Articles on the website of Gerle Financial Communications about the Brexit referendum in June 2016, the transition period until end of 2020, the deal between the EU and the UK and the consequences, especially for the international funds markets.

Brexit update: What does Liz Truss’ nomination mean for the British financial industry?

Liz Truss’ victory celebration as the new Tory party leader and thus new Prime Minister of the United Kingdom will be short. The UK is facing major problems in the coming weeks – the consequences of Brexit and the controversial Northern Ireland Protocol are just one of them. And what can the financial sector on the island expect from the former foreign minister post-Brexit?

His – then somehow surprising, if self-inflicted and laughable (Hasta la vista, baby!) – exit after two years and 348 days in office make Boris Johnson one of the shortest serving prime ministers in Britain’s recent history. Liz Truss, his successor as leader of the ruling Conservative Party and new head of government in the United Kingdom, could face an even shorter term. The next general election in the UK must take place in January 2025 at the latest. So Truss does not have much time to turn the tide for her party and the, more than any other G7 nation, crisis-ridden United Kingdom.

Truss cannot hope for a grace period in her new office: Already in October, energy bills for private households will rise by 80 per cent and for some companies by up to 600 per cent. Inflation is expected to exceed 13 per cent and possibly even 22 per cent early next year. Government debt has reached almost 96 per cent of GDP has already reached a level that makes all election campaign promises (tax cuts) rather unlikely.

Both Truss and her last rival for the post of party leader, ex-Chancellor Rishi Sunak, are supporters of Brexit. In the internal contest for the post at No. 10 Downing Street, which Truss won with 57.4 per cent of the votes cast, Britain’s exit from the EU hardly played a role. But that can change quickly in view of the ongoing problems around the Northern Ireland Protocol. And what does Truss’s victory mean for the British financial industry, which has been waiting for an Equivalence Agreement with the European Union waiting?


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British financial sector post Brexit: hoping for equivalence – or move to the EU straight away?

The United Kingdom and the European Union want to sign a “Memorandum of Understanding” by the end of March, which should determine how the financial services industry will proceed after Brexit. While the UK hopes that its regulations will also be recognised as equivalent on the continent, a level playing field seems to be more important for the EU. Every day without an agreement drives more business, firms, and staff to Europe – and unsettles British investment managers increasingly.

Things are not looking good for the UK as an international financial hub. While the Brexit deal may have been an unexpected Christmas present for some Brits, for many it is turning into a national tragedy. Enervated hauliers, angry fishermen and ripped-off online shoppers from the United Kingdom (UK) may soon be joined by relocating employees in financial services firms. The sales manager of a London investment boutique put it succinctly in a phone call with me the other day: “Down the line, if you want to work in the EU, you need the local licence.” Ergo, his employer is intensively looking for a location on the European mainland.

Considerations, like those of this asset manager with its tens of billions in assets under management, are being made by more and more investment houses on the Thames that do not (yet) have a branch in the European Union (EU). The post-Brexit period is a grey area for many of them as long as there is no separate agreement between the UK and the EU. But that may be a long time coming. (more…)

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The fish, the finances and the last act in the Brexit drama

The (for the time being) final curtain in the Brexit drama is rising these days, but it does not look like a good ending for the British financial and fund industry. Until recently, the biggest opportunity seemed to be “Fish for Finance“. But that is unlikely to happen. British financial firms are sitting on dry land if they do not have their own branch in the European Union by now (read the whole article as a PDF). Until the cancellation of British Prime Minister Boris Johnson last Friday, “Fish for Finance” – a possible trade between fishing rights for EU fishing boats in British waters on one hand and access for British financial products to the European Union on the other – looked quite promising. Haddock for funds or cod for derivatives, so to speak. (more…)

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The quiet before the Brexit storm (infographic)

Unease within the British investment industry is increasing: Facing the threat of a „No Deal“-scenario there are continuous speculations about the extent of (anticipated) asset outflows due to Brexit, which companies are going to leave and how many employees they will take with them. Since the referendum the media, investment managers and national trade associations have their finger on the industry’s pulse. They predict: Small investment boutiques without any European representation will be hit particularly hard (article as PDF file) (more…)

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Read more about the article Big Brexit and small businesses: How to prepare for the unpredictable?
Monkey sitting on a wooden sign with a warning that it is dangerous to feed animals

Big Brexit and small businesses: How to prepare for the unpredictable?

A couple of days ago I had an argument with my wife in the kitchen. It was, once again, about Brexit. The day before, Theresa May had received a serious slapping by the joint heads of the EU in Salzburg. I had been agonising for some time about what Brexit would possibly mean for us personally, but also for our business as a specialised PR consultancy (of course, I had written an outline of a few pages about it). When I asked my wife to read the outline, she said, while spooning sugar in her tea, “Well, we’ve really got no idea at all what’s going to happen”.

“This is exactly why we have to think about possible scenarios”, I responded.

“But that’s changing every day now! You’re just wasting your time and energy!”

“And that’s exactly why!”

“But what on earth are you going to prepare for!?”

And so it went on …  thank goodness, the steak knives were already in the dishwasher.

At some point we both agreed that we didn’t know any more than all the other owners of small (and big) businesses who don’t sit at the negotiation table in Salzburg, Brussels or London. Also, that it is extremely difficult to plan for a ‘no deal’ exit from the EU in the face of all these, quite frightening scenarios and questions: (How) Will future services for clients in the EU be taxed? Will it be necessary to provide additional qualifications or licences to do business with clients in the EU? What will be the legal status of EU foreigners in the United Kingdom with a company which is registered in England and Wales? (more…)

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