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Bitesized Blighty: March 29, 2019

Toyosi Adebayo

  • On Wednesday, Theresa May promised Conservative MPs she will quit if they back her Brexit deal, saying "I am prepared to leave this job earlier than I intended in order to do what is right for our country and our party". However, as of Friday afternoon, MPs rejected the Prime Minister's EU withdrawal agreement, with the 344 to 286 vote - by a margin of 58. This means the UK has officially missed an EU deadline to delay Brexit to 22 May and leave with a deal. The prime minister said the UK would have to find "an alternative way forward", and it almost certainly looks like the country will be playing a role in the European elections. What next? On April 1, MPs will hold another set of votes on various Brexit options to see if they can agree on a way forward. This will be potentially be followed by another round of so-called "indicative votes" on April 3, then an expected Emergency summit of EU leaders on 10th April, just in time for the Brexit day on April 12, if UK does not seek further delays.
  • Sentiment and business volumes in UK financial services deteriorated sharply at the start of 2019 owing to Brexit uncertainty. This has raised fresh concerns over the crucial but underperforming sector as uncertainty about the outcome of Brexit negotiations have weighed on financial services as 44 per cent of the sector’s exports go to the EU. Underperformance remains concerning as the financial sector accounted for about 7% of total output in the UK — half of it generated in London. A survey conducted by the PwC and the Confederation of British Industry (CBI), a UK business organisation, which speaks for businesses, reports that more than half the financial services businesses they surveyed between February and March were less optimistic about their overall business situation. The survey of 84 businesses, also revealed a fall in employment at the quickest pace for four years, driven by a decline in the banking sector. Separate ONS data showed that while UK overall employment has been rising to record highs, the number working in finance and insurance is now lower than at the time of the referendum.
  • The Financial Conduct Authority (FCA) has published its rules for a no-deal Brexit, including an extension to the notification window for companies who wish to join the regulator's post-Brexit regime. The new documents, an amendment from a previous document published in February, contains the majority of the final instruments and guidance which now commence on ‘exit day’, rather than 11pm on 29 March. Additionally, it has identified three areas where changes apply, these relate to UK managers of EEA UCITS funds, the application of the Client Assets sourcebook (CASS) to activities carried on from an EEA branch, and the distance marketing provisions. Firms now have an extention until the end of 11 April 2019 if they wish to enter the temporary permissions regime (TPR). Full details on how firms could be affected by Brexit can be found on FCA website, including information specific to the banking sector, UK‑based pensions and retirement income firms, general insurance firms, retail firms, wholesale banks, markets and asset managers operating in the UK. 

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