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New reality for banks, and the pound crashes again
[LONDON] Bankers awaken this morning to a new reality - news that Theresa May is not prepared to do their bidding during Brexit.
Bloomberg's Tim Ross reports exclusively that the UK's financial industry will get none of the special favors it's seeking from the prime minister in negotiations, which are now on track to start before April.
The news contributed to another drop in the pound, which sank to its lowest level since 1985.
Mrs May is set on changing the relationship between the government and the City of London, according to three senior figures in Mrs May's government.
That means no prioritising of the sector in talks with the European Union and no to the interim deal banks have sought to ease the transition.
Officials say the City risks damaging relations even further by repeatedly threatening to move jobs abroad, as the likes of JPMorgan and UBS have done.
Mrs May's approach is despite the fact that financial services contribute almost 12 per cent of economic output, 1.1 million jobs and £65 billion (S$113.21 billion) a year in tax revenues.
The insight into her thinking comes just as the industry prepares to release another report outlining the downsides to the UK from a shrunken financial sector.
But officials believe the ultimate impact of Brexit on the City will simply be smaller bankers' bonuses, with just a few hundred jobs moving elsewhere in Europe.
And they argue voters will welcome the new attitude after the financial crisis.
In the words of Steve Baker, a member of Mrs May's Conservative Party who serves on Parliament's Treasury Committee: "Given the obvious steel in our new prime minister, the City would be ill-advised if they did not accept the new political reality".
Mrs May's tough attitude towards the City risks adding to investor concerns about a so-called "hard Brexit."
While British stocks have risen to their highest level in more than 16 months on the back of a weak currency, that's little joy for foreign investors, who own more than half the UK's equities.
As Bloomberg's Aleksandra Gjorgievska reports, while the FTSE 100 Index has surged 12 per cent this year in local currency, it has declined 2.3 per cent in dollar terms, the biggest underperformance since the global financial crisis.
It's not just banks that are concerned. British business is on the attack as Mrs May continues to keep her negotiating strategy close to her chest.
In an interview with Bloomberg TV, Carolyn Fairbairn, director-general of the Confederation of British Industry, demanded a clearer roadmap for Brexit.
"There do need to be some answers and pretty quickly," she said.
"We are being consulted, but it's piecemeal and it's not transparent."
Brexit is not an excuse for Scotland to seek independence, said the British government minister responsible for Scotland.
David Mundell used an interview with Bloomberg Television to accuse Scottish First Minister Nicola Sturgeon of "spoiling for a fight".
"What we're not going to accept is that Brexit is somehow a pretext for reopening the independence referendum," Mr Mundell said.
"There was no suggestion that somehow there was a caveat in the EU referendum, which was about the UK remaining in the EU, that somehow if Scotland didn't get what it wanted, Scotland would leave the UK."
Ms Sturgeon has said that the June 23 vote for Brexit means a new independence remains an option.
"PM going out of her way to say Scotland's voice and interests don't matter," yesterday on Twitter.
"Strange approach from someone who wants to keep UK together."
Brexit is among the hot topics likely to dominate this week's meeting of the International Monetary Fund in Washington.
As Rich Miller, Saleha Mohsin and Malcolm Scott report, policy-making elites will converge on Washington at a time when their faith in globalisation is increasingly at odds with the growing backlash against the inequities it creates.
Fed by stagnant wages and diminishing job security, the populist uprising epitomized by Brexit threatens to depress a world economy that IMF Managing Director Christine Lagarde says is already "weak and fragile."
For the second time in a few months, referendum results have made a mockery of conventional wisdom shaped by opinion polls, and the investors who believed them.
Colombian stocks, bonds and the peso fell on Monday, a day after voters rejected a peace deal with rebels. At least three surveys published last week had predicted the government-backed accord would pass with 60 per cent support or more.
Each case has its own backstory. But professionals tell Bloomberg's Nafeesa Syeed that there are lessons that apply across the board-including for upcoming contests such as the US presidential election, where most surveys show Donald Trump trailing Hillary Clinton.
Cliff Young, president of US public affairs at UK research firm Ipsos, says that "disruptive" votes are becoming more frequent.