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22 January 2017 |
The last week has witnessed the inauguration of Trump and increasing discussion about what Brexit means. Uncertainty over the British economy is emerging and 2017 has no doubt begun with increasing apprehension over what the year will bring for not only Britain but the world. Whilst many try to remain optimistic, is this just a façade for the actual storm that is about to emerge?
As individuals await the outcome of the Miller case, further analysis and comments from politicians have emerged as opinion continues to lead research and analysis in attempt to stop Brexit and prove that it is an unfair decision. The Guardian this week reports how despite reports that Brexit was caused and due to immigration concerns, the younger generation of Brexit voters actually do not share great opinion on the matter. Instead, they care more about future job prospects. This concern is shared by Jeremy Corbyn, Labour Party Leader as he believes that there will be huge job losses. This is something in which has been feared and threatened throughout the campaign, but what is the reality? In the short term it is unlikely. The city of London in particular will probably remain an economic centre. This may mean that there might not necessarily be job losses, but there could be some more fierce competition. Currently, sharing an opinion on Brexit is difficult as it is yet to be understood. Whilst contingency plans are being made, many businesses are still waiting for the Government’s plans. Meanwhile the ECB has warned that ‘it will be difficult for the UK to hang on to its valuable euro-clearing business after Brexit, calling for EU institutions to seek more, not less, oversight of the trade in London once Britain’ leaves the EU reports the Financial Times. If Europe does take this approach, how will London and Britain respond?
With the media’s light currently on the UK, what is the situation in Europe? The economic situation appears to be positive. Whilst many Europeans feared Brexit as much as Britain, Brexit voters have suggested that Europe will feel the impact more than the UK. However, this thesis appears to be wrong. The Wall Street Journal reports this week that the Eurozone confidence is at its highest in the past two years this is despite the Brexit vote. Nonetheless, Reuters warns a potential problem that could threaten this confidence. Hacking is now one of the biggest threats facing European banks and it is such a fear that the EU is considering forming a stress test to ensure appropriate defences are enforced. With many banks struggling to meet targets on current stress tests, how will they cope with these potential new measures?
With increasing uncertainty about future trade, British Prime Minister Theresa May tries to secure future confidence in the economy with a planned trip to China. Whilst China is renowned for its huge export market, it would also be a perfect match for the UK if it can find an appropriate good or service to trade with China as this would help reduce the current balance of goods deficit. Despite the current lack of optimism for the English economy, the latest figures for inflation appear encouraging. Inflation, which has most recently sat closer to the lower end of the Monetary Policy Committee’s 1-3% marker, has this month been reported at 1.6% which makes it nearer to the MPC’s ideal of 2%. In light of next week’s Miller decision and the month’s ahead, it will be interesting to see how the British economy and in between the London Stock Exchange deal with the various current events.
The biggest news of this week is the controversy over Trump’s inauguration. Whilst the news that Donald J Trump would become the 45th President of the US hit in November, the result became real this week. His inauguration greatly contrasted to Obama’s in 2009 with protests occurring both on the day as well as in the days following. In the last few days, Trump has already hinted about immediate enforcement of his policies that helped him win the Presidency. This includes his vow to build a wall between the U.S. and Mexico in addition to exploring new trading links outside of China. Consequently, this has led to reactions from both Mexico and China. Mexico, reports Reuters, has warned a ‘mirror’ policy similar to the US’ aggressive approach to its citizens, whilst China simply warns against a trading war, explains various intelligence informing the Guardian. The next week will be one to watch as Trump embarks on his first week in office.
It is not good news for JP Morgan this week as it is having to pay $55 million over racial discrimination made against mortgage borrowers. Meanwhile, new regulations appear to be on their way in China as it is demanded that all apps join a register. The BBC explains the reasoning behind the decision as ‘The Cyberspace Administration of China (CAC) said the move would help "promote the healthy and orderly development of the mobile internet".’