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Theresa May calls for a snap election
Theresa May has announced plans for a general election on June 8, providing the proposal receives a two thirds majority vote today in the House of Commons. The announcement was met with optimism by the business community who see the election as an opportunity to ensure certainty during Brexit talks and consequently, a smoother exit (Telegraph, B1). The announcement also caused sterling to rise to its highest level in six months (i, p38).
Financial services firms are discussing a ‘metered, pay as you go approach’ to research analyst charges in compliance with MiFID regulation. Although estimated to save European and U.S asset managers more than $300 million (Bloomberg, online), there are concerns that this regulation will mean smaller firms struggle to cope with research costs (Financial Times, £, online).
IMF forecasts UK growth
The International Monetary Fund (IMF) has recognised UK growth performance as ‘stronger than expected’ and increased its growth forecast to 2% from 1.5% in January 2017. The UK is now the second fastest growing G7 economy, with the US taking first place (The Times, £, p39). Theresa May said this increase proved the ‘economic resilience’ of the UK, and ‘gave her the confidence’ to pursue a snap election (The Telegraph, B1).
Latest from the BBA
Matthew Herbert, BBA Director of Strategy and Digital, blogs on what makes good Fintech, and how industry and regulators can measure it.
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Simon Hills, BBA Executive Director, Prudential Regulation and Risk, blogs on the PRA’s proposal to allow banks to use external data to model loss given default.
Wednesday 26th April – Webinar: Customers in Vulnerable situations
In this webinar the BBA and The Money Advice Trust draw on new evidence and practical guidance to help regulated firms tackle the most difficult issues staff are encountering on vulnerability, and review how firms are meeting their regulatory and legal requirements on vulnerability. To register click here.
Thursday 27th April – Webinar: The Fourth Money Laundering Directive: Are you ready?
AML systems and controls remain high on the FCA’s agenda, with three months to go until the implementation of 4MLD. In this webinar, BBA associate members Kompli-Global will highlight key changes and how Regtech can help banks meet their obligations. To register click here.
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Stat of the day
49%: the percentage global fintech patents have grown by in the last five years, according to the World Intellectual Property Organisation (City AM, p11).
News in brief
A study by the FCA has revealed 16 million working Britons have less than £100 in their savings account, raising concerns about the sustainability of the UK’s credit demand (Daily Mail, p20).
42% of large businesses experienced monetary loss and business disruption following a cyber-attack in the last twelve months, according to a survey by the British Chambers of Commerce (Sky News, online).
City AM reports that the proportion of financial services workers inside the Square Mile has fallen to 31%, with non-financial and emerging sectors rising to 38%.
The German government has suggested that a tighter monetary policy by the ECB would raise interest rates, strengthen the euro and minimise the German export surplus (Reuters, online).
The FCA has announced plans to investigate retail banks’ business models, especially free current accounts, and their impact on different consumer groups (Financial Times, £, p22).
Professor Russel Griggs plans to review the Bank referral scheme on behalf of HM Treasury, with the aim of ensuring small business lending activity continues (The Times, £, p39).
House of Commons votes on Theresa May’s plan to hold a general election on 8 June 2017.
Bretton Woods Committee Annual Meeting.
What the commentators say
Nils Pratley urges investors not to get carried away by the announcement of a snap general election, despite the reasoning that a likely increased Conservative majority would give the Prime Minister a stronger hand against her own eurosceptic MPs in seeking a “softer” Brexit. He argues that a “messy” result, or a barely increased Conservative majority, would do little to reduce the likelihood of a cliffedge departure from the EU (The Guardian, p24).
Writing in the Daily Mail (p16), Alex Brummer remarks that the timing of the snap general election is ideal for the Prime Minister from an economic standpoint. He points to record employment figures and the International Monetary Fund revising its 2017 growth forecast for the UK to 2% (up from 1.1% in October of last year) as positive economic news for May to present to the electorate. It also comes in time to avoid the worst of an expected squeeze to purchasing power from the higher price inflation outlook.