Following the referendum in the United Kingdom (UK) to exit the European Union on June 24, 2016, with turmoil in financial markets across the world turmoil, there are signs of recovery. The intervention by the Bank of England, which has injected stimulus into the market, the UK financial market seem to be recovering after experiencing the greatest blow following the Brexit vote in which Britain voted to leave the European Union (EU) by 52% to 48%. Signs of recovery have also been observed in other financial markets as shares continue to rise in the United States and Asia.
In the wake of Mark Carney (the governor of the Bank of England) speech on June 30, 2016, the FTSE100 share indexes has risen by 6.34% since the Brexit vote and is on course for the biggest weekly rise since 2011.
The FTSE250, on the other hand, slipped by 1% due to concern about UK financial future. Following the 31 year low of $1.31 on Monday, June 27, 2016, and a steady rise since the post-Brexit, the Pounds fell by 0.47% to $1.3206 this morning (July 1, 2016) following Mark Carney announcement on interest rate cut. The current exchange rate is about 11% lower than the pre-Brexit rate of about $1.49 to a British Pound.
In another development, the chief executive of Barclays Bank, Jes Staley has said that the bank has no plans to cut down jobs in Great Britain. According to him, they might have to take on new employees in Europe if need be, but not at the expense of decreasing their presence in UK.
HSBC’s chairman has reassured his workforce that the global headquarters will remain in the UK, which is a shift from his earlier stance in February 2016 that jobs could move to France in the event of Brexit. He, however, said that in an event of extreme Brexit negotiation, 1000 jobs might be moved to Paris.
The future of UK Financial market remains uncertain as investors remain sceptical and worried as the EU will not allow UK access the single market in the event of a closed border.
- Olalekan Olonilua for encomium.ng