remains a default position in case no agreement is reached between Britain and the bloc. The vagueness of the outcome and the potential consequences of a no-deal, have left several real estate businesses and financial experts in a dilemma.

Last year in September, Bank of England governor Mark Carney raised a warning that leaving the union without a deal could lead house prices tumbling by a third. In February, he added that the UK’s growth would be ‘guaranteed’ to fall in the event of a no-deal Brexit.

House market experts analysed that since the Brexit vote in June 2016, the property prices did slug. The pattern also reflected seasonal changes, where the prices went up in spring and remain stagnate during summer, during both 2016 and 2017.

Besides, in the post-summer period of 2018 with Brexit deadline approaching, the house prices suffered a bigger dip. Statistics reveal that they went down to £230,630 in November from £232,797 in August. An year-on-year house price analysis also reflected that in the year after the referendum the rate of property prices growth dropped everywhere in the UK, except Scotland.

While the lawmakers are striving to strike the best possible deal before March 29, the prospects are much lower considering the feuds. Industry experts have highlighted that the Brexit is capable of having range of affects on the UK housing market, both before and after the exit.

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Erratic Brexit Negatively Impacts UK Manufacturing Output

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Brexit

Last updated on March 20th, 2019

The growing uncertainties in the United Kingdom over the Brexit issue has not just disrupted the political landscape of the country, but also impacted the market and business. A recent monthly survey revealed that the continuous anarchy over Britain leaving the European Union has reflected a negative impact on the output of manufacturing firms.

The poll, conducted by the Confederation of British Industry (CBI) on 366 manufacturers, highlighted that the carmakers have suffered because of the ongoing situation, as their output dropped in February.

According to the statistics provided, over the last three months, 27 per cent of the firms increased productivity, while 20 per cent saw a downfall. In January, the balance of plus 16 points went down to plus seven. Moreover, the output volume growth also weakened in the three months to February.

While the order books fortified in the month, economists warned that the survey probably was being slow to apprehend a downturn in output manufacturing. The study revealed that the expansion was largely driven by chemicals, food, drink, and tobacco sub-sectors, while manufacturing of vehicles was a crucial route to growth.

The CBI explained that a weaker global economic momentum implies less demand for exports. However, the potential threat of a no-deal Brexit poses a risk to the prospect for manufacturers in the UK.

The CBI head of economic Intelligence, Anna Leach stated, “UK manufacturing activity has moderated at the same time as headwinds from Brexit uncertainty and a weaker global trading environment have grown.”

Calling this time crucial for Brexit negotiations to support the UK manufacturing industry, she said that “the clock is ticking quickly towards crisis point”. Leach urged that the politicians on the two sides should “come to agreement on the terms of a Brexit deal as soon as possible, to allow our manufacturers to continue to create, make and trade their goods with certainty.”

The chair of the CBI’s manufacturing council, Tom Crotty said, “We are now just weeks away from the very real prospect of a ‘no deal’ Brexit, which would be hugely damaging to manufacturers up and down the country. The political paralysis on Brexit must urgently give way to compromise and an acceptable deal being struck.”

It’s not just the manufacturing companies, but several other sectors that are bearing the adversities of the turmoil created by Brexit in the country. A survey conducted last week by the German DIHK industry association said that the firms in link with Britain are currently operating in less favourable business conditions.

With the chances of a no-deal Brexit increasing, many have asserted that the year might turn out worse for the businesses. Nearly 13 per cent of the DIHK survey respondents also stated their plans to shift toward Germany and other European Union countries because of Brexit. While the Britain is already suffering from the consequences of the idea of a Brexit, it is uncertain how things would turn after March 29, when the UK is due to leave the bloc.

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Financial Regulators: Vulnerable Customers Must Be Dealt with Care

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Financial Regulators

Last updated on February 14th, 2019

Debt, often deemed as the cheapest and best source of finance, is reportedly creating problems for the common people. Therefore, keeping in mind the scenario financial regulators have urged the debt collection firms to improve the way they deal with vulnerable customers.

Nearly 32% of the complaints dealt with by the Financial Ombudsman Service (FOS) in 2018 relating to debt collection were upheld in consumers’ favor. However, uphold rates on some issues with debt collection were higher. As a reference, more than 54% of the complaints on the breaches of confidentiality were upheld.

The figures clearly show that a lack of empathy and flexibility in the proceedings is a major contributor to the problems of vulnerable customers.

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service said: “In the past three years we have investigated thousands of complaints from consumers about debt collection companies. These complaints cover a wide range of issues, including aggressive customer service tactics, disputes about the size of the debt, breaches of confidentiality and failure to carry out instructions.” She added, “we have seen cases where a lack of empathy or flexibility from businesses can create more problems for people who are struggling, and who may be in vulnerable circumstances.”

According to the stats, FOS handled around 3,300 inquires about debt collection and received more than 1000 complaints for investigation. These included cover credit and consumer loans, such as mortgages, credit cards, and personal or business loans.

The issues, therefore, created a ruckus and left the customers exposed to unexpected situations. Also, of the total complaints looked into by the FOS, one in five were about whether the consumer was charged the right amount of money or not. One in seven complaints were about service related issues and another 13% where the customer told the service that the debt being asked for did not belong to them.

Consumers of debt are often attracted towards it following the price at which it is available. Besides, even businesses made the situation difficult for consumers who took money, but were unable to return it, in terms of how much money they were willing to accept last year.

“We would encourage anyone who has a dispute with a debt collection company to contact us, ” Wayman said. Further explaining, “In our research we did see examples of good practice from companies, and we would encourage all debt collection companies to learn from and follow industry good practice.”

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Post the Rejection of Theresa May’s Withdrawal Agreement, Pound Surges

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The Pound

Following the defeat of Prime Minister Theresa May’s Brexit withdrawal agreement, the pound witnessed a surge on Tuesday.

May’s Brexit deal was rejected by 230 votes – one of the largest defeats for a sitting government in the history, with MPs voting 432 votes to 202 to reject the deal.

Opposition Labour leader Jeremy Corbyn has called in a vote of no confidence in the government that could result in a general election. The vote is to be held at 7pm Wednesday.

MPs are expected to debate the no confidence motion called in by the opposition, for around six hours after May’s questions at noon. Corbyn said it would allow the House of Commons to “give its verdict on the sheer incompetence of this government”.

The pound raised more than a cent to stand above $1.28 after the vote on the withdrawal agreement. It was last trading at $1.2871, up 0.06 percent on the day.

The pound rallied up 0.5 percent against the euro at 88.7 pence.

The rejection came as a huge blow to the Prime Minister, who had spent more than two years negotiating a deal with the European Union. The defeat was much more than what was anticipated in the market. The pound surge is based on the market expectations that the vote defeat will now push lawmakers to look for alternate options.

Amidst the growing uncertainty in the financial market, investors have been urged by UBS Global Wealth Management to limit their exposure to UK assets as the market is still vulnerable to political volatility.

‘I think the market’s take on (this defeat) is that it ups the probability of a soft Brexit ultimately evolving after a no-confidence vote,’ said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

Following the vote, UK economist Dean Turner said, Market volatility will not subside until a concrete conclusion to the process emerges.

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