Bank Statement

 

If I am ever uncertain by the direction of travel of our economy at any given moment, I always look to the Banking Sector for an indication. Given the lack of clues coming from Theresa Mary May on the UK leaving the EU or anything remotely resembling an economic policy coming from the Chancellor of the Exchequer (who is Philip Hammond in case you (forgivably) missed it) currently, I am left with no choice but to seek a guiding light from ‘them lot’ (also known as the Banking Sector).

 

My rationale for using ‘them lot’ as a guide is simply due to the vast importance that the Banking Sector has for the UK economy (it accounts for 10% of UK GDP) and how the Government typically does all it can to protect it……and dare I suggest romance it.

 

Which leads us nicely (and very intriguingly) on to an issue that will confront UK banks post Brexit……

 

In short, UK based banks would lose the automatic right to trade in EU states if the UK left the single market and would strip banks of valuable ‘passporting rights’ that give unfettered access to the EU bloc.

 

Passporting rights are considered by some to be vital to London's position as a financial hub as it allows banks to serve clients across Europe without the need for licences in individual countries. However, if the UK were to leave the EU we are simply encouraging UK based banks to up sticks and move……with the hard cash ‘them lot’ make for the UK going with it.  

 

In the EU corner, Jens Weidmann (head of Germany's central bank) has said that “passporting rights were tied to the single market and would automatically cease to apply if Great Britain is no longer part of the European Economic Area.”

 

In the UK corner (presumably dressed as a clown) Foreign Secretary Boris Johnson has said that “such passporting rights would be preserved even if Britain left the single market after Brexit”.

 

Boris has never been short of words but has lacked conviction with his actions in the past. Let’s hope he’s right on this one or it will hurt ‘them lot’ and the UK economy as a whole.

 

We shall see.