BREXIT – First signs Brexit will hit JOBS, says IoD – Corpus VEC Institutes | Virtual Ethical Careers Corpus

 

Simon Walker, Director General of the IoD

First Signs BREXIT will Hit JOBS, says IoD

Nearly two-thirds (64%) of Institute of Directors (IoD) members think the result is negative for their business, against 23% who think it is positive (with only 9% saying it makes no difference).

A third of those polled (32%) said hiring would continue at the same pace, but a quarter (24%) said they would put a freeze on recruitment, and 5% would make redundancies 1 in 5 (22%) were considering moving some of their operations outside of the UK; only 1% said they would bring operations back.

The IoD, which did not campaign during the referendum, received results from 1,092 members between 24– 26 June.

Simon Walker, director general of the IoD, said: “Businesses will be busy working out how they are going to adapt and succeed after the referendum result. But we can’t sugar-coat this; many of our members are feeling anxious. A majority of business leaders think the vote for Brexit is bad for them, and as a result plans for investment and hiring are being put on hold or scaled back.”

More than a third (36%) of IoD members said the outcome of last Thursday’s vote would cause them to cut investment in their business, against 1 in 10 (9%) who said they would increase investment. Just under half (44%) said it would not change their investment plans.

Meanwhile, CBI director-general, Carolyn Fairbairn, has laid out businesses’ priorities following the outcome of the EU referendum.

She said business leaders were determined to work with government to create the right conditions and face the upcoming challenges with confidence and resilience to achieve the best possible outcomes for the country.

The CBI is also writing to the Prime Minister, the Department for Business, Innovation and Skills and the Treasury outlining companies’ top priorities to minimise the uncertainties which could affect the UK’s future economic growth and prosperity.

Fairbairn said: “The first part of the plan must be to get strong, calm and decisive leadership in place as soon as possible. Never has there been a more important time to put the interests of the country ahead of party politics. Businesses welcome the Prime Minister’s announcement of a delay in triggering Article 50 to create breathing space, but need rapid clarity on who is making the decisions.

“Second, we must agree the principles that should underpin our new relationship with Europe and the rest of the world. At the highest level, the government should resolve publicly to preserve the openness of the UK’s economy, one of its greatest strengths.

“This means seeking to protect tariff and barrier-free access to the Single Market, ensuring companies are able to continue to attract the best people to the UK with the skills we need, while recognising public concerns about immigration. And, it means setting out clearly how the UK will agree the right international trade deals with the wider world.

“The third action we must take is to forge close and deep collaboration between business of all sizes across the UK and the government to help shape our future economic relationships. The CBI and business leaders across the UK stand ready to work with the new leaders of our country to help chart the future course, starting as soon as practically possible.”

GMB General Secretary Tim Roache called for urgent government action to protect jobs in the wake of the Brexit vote, as well as an immediate commitment from government that it will act to protect the rights of working people.

Roache said: “We’re in uncharted waters. The government needs to act straight away to secure jobs and keep the economy moving – too many working people are still carrying the can for the last economic crash, they can ill afford another one.

“What happens next cannot be the preserve of a government elected with 37% of the vote or potentially a Prime Minister who was never elected at all. The British people have spoken, many of them frustrated with business as usual, choosing to leave the EU because of the impacts of the flexible labour market and the pursuit of free trade above all else.

“Our place in the world cannot be one based on a Tory Party free-for-all, free market philosophy. A race to the bottom which prioritises the removal of trade barriers and the flexible labour market above all else will fail working people and the very voters who made their decision.”

BREXIT hits Richard Branson Hard as Virgin Group Loses Third of its Value – Corpus VEC Institutes | Virtual Ethical Careers Corpus

We’ve lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs, says Virgin boss Richard Branson

• Sir Richard wants Parliament to take a second look at the EU referendum 
• He believes Leave voters did not realise ‘what a mess’ they would cause 
• Claims Brexit campaigners misled public over consequences of leaving
• Virgin’s value has plunged and he says UK is ‘heading towards disaster’

Being part of the EU guarantees no tariffs on trade on goods and services and the free movement of workers, without the hassle of visas or work permits.

“We’re not any worse than anybody else but I suspect we’ve lost a third of our value,” Richard Branson told the “Good Morning Britain” programme. 

The impact of Britain’s vote to leave the European Union or Brexit was swift and painful for Richard Branson, founder and chairman of Virgin Group. He said on Tuesday that his group which owns shares in various companies including Virgin Media and Virgin Trains, had lost about a third of its value since last week’s vote by Britons to leave the European Union and had cancelled a deal costing some 3,000 jobs.

“We’re not any worse than anybody else but I suspect we’ve lost a third of our value,” he told the “Good Morning Britain” programme.

“We were about to do a very big deal, we’ve cancelled that deal that would have involved 3,000 jobs.”

Being part of the EU guarantees no tariffs on trade on goods and services and the free movement of workers, without the hassle of visas or work permits. Now that it is leaving, Britain will have to first negotiate its exit, which could take years, and then renegotiate new relations with Europe, which could take even longer.

With so much uncertainty looming for so long and financial markets crashing, a lot of business is suddenly in limbo. Some companies are even looking to pull back.

Multinationals that have chosen the U.K. as a base for operations across the EU are expected to reconsider some of their operations in Britain. Global banks like JPMorgan, Goldman Sachs and HSBC have said thousands could move to the mainland.

Virgin Founder: Sir Richard Branson has called on Parliament to take a second look at the referendum

Sir Richard Branson revealed today that his businesses have lost a third of their value after Brexit, adding that the decision to leave the EU has cancelled a deal worth 3,000 jobs.

The Virgin founder has called on Parliament to take a second look at the referendum and believes that those who voted Leave did not realise ‘what a mess’ the move would cause.

He claimed Brexit campaigners misled the public over the consequences of leaving and said the UK is ‘heading towards a disaster’ – insisting people deserve the chance to vote again.

Sir Richard, 65, told ITV’s Good Morning Britain today: ‘I don’t believe the public realised what a mess their vote would cost.

‘Bank shares, some of them have gone done by as much as 50 per cent, two trillion got wiped off the global stock markets, the pound has collapsed to its lowest level in 30 years, and we will go into recession unless we can actually send signals to the world very quickly that we’re going to do something about it.’

Speaking to presenters Susanna Reid and DailyMail.com U.S. Editor-at-Large Piers Morgan about his companies, Sir Richard added: ‘We’re not any worse than anybody else, but I suspect we’ve lost a third of our value which is dreadful for people in the workplace.’

He continued: ‘We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country.’

Prime Minister David Cameron’s spokesman has said that last Thursday’s vote, which produced a 52-48 majority for Brexit, was ‘decisive’ and that the Government’s focus was on delivering on it.

“This country is going to go into recession,” Sir Richard said.

TV appearance: Sir Richard and supermodel Tyra Banks (left), with whom he is working on a business pitching competition, with DailyMail.com U.S. Editor-at-Large Piers Morgan and Susanna Reid on (right) on ITV today

Sir Richard (pictured with Ms Banks) claimed Brexit campaigners misled the public over the consequences of leaving and said the UK is ‘heading towards a disaster’ – insisting people deserve the chance to vote again.

But Sir Richard said: ‘When Brexiters told the public that people were exaggerating, that there would be a financial meltdown, I think it’s been proven that they were not exaggerating.

‘One of the reasons that I think there should be a second referendum, particularly once the terms are known about what our entry into Europe’s going to cost us, (is that) the public are going to have all the facts at their fingertips. Those same 17 (million) people will be able to vote again.

“We’re heading towards a disaster” – Sir Richard Branson, Virgin Founder

‘We’re not going against it, what we’re simply saying is the fact that Brexiters told people were inaccurate. You’ve already got Nigel Farage saying the £350million that’s going to go into the health service was not true.

‘You’ve got other people who are for Brexit saying “yes, we accept we cannot stop immigration if we do this”.

‘So all I’m saying is, look, this country is going to go into recession, two of the worst days ever, banks being pounded means they’re not going to lend money, we’re going to go into recession.

Going down: This share graph for Virgin Money Holdings (UK) shows how the price has dropped by more than a third since the Brexit decision was announced last Friday

‘And that was based on people being told this would not happen, “do not worry, the fact we’re going to lose a 500-million marketplace, don’t worry about it, everything’s going to be fine”.

‘It is not fine – we’re heading towards a disaster and therefore in business, if you realise you’ve made a bad decision, you change it.

‘Now we’re not just saying overrule it, we’re saying let those people who voted have another chance, and that’s democratic.’

Sir Richard has already warned that the Leave vote has ‘opened a Pandora’s Box of negative consequences’ for Britain.

A petition on the parliamentary website calling for a second referendum has attracted more than 3.9million signatures, though it was revealed on Sunday that nearly 80,000 names have been struck off after being found to be fraudulent.

Asked whether the issue of a re-run referendum was discussed at Cabinet, Mr Cameron’s spokesman said: ‘That is not remotely on the cards. There was a decisive result and the focus of the Government is to get on and deliver that.’

MailOnline has asked Virgin for clarification as to what exactly has lost a third of its value, but Virgin Money Holdings (UK) has seen its share price drop a third since Brexit was announced last Friday.

 

5 Ways to Stop BREXIT in its Tracks – Corpus VEC Institutes | Virtual Ethical Careers Corpus

Can the path toward BREXIT set in motion last Friday be REVERSED?

It is a question that many chagrined Britons and global market participants are pondering intensely some 72 hours after the outcome of an unprecedented referendum threatened to cleave the U.K. from the rest of the European Union after 40 years of membership.

The so-called Brexit, or British exit from the EU, marks uncharted territory for Britain and Europe. No country has left the EU since its inception as MarketWatch’s London bureau chief, Karen Friar explains. Quitting the EU centers on Article 50 of the Lisbon Treaty, which sets forth a murky blueprint for giving up membership in the bloc. “Any member state may decide to withdraw from the union in accordance with its own constitutional requirements,” the provision begins.

But there are a few manoeuvers that could possibly result in Britain remaining a part of the EU, especially since June 23’s referendum isn’t legally binding. That means that the British government isn’t obligated to follow through by ditching its EU membership.

To be sure, U.K. Prime Minister David Cameron on Monday said he planned on honoring the nearly 52% majority for Brexit in the referendum. He also reiterated that he planned on resigning to allow new leadership to take the next steps after his efforts to campaign for a “stay” vote failed.

“The decision must be accepted and the process of implementing the decision in the best way possible must now begin,” Cameron told the House of Commons ahead of ahead of a meeting of EU leaders in Brussels on Tuesday.

But it isn’t a lead-pipe cinch. The march toward Brexit could be reversed or diluted, experts say. Click ahead for five possible scenarios.

 

UK Parliament NOT Activating Article 50

 The U.K. parliament could opt not to activate Article 50. That would mean that the government wouldn’t notify the EU of its intent to withdraw. This is an unlikely scenario:

“Politically speaking, in a referendum where so many people have voted and there is a clear majority, it would be next to unthinkable that the parliament would go against the will of the people,” Nikos Skoutaris, lecturer in European Union law at the University of East Anglia told MarketWatch.

Once Article 50 is put into motion, the U.K. and EU will be on a two-year timetable, unless an extension is approved, for completing the severing of membership. A separate and parallel discussion could take place to renegotiate trade terms between the EU and the U.K., Kenneth Armstrong, professor of law at the University of Cambridge, told MarketWatch. Hammering out fresh trade terms could take several years.

Scottish Veto

This is seen as an even more unlikely outcome. But Scotland First Minister Nicola Sturgeon argues that the Scotland Act 1998 gives the country’s semiautonomous parliament the authority to reject the U.K. vote (Scottish voters solidly favored remaining in the EU). Experts point out that this is an interpretation of the act and that as a sovereign nation, the U.K. should be able to do whatever it wants, including moving forward with Brexit, said Skoutaris.

“The Scottish Parliament can make things difficult, but legally it can’t block Brexit,” said Featherstone.

 

Economic Shock leads to BREXIT Rethink

A complete economic shock that plays into the narrative espoused by the “remain” camp could potentially set in stage a process that would derail the move toward Brexit.

In this case, the vox populi could compel the government to rethink Brexit on the grounds that it could lead to a long-term destabilization of the U.K. economy. Worries about Britain’s economy are certainly in focus. On Monday, ratings firm Standard & Poor’s Global Ratingsstripped the U.K. of its pristine AAA credit rating, citing “less predictable, stable, effective policy framework.” And the British pound  continued to free fall, tumbling to a 31-year low below $1.32 on Monday.

 

Brexit-lite

Partial or associate membership.

The U.K. could strike a fresh deal with the EU that could reframe its relationship with Europe’s trading bloc. Skoutaris says that this could look very similar to the reshaped relationships between the EU and Norway and Iceland. As an article in The Telegraph noted, the so-called Norwegian model “would fulfill many key Leave demands. Britain would be free of Brussels bureaucracy, and free from the stifling effects of the EU’s Common Fisheries and Agricultural Policies. We would remain a participant in the single market, without any of the trappings of political union.” By all practical purposes, this is still a Brexit.

 

A Second Referendum

This is a variation on the previous scenario.

The Financial Times’s Gideon Rachman makes the case that the EU could make concessions to keep the U.K. in the EU warranting a second referendum. He draws parallels to referendums by Denmark, which voted to reject the Maastricht Treaty in the early 1990s and Ireland, which voted to reject the Nice treaty in 2001. Rachman also argues that one of the “leave” camp’s most prominent personalities, Boris Johnson, has been campaigning for an exit as gambit toward grabbing the PM seat and may change his tune once he’s won it.

A petition for a new referendum already has received millions of signatures, but at this point might be futile. That could change if the matter becomes more hotly debated. The U.K. government is in disarray with Cameron’s resignation leaving the Conservative Party rudderless and the Labour Party, led by Jeremy Corbyn facing outright insurrection.

Whatever, the outcome the markets likely are in store for a long and volatile slog. The Dow Jones Industrial Average has dropped nearly 900 points over the past two trading sessions and the S&P 500 index barely closed above 2,000, as the implications of Brexit continued to wreak havoc.

“This is one of the biggest shocks of my life to see that there is a Brexit,” said Skoutaris, who hails from Greece.

Italy eyes €40bn Bank Rescue as first BREXIT Domino falls – Corus VEC Institutes | Virtual Ethical Careers Corpus

Italy is preparing a €40bn rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets.An Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. “Italy will do everything necessary to reassure people,” said premier Matteo Renzi.

“This is the moment of truth we have all been waiting for a long time. We just didn’t know it would be Brexit that set the elephant loose,” said a top Italian banker.

The share price of banks crashed for a second trading day, with Intesa Sanpaolo off 12.5pc, and falls of 12pc for Banka MPS, 10.4pc for Mediobana, and 8pc for Unicredit. These lenders have lost a third of their value since Britain’s referendum.

“When Britain sneezes, Italy catches a cold. It is the weakest link in the European chain,” said Lorenzo Codogno, former director-general of the Italian treasury and now at LC Macro Advisors.

The country is the first serious casualty of Brexit contagion and a reminder that the economic destinies of Britain and the rest of Europe are intimately entwined. Morgan Stanley warned in a new report that eurozone GDP would contract by almost as much as British GDP in a “high stress scenario”.

Italian officials are studying a direct state recapitalisation of the banks, to be funded by a special bond issue. They also want a moratorium of so-called ‘bail-in’ rules and bondholder write-downs, but these steps are impossible under EU laws. Mr Renzi raised the subject urgently at a meeting with German Chancellor Angela Merkel and French president Francois Hollande at a Brexit summit in Berlin on Monday.

“There has to be a suspension of the bail-in rules and state aid rules at the highest political level in the EU, otherwise I don’t see how this can work,” said Mr Codogno.

Unlike the eurozone debt crisis in 2011-2012, there is no serious trouble yet in the sovereign debt markets. The ECB is effectively capping yields under quantitative easing.

The stress gauge in this episode is the health of the private banks. The Euro STOXX index of bank stocks has collapsed by half since last July, and is now probing depths seen in the white heat of the debt crisis. British bank shares have also plummeted since Brexit but this has no systemic implication so far. It chiefly reflects recession fears, and potential loss of access to the EU market for business.

The share price of Italy’s biggest bank Unicredit has collapsed

Italy’s banks are the Achilles Heel of the eurozone financial system. Non-performing loans have ratcheted up to 18pc of total balance sheets as a result the country’s slide into depression after the Lehman crisis.

The new bail-in reform this year has brought matters to a head, catching EU authorities off guard. It was intended to protect taxpayers by ensuring that creditors suffer major losses first if a bank gets into trouble, but was badly designed and has led to a flight from bank shares. The Bank of Italy has called for a complete overhaul of the bail-in rules.

It is now almost impossible for Italian banks to raise capital . They are caught in a pincer as the ECB simultaneously demands compliance with tougher capital adequacy buffers, in some case demanding fresh infusions of capital three or four times.  Mr Codogno said the ECB is unwittingly destabilizing the banks in an overzealous attempt to make Europe’s banks safer.

Italy is now paralyzed under the existing eurozone structure. Analysts say it desperately needs a US-style bank rescue along the lines of the ‘TARP’ in 2008, which used federal funds to mop up bad assets and stabilize the banks. This is forbidden by the eurozone.

The government introduced a €5bn rescue fund called Atlante earlier this year, but this was funded largely by the banks themselves rather than the state and has been overwhelmed by events.

Mr Codogno said Italy is caught in a low-growth trap that is slowly eroding debt dynamics. “I don’t think the Italian system is about to blow up. We could muddle through for years, but we need to get out of this loop,” he said.

Italy’s public debt has jumped despite austerity measures. There is little buffer left against a global downturn

Hedge fund veteran George Soros warned that Italy faces the risk of a “full-blown banking crisis” that could bring the rebel Five Star Movement to power as early as next year.

The banking squeeze has become politically explosive in Italy after thousands of small depositors were wiped out at four regional banks late last year. They were classified as junior bondholders, even though most of them were just ordinary savers who did not realize what was being done with their money.

Mr Renzi may be forced to take matters into his own hands and enact a unilateral sovereign rescue of the Italian banking system in defiance of the EU, unless he wins concessions soon from Brussels. Those who know him say he will not go down in flames for the sake of European ideological purity.

UK Loses Triple-A Credit Rating in Wake of BREXIT Vote – Corpus VEC Institutes | Virtual Ethical Careers Corpus

The UK has been stripped of its last AAA rating as credit agency Standard & Poor’s warned of the economic, fiscal and constitutional risks the country now faces as a result of the EU referendum result.

The two-notch downgrade came with a warning that S&P could slash its rating again. It described the result of the vote as “a seminal event” which would “lead to a less predictable stable and effective policy framework in the UK”. The agency added that the vote to remain in Scotland and Northern Ireland “creates wider constitutional issues for the country as a whole”.

S&P was the last of the big three ratings agencies to have a blue-chip rating on the UK’s credit-worthiness. Moody’s which stripped the UK of its top notch rating amid the austerity cuts of 2013, said last week it might further cut its view of the UK.

Rating agency moves have the potential to make it more expensive for the government to borrow.

George Osborne gave investors some confidence to buy gilts, UK government bonds.The S&P move came after another torrid day on the financial markets. The pound hit fresh 31-year lows and £40bn was wiped off the value of the UK’s biggest companies on Monday despite efforts by George Osborne to quell investors’ concerns about the economic and political ramifications of the BREXIT vote.

After three days of silence in the wake of the referendum the chancellor made a statement yesterday morning in a bid to calm the markets. However, sterling remained under sustained pressure on the foreign exchange markets as economists slashed their forecasts for UK economic growth. Wall Street was also weaker while continental bourses sold off sharply after Friday’s record $2tn of losses on global stock markets.

Expectations are now mounting that the Bank of England will cut interest rates – possibly to zero from their historic low 0.5% – to stimulate the economy, and yields on government bonds fell below 1% for the first time, which could spell cheaper mortgage rates.

In a live broadcast just after 7am, as dealers in London braced for another day of turmoil, Osborne insisted: “our economy is about as strong as it could be to confront the challenge our country now faces”.

But moderate losses on the FTSE 100quickly deepened and at one point sterling was down 3.5% against the dollar, at $1.3122, its lowest level since 1985. Against the euro, the pound was down 2.4% at €1.19.

Speaking at the World Economic Forum in China, Nouriel Roubini, economist at New York University, described Brexit as “a major significant financial shock” which would create “a whole bunch of economic, financial, political and also geopolitical uncertainties”.

By the end of trading, the FTSE 100 index was down 2.6% – or 156.5 points – and below 6,000. The FTSE 250 – the next tier of companies and more closely tied to the UK economy – was down 7%, coming on top of a 7% fall on Friday.

“It’s been another dramatic day of trading on the UK stock market,” said Laith Khalaf, senior analyst at financial firm Hargreaves Lansdown.

Companies likely to be hit by a Brexit-induced recession were hit hard. In two days, some £40bn has been wiped off the value of banking stocks and £8bn off house builders. At one point, shares in the bailed-out Royal Bank of Scotland plunged 25% while housebuilders such as Persimmon and Taylor Wimpey have lost more than 40% in just two trading days.

Michael Hewson, chief market analyst at CMC Markets, said that while Osborne’s statement had been measured his comments “were unable to prevent the feeling that UK politics remains in a state of paralysis, with no clear contingencies in place to deal with the fallout of a leave vote.”

The biggest faller in the FTSE 100 was budget airline Easyjet which plunged by 22% after warning that wary consumers would now rethink their travel plans. Exchange rate movements, the carrier added, would add £25m to costs.

Another profit warning came from London-focused estate agent Foxtons. Its shares dived 25% after the firm said Brexit would hit sales for the rest of the year. Shares in so-called challenger banks such as Virgin Money were also pummelled.

Osborne spoke after it emerged that Bank of England governor Mark Carney had cancelled a trip to Portugal to remain in the UK to oversee any response from Threadneedle Street.

The Bank’s financial policy committee, set up in the wake of the financial crisis to look for threats to financial stability, will meet on Tuesday, when the Bank will again offer emergency loans to the banks as part of its Brexit planning.

The fall-out from the Brexit vote is being felt around the world. Italy’s main index fell 4%, extending Friday’s record losses of 12.5%. In Germany and France there were losses of 3%. At the time of the London close, on Wall Street the main share indices were all down more than 1%.

The Chancellor may have taken some comfort from the fall in yields on ten year government bonds. Yields on these gilts, which move inversely to prices, fell below 1% for the first time. This fall in gilt yields will keep government borrowing costs down and lead to lower mortgage rates. However, they also mean pension companies have started cutting the amount paid to the newly retired.

Osborne refused to repeat his pre-vote warning of a Brexit recession, saying only that the economy would now face “adjustments”. But analysts started to cut their forecasts for UK growth. Goldman Sachs, is now forecasting just 0.2% growth in 2017 – down from 2% predicted previously.

The consultancy Oxford Economics said interest rates could be slashed to 0% within weeks . Morgan Stanley analysts said European and UK stocks would fall up to 10% over the coming months and sterling would fall to between $1.25 and $1.30.

Much of the market’s focus has been on the pound, particularly after the speculator George Soros, who made $1bn when sterling fell out of the exchange rate mechanism in 1992, had warned of a “black Friday” in the event of Brexit. His spokesman stressed that he had not bet against the pound last week.

“George Soros did not speculate against sterling while he was arguing for Britain to remain in the European Union,” the spokesman told Reuters. “However, because of his generally bearish outlook on world markets, Mr Soros did profit from other investments.

Brexit Impact will be Worse than the 2008 Crash – Corpus VEC Institutes | Virtual Ethical Careers Corpus

Britain’s Chancellor George Osborne tried to calm tumultuous seas on Monday morning as markets struggled to understand the implications of the vote for the UK to leave the European Union. It’s unlikely it will be the last time. The truth is that Britain is now in the preamble of a deep recession, and a political “perfect storm” that is driving the economy into a negative spiral that must be stopped. The sooner the better. 

 

Why do we say that? First, all known engines of growth in the British economy – finance, services, construction and manufacturing – have stalled. They are unlikely to reignite even at a lower level of activity until some clarity about the future of Britain’s position in the world is achieved.

Most optimistic scenarios suggest this will take about three years but it is likely to take even longer. Britain is now a far less attractive place for foreign investment. This is reflected in the lower value of the pound, and in the sharp decline in the value of the shares of construction companies. The housing market has also stalled. The prospect of much construction in the next year or two is very low, and that will affect all the sectors that service the industry, from kitchen makers to lawyers to removals firms.

Dying industry? 

No haven

Second, the other major engine of growth, the City of London, is in danger of losing its highly valued passporting arrangement which allows institutions to provide services from one EU state to another. As a result, banks are reportedly preparing to move some of their operations to continental Europe. Thousands of jobs are under threat. Suggestions that the City might thrive as an offshore financial centre are misguided. The tide has turned, and a UK torn from the EU will be in a much weaker position to withstand global pressure against tax havens from the US, OECD, and the IMF among others.

End of the production line? Inside the Nissan factory in Sunderland.

 

Third, some people argue that the lower pound will drive export growth. But large exporters, such as UK-based car makers, are unsure about their core export markets in the EU, and that is true of small exporters too.

In short, Britain is in limbo. It is not a signatory to the World Trade Organisation (WTO) and cannot move ahead with negotiations on that front before a deal with the EU and certainly not before it has a new government. US president Barack Obama has warned that the UK will be at the “back of the queue” in its trade negotiations.

Any investment in export-oriented manufacturing and services right now therefore represents a huge leap of faith on the part of the investor. They will need to convince banks, most of which have lost considerable market capitalisation, to back them. The uncertainty facing investors is amplified by fears the “UK market” may shrink with a possible secession of Scotland.

Spluttering Engines

It is hard to find viable engines of growth. The UK tech scene is highly sensitive to changes in its environment, and particularly to financial services fragility. Another major export sector – the UK education sector – is facing turmoil. The weaker pound and more affordable housing might make our universities cheaper for overseas students, but more worrying is the impact of likely new visa requirements for EU students considering a three-year stay. EU education funding is now also in doubt.

A lone bright spot? Tourism may get a lift. 

The weaker pound may bring more tourists into the UK but the impact is likely to be seasonal, uneven and outweighed by losses in other sectors. The next few months’ data will be crucial for estimating the extent of Britain’s downward spiral. Shrinking economic activity will result in lower tax receipts and higher borrowing at a time when Britain’s sovereign rating is likely to be downgraded.Deficits will grow.

In the financial markets, excessive volatility is the largest near term risk, but it is not the only one. It will take time for the weaker pound and the deteriorating quality of collateral to work their way through the balance sheets. In the process, it will affect not only UK banks and the corporate sector, but also many overseas banks operating in the UK and banks operating in Europe. The balance sheet adjustments will increase margin calls (demands by brokers that an investor puts up further cash to cover possible losses). This will eat into cash reserves and could trigger the collapse of weaker companies.

In the medium term and beyond, pension funds may seek riskier assets in the search for returns which pay for people’s retirement, a move that over time may prove detrimental. And the nuts and bolts of the financial market – the repo market that secures day-to-day funding for banks, and the clearing houses which manage the flow of transactions – will be tested by volatility, by those margin calls, and by the prospect of assets and investment moving elsewhere.

New Problems

This time is different (worse). 

Many have suggested that this is not a Lehman moment. We agree, but only because it may be much worse than Lehman, at least for the UK. Back in 2007-2009, a large public sector and continued investment in the public services sustained the aggregate demand in the economy and softened the recession, as did the eventual decision by the Bank of England to reduce interest rates. It was the young generation, the 16-25 year olds, who bore the brunt of the crisis at that time.

Cash rich emerging market investors helped the corporate sector and banks with their appetite for British assets. Back then, Britain was a global going concern whose power was amplified through its European status. Now, the Bank of England cannot reduce interest rates much further, the effect of tax cuts is marginal in a recession, and the public sector has been weakened by years of austerity – as have people’s savings. With a major element of its competitive advantage – being part of the EU – gone, it is unclear what the UK is as a going concern, a situation which can only be resolved once the political map for post-Brexit future is agreed upon.

That does not appear feasible. The Brexiters never came with any concrete plan for the future. They dismissed the expert opinion in the name of the greatness of the British state and stoicism of its people. The demands of the Brexit vote are so contradictory that no political agenda can possibly fulfil them. The Leave vote contained multitudes: a protest and revenge vote against austerity, against elites, immigrants, markets and globalization. In a dramatic but ironic twist, Brexit has granted more power to right-wing elites that favour free market solutions – forces that never protect those parts of society that are most disadvantaged by market competition, deregulation and freedom of trade.

The solution lies in a critical but honest revisiting of the referendum outcome. Barring a technical solution (a mooted veto by the Scottish parliament), this can take two routes. One (longer) is economic: as negotiations with the EU hit hurdles, the unravelling economy will generate the political need to stop the crisis. Another route is political: the referendum was won on the assumption that the experts had got it wrong and Britain would emerge much stronger as a result. Truly courageous political leadership would now concede that it was never in the British public’s interest to wreck the economy and break the union.

BREXIT Impact – George Osborne warns UK to expect Spending Cuts & Tax Rises after Brexit Vote – Corpus VEC Institutes | Virtual Ethical Careers Corpus

 

The next Conservative government will have to cut spending even further and raise taxes to ensure the country can live within its diminished means post-Brexit, George Osborne has said. 

The Chancellor said it was “very clear” that the country would be poorer following the people’s decision to leave the EU and while ruling out an immediate ‘emergency budget’, said that the next Prime Minister would “absolutely” have to inflict further austerity measures on the population.

Once seen as the frontrunner to succeed David Cameron as Conservative leader, Mr Osborne’s reputation with the party lies in tatters following the Brexit vote, which he vehemently argued against, and he has ruled himself out from running in the imminent Conservative leadership contest.

However, in an interview with BBC Radio 4’s Today programme – his first since Thursday’s vote – the Chancellor hit back at critics who have said the Government was under-prepared for a Leave vote. He said extensive contingency measures had been put in place to stabilise financial markets, but insisted that it was not the responsibility of those who had campaigned to stay in the EU to plan for the longer term future of Britain’s future relationship with Europe outside of the bloc.

“We need a plan as a country to get ourselves out of this, while respecting the decision of the British people,” he said. “We have extensive contingency plans for the financial stability consequences of Brexit…and we spent a long time preparing those plans.

“It was not the responsibility of those who wanted to remain in the EU to explain what plan we would follow if we voted to quit the EU. Those who wanted to quit the EU had a whole range of different visions…There were some who wanted all the benefits of EU membership without any of the costs. I’m not sure that’s very realistic…We as a country and we as the Conservative party have to determine which model we are seeking in terms of our relationship with our nearest friends and allies. That is what the Conservative leadership contest is about.”

Mr Osborne said his staunch support for Remain meant he was not the leader to unify he party.

Asked whether he regretted the fact the referendum had been called in the first place – a decision he is understood to have privately argued against during the Coalition years – Mr Osborne said he regretted the result, but would not dispute the will of the people.

“Did I want Britain to remain in the EU? Yes. Did I fear the consequences if we quit? Yes. Did I argue passionately for that during the referendum? Absolutely I did…I’ve made my argument, the British people have chosen a different course but I love this country. As I say, my country right or wrong, I will do everything I can to make it work for Britain in the difficult months and years ahead.”

Mr Osborne is widely expected to be ousted as Chancellor under the next Conservative Prime Minister, who will be in office by September. He said that his future would be up the next party leader.

Northumbria University, Newcastle, has launched an exciting New Funding Scheme to support Postgraduate Study – Corpus VEC Institutes | Virtual Ethical Careers Corpus

Northumbria University, Newcastle, has launched an exciting new funding scheme to support postgraduate study

Want to master your future? When it comes to postgraduate study, the time is now.

Northumbria University is thrilled to announce its brand new Vice-Chancellor’s Masters Scholarship Scheme. Northumbria is offering one hundred scholarships worth £2750* off selected full-time on campus postgraduate courses starting in September 2016. Students will also be eligible to apply for the government loan of up to £10,000 to support postgraduate study – meaning there has never been a better time to continue your education.

Postgraduate education will take you and your skills to the next level. Whether you want to get the real world experience you need to progress in your career, the research skills to excel in your discipline, or simply want to build your confidence and pursue your passion, a Masters qualification will take you there. Northumbria’s Masters courses are co-created with students and employers to ensure you graduate with the skills and attributes needed to succeed. With 96% of Northumbria’s Masters students going on to work or further study within six months of graduation, you can look forward to a bright and exciting future.

Northumbria’s Masters courses are taught by world-leading experts and leaders in their respective fields. In the Research Excellence Framework (REF) 2014, the national assessment of research quality, Northumbria was rated Top 50 in the UK for research power. The University showed that it had made a major step forward, reporting the largest rise in research rated as world-leading and internationally excellent by the REF. Northumbria nearly tripled its share of research rated in these categories, clearly demonstrating the world-class academic staff it has working across multidisciplinary research themes.

Whether you want to make the next research breakthrough, further enhance your career prospects, or simply continue to study the subject you love, Northumbria offers a range of exciting postgraduate courses.

MBA graduate Yvonne Gale was already a chartered accountant when she came to Northumbria to further her career through postgraduate study. She is now CEO of NEL Fund Managers Limited and a non-executive director of a number of the boards of our funds and our investee businesses.

She said: “I was drawn to the structured approach within the MBA. As a part-time student with a demanding career, I felt the structure was needed to ensure I succeeded.

Postgraduate study was an incredibly worthwhile investment – 100%

Jonathan Otter

“The academic staff put significant effort into making the study material relevant to the students using practical examples. Years later, I’m still greeted with enthusiasm by staff who remember my studies. I loved the library too – the knowledge available was phenomenal.”

MSc Multidisciplinary Innovation graduate Jonathan Otter meanwhile chose postgraduate study at Northumbria to help launch his career.

He said: “It fitted exactly what I was after and after speaking to previous students and members of staff I knew it would be the best opportunity to expand my industry learning. The academic staff are incredibly approachable and helpful.”

Jonathan added: “Postgraduate study was an incredibly worthwhile investment – 100%! I raised and sacrificed everything to come here and it has paid off tenfold. Being on a Masters of this calibre allows an interaction and volume of learning that is what you make of it. Get out of it what you put in – the rewards are epic.”

Northumbria’s Vice-Chancellor Scholarship scheme has been created to help more students move to the next level. To apply please visit: www.northumbria.ac.uk/vc-scholarships.

The scheme closes on 1 August 2016.

Argos to refund card customers £30 million for overcharging – Corpus VEC Institutes Chambers | Virtual Ethical Careers Corpus

 

Sainsbury’s will trial Argos concessions in its stores. Argos customers who signed up for store cards could receive a refund of up to £100 each after the company revealed it had wrongly charged many for late fees.

The store card allows customers to “buy now, pay later on everything”, but those who failed to pay on time have been charged by what the retailer now describes as “excess fees”.

Home Retail Group, the company behind Argos, said it is has put aside up to £30 million to correct the mistake. Affected customers will receive a letter from the retailer in the next few weeks.

Shoppers who have been charged more than £12 for making a late payment on their Argos card are among those affected, according to the website MoneySavingExpert.com.

John Walden, the chief executive of Home Retail, said up to 10 per cent of Argos card customers could have been overcharged.

More than one million people have Argos store cards, according to the Argos website. This means that as many 150,000 could be due a refund.

Home Retail Group has not yet given any details on how customers can claim cash back.

Argos comment:

“In the ordinary course of us checking our procedures we discovered that there was a calculation error in the penalty charges for customers who were making late payments, so we were slightly overcharging,“ Walden said.

“We’re going to correct that for those customers that were affected,” he added.

The news came in a first quarter trading statement showing that Home Retail Group, which is in the process of being taken over by Sainsbury’s, delivered its strongest sales growth in eight quarters.

Total sales were up 2.6 per cent to £868 million in the 13 weeks to May 28 boosted by store openings.

Sir Philip Green takes delivery of £46m private jet, says media report – Corpus VEC Institutes | Virtual Ethical Careers Corpus

Sir Philip Green is understood to have taken delivery of a new private jet, adding a £46m Gulfstream G650ER to a transport collection that includes a speedboat, a helicopter and three yachts.

 

The billionaire businessman – who last week appeared before MPs to be questioned on his role in the demise of BHS, which has put 11,000 jobs at risk – is apparently now the owner of an upgraded jet the manufacturer’s website says comes with handcrafted seats and divans, widescreen TVs and porcelain dinnerware as standard.

Photographs and reports shared online by aeroplane enthusiasts suggest the jet was delivered to the UK in early April, and that it has already been used for flights between London and Monaco, where Green’s family is based. On Sunday if flew from Luton to Nice.

Described as Gulfstream’s “holy grail of private jets” the original G650 was the largest and fastest of the firm’s business jets. The ER is the updated version, and has list price of $66.5m (£46m).

Related: This incredible £180m private jet is like a palace in the sky

The new jet, which can fly non-stop from Hong Kong to New York, was delivered just weeks ahead of the Green family’s new superyacht – a four-storey 90-metre vessel built in Italy that is understood to have cost the billionaire £100m.

They have arrived at a time when Green is facing questions about a £571m hole in the BHS pension fund following the sale of department store business to Dominic Chappell for £1 in March 2015. Green’s family received hundreds of millions from BHS in dividends and rent. The department store collapsed into administration just 13 months later, and the staff now face losing their jobs and pension cuts.

Green’s jet purchase was reported in the Sun on Sunday, which quoted a source who said: “It’s the most luxurious private jet on the planet, the fastest of its kind. Most employees at BHS will struggle to even pay for a budget flight to Spain this summer.

“So the idea he’s splashing out on this will be hard to stomach.”

Green told the Guardian he was not talking to the media about the report.

The Sun reported that Green’s wife, Lady Tina, was spending £300,000 on the interior.

The pensions regulator is investigating whether Green, who is still chairman of Topshop’s owner, Arcadia Group, should be forced to make contributions to the scheme. The subject was on the agenda when he appeared at the select committee hearing for six hours on Wednesday, when he told MPs he was working on a solution that would involve BHS workers getting a better deal than in the pension protection fund, under which they would suffer a 10% cut to their benefits.