Sterling at risk of losing reserve currency status

Post-Brexit shocks to sterling have rocked the currency’s reserve currency statusPost-Brexit shocks to sterling have rocked the currency’s reserve currency status

After Britons voted narrowly to exit the European Union earlier this year, they may not have anticipated the effect on the country’s currency and financial reputation. But with sterling reaching its lowest value in 40 years and the country stripped of its Triple-A credit rating, there are also fears that its prized reserve currency status could be under threat, should it fail to secure continued access to the European single market, according to US ratings agency Standard & Poor. Read more…

Post Title: US growth picks up in Q3

Figures show better-than-expected growth figures during Q3 of 2016Figures show better-than-expected growth figures during Q3 of 2016

Recent figures from the Commerce Department show that the pace of US growth up-ticked in the third quarter, reaching its highest rate in two years and offering support to forecasts of greater economic stability. The economy grew at a 2.9 percent annualised rate in the third quarter, topping predictions of just 2.6 percent and reflected a spike in exports as well as an increase in federal spending. However, consumption growth dropped back over the same period to half the rate of the previous quarter. Read more…

Hard Brexit could result in British banking crisis

Head of Germany’s central bank warns that UK could lose its status as the financial centre of EuropeUK could lose its status as the financial centre of Europe

Since the UK’s vote to leave the European Union, there’s been no clear indication of how the British government intends to carry out the political and economic split. Article 50 of the Lisbon Treaty must be invoked before Brexit can begin but with the clock ticking on a two-year negotiation timetable as soon as the process is triggered, the prime minister seems reluctant to push the button too soon. Britain sells almost half of its exports via the single market. A ‘soft’ Brexit would minimise the economic impact on the UK but is unlikely to assuage the concerns of those who voted to reduce immigration. Read more…

Apple hit with tax penalty after EU ruling

Tech giant Apple to pay billions of euro in back taxes after EU rulingTech giant Apple to pay billions of euro in back taxes after EU ruling

Tech leviathan Apple is on the receiving end of Europe’s biggest-ever tax penalty after Brussels handed down a ruling that the company had benefited from what amounted to illegal state aid from Ireland. The judgement follows a lengthy investigation into claims that Dublin gave Apple an uncompetitive advantage in violation of EU law. Apple will be asked to pay billions of euro in back taxes as part of the European Commission’s initiative to combat multinationals’ aggressive tax avoidance strategies. Read more…

IMF encourages global response to stimulate economic growth

The World Economic Outlook study by the IMF spotlights weaknesses in the global economyStudy by IMF spotlights weaknesses in global economy

The International Monetary Fund (IMF) has warned that free trade is being increasingly seen as something that benefits the wealthy and warn that help is needed for people whose job prospects have been damaged by globalisation. In a statement from the organisation’s half-yearly World Economic Outlook study, it spotlights weaknesses in the global economy as being largely responsible for the stalling of trade growth over the past few years. It also acknowledged that anti-trade feelings could harden further, given the current climate. Read more…

US economy feeling the pinch as lines of credit are squeezed

Businesses treading water as banks tighten standards relating to applications for creditBusinesses treading water as banks tighten standards over applications for credit

A survey recently conducted by the Federal Reserve reveals indications that lines of credit are harder to come by, with loans to businesses on commercial and industrial (C&I) and commercial real estate (CRE) facing tougher criteria over the second quarter of 2016 than in the past three quarters. Companies in search of C&I loans for new inventory or relocation are facing tougher credit standards as banks continue to tighten lending, particularly in the case of medium- and large-sized companies. Read more…

Federal Open Market Committee holds interest rates steady

US interest rates remain on hold as the Fed looks for more certainty before signalling a hikeUS interest rates on hold as the Fed looks for certainty

The Federal Open Market Committee (FOMC) made the decision to hold US interest rates steady in July. Market analysts had predicted the hold as the continued threat of economic uncertainty coupled with the upcoming presidential election prevented the Federal Reserve from the announcing a rate hike in the short term. It’s the fifth time the Fed has stuck to its guns since nudging the rate up last December for the first time in nearly a decade. Many believe that it could be the end of the year before a further change is contemplated. Read more…

What kind of post-Brexit deal can the UK negotiate with the EU?

The Brits may have voted for Brexit but how will it continue to trade with the EU?Where do we go from here?

With the UK now steering a course to leave the European Union, following a public referendum in June, the focus has shifted to Brexit specifics and speculation is rife over how the British government will reframe its relationship with the country’s biggest trading partner from hereon in. Negotiations based on an existing model, such as that operated by Norway or Switzerland seem the most likely route but with Leave campaigners favouring a ‘hard’ Brexit, could the UK be left out in the cold? Read more…

IMF have issued a warning over Eurozone growth following Brexit referendum

IMF signals economic slowdon in eurozone

IMF expresses fears over Eurozone growth

The result of the UK’s Brexit vote is damaging economic stability across the European Union. The International Monetary Fund (IMF) has downgraded growth outlook for the Eurozone and its managing director, Christine Lagarde, is warning of an economic slowdown as confidence dips and markets suffer increased volatility. GDP across the single currency bloc is only expected to grow by 1.6% this year, with a further drop to 1.4% in 2017. The IMF has put this down to the negative impact of the UK referendum and fears that the slowdown will have a knock-on effect in other economies, especially emerging markets. Read more…

After Brexit, will other EU countries follow suit?

After Britons voted to leave the EU, will other countries follow their lead?After Britons voted to leave the EU, will other countries follow their lead?

Europe is in turmoil after the shock outcome of Britain’s referendum which saw a slim majority of is citizens vote in favour of Brexit. The imminent separation of the UK from the European Union has given voice to political parties in other countries, which are calling for people to be given a voice on their membership of the bloc. But, after the global reaction to the UK’s momentous decision, how likely are other members to push for referendum? Read more…