BoE’s Carney warns of Brexit-induced financial crisis
|FTSE opens higher
The FTSE stared the day strongly, up over 0.50%, pulled higher by a stronger close in the US market and positive company news including Investec’s spin off plans.
Investec on the rise on spinoff plans
Investec PLC shares powered 10% higher after the banking group announced it would spin off and separately list its asset management business in the next 12 months. The move is part of the restructuring process triggered by the departure of current chief executive Stephen Koseff. The new company will be listed in both London and Johannesburg and will keep at its helm the current chief executive of the asset management business Hendrik du Toit. Du Toit will also briefly become the joint chief executive of the whole group in October when Koseff steps down. Investec’s asset management unit has 109 billion pounds in clients’ assets under management.
BoE’s Carney warns of Brexit-induced financial crisis
Sterling is holding steady against the dollar this morning, trading up 0.16%, but is nudging down against the euro 0.05% following a stark warning from the Bank of England’s Mark Carney. In a special meeting with the cabinet Carney said that a chaotic no-deal Brexit could create a financial crisis on the scale of 2008, trigger a decline in house prices of between 25% and 35% and see the pound weaken further. It remains to be seen if the warning provokes any reactions within the top echelons of UK politics who seem to be more embroiled in a political power struggle than finding ways of leaving the EU in an orderly fashion.
JD Weatherspoon
The hot British summer helped pub owner JD Weatherspoon grow its pre-tax profit year on year by 4.3%. The group had a reasonable revenue increase in September but expects that higher wages, taxes and interest costs will make a dent in its profits. To maintain its current profit levels the group will have to grow sales in the coming financial year by 4% and in September those sales grew by 5.5%. Like other UK retailers, pub owners and restaurants Weatherspoon will have to face the fallout from Brexit and potentially higher interest rates later this year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.