- Posted by currencies in Rate Alerts
- February 11, 2020
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Britain’s economy flatlined in the last three months of 2019 with the country in deadlock over Brexit.
Official figures showed zero growth in the fourth quarter compared with the July-September period.
In annual terms, growth was 1.1%, a level last seen at the start of 2018. The last time growth was weaker for a calendar quarter was in mid-2012.
The data also showed growth in household spending – which has helped drive Britain’s economy for most of the period since the 2016 Brexit referendum – was the weakest in four years.
The British government is demanding the EU sign up to a permanent equivalence agreement for financial services to ensure the City of London can maintain access to the European market after Brexit
The equivalence agreement has stemmed from a long lens camera taking a photo of unreleased briefing papers being carried to downing street yesterday. The document said Sajid Javid is looking for a chapter in the any given free trade agreements in financial services and must have ‘comprehensive, permanent equivalence decisions’
This is in response for UK financial services executives fearful that the EU could easily revoke equivalence agreements put forward from the UK after Brexit which would make it hard for them to service European client as there will be new restrictions.
The EU can currently revoke equivalence agreements on very short notice sometimes as little as 30 days. Not agreeing equivalence agreements allows the EU to put more pressure on its trading partners. If revoked, this could mean that London could potentially loose its ‘financial hub’ status. Hence why the executives are scared about the outcome.
This morning Ursula von der Leyen the president of the European Commission has stated that the task force is ready to start all trade deal models and start negotiations with the UK. She also mentioned that she is surprised to hear Johnson talk about the Australian deal as the EU currently don’t have any trade agreement with Australia. So, if Johnson would like the same deal the EU would be fine with that.
GBP/EUR 1.1819 GBP/USD 1.2905 GBP/AED 4.7369
GBP/AUD 1.9264 GBP/CHF 1.2621 GBP/CAD 1.7178
GBP/NZD 2.0186 EUR/USD 1.0905 GBP/ZAR 19.153