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It has been argued that the separation of the UK from the European Union, when Government triggers Article 50, could jeopardise London’s position as the financial centre of Europe. But how likely is it that other European cities could take on its mantle?

Uncertainty about the future of the country’s access to the EU market and its workers as well as questions about regulatory changes have already rocked London, with several major banks cautioning that they could move staff members out of the UK.
However, John McFarlane, the chairman of Barclays and of business group TheCityUK, has attempted to quell unease by reinforcing the idea that London is “a highly desirable place to do business” globally.

“Europe’s capital markets are not in Paris, Frankfurt or Dublin – they are in London. This is a genuine competitive advantage that has been built over centuries and is incredibly difficult to replicate or displace,” Mr McFarlane said recently.
Nevertheless, a note from UBS on the European real estate market has pointed to the inevitability of a shift in the framework of the financial services sector following the vote for Leave.

“The assumption that London’s financial and business service sector will be able to keep its access to the EU market for services and capital while restricting free movement of people is quite optimistic in our view,” said Gunnar Herm, head of real estate research and strategy across Europe for UBS.

“In summary, Brexit is a threat for London. Financial services companies may not rush through the door to relocate; however, should uncertainties with the UK’s future relationships with the EU continue for too long, companies may re-assess their options and execute in the interest of their stakeholders.”

UBS identified five European cities where real estate brokerage companies are looking for alternative bases and have weighed up whether each presents a viable threat to London’s dominance.
Mr Herm added that none of the five may be able to replace London completely, which will present “a challenge for the whole of Europe”.

The weak pound makes buying property abroad particularly expensive for people who earn in sterling. But – should you find yourself relocated away from the Big Smoke for work – we’ve taken the liberty of including a few suggestions for new homes. Hopefully, the office will foot the bill.
Dublin

The Irish capital is the city of choice, according to UBS’s analysis, which called Dublin a “well-established financial centre” although it has yet to compete with London on either a European or a global scale.
Dublin’s allure is based around its close ties with the UK and the US – linguistically as well as economically – and its flexible labour and tax laws. However, Ireland’s geographical cosiness with the UK and its relative nearness to the US mean that the Fair City is slightly further away from mainland Europe. And although transport links to Europe’s capitals are strong, flight connections to the rest of the world are more limited than from other major cities.

UBS also noted that Ireland’s economic recovery has led to a surge in office occupancy, leaving little space – less than 6pc – available in the already small market.

Frankfurt

On mainland Europe, Germany’s financial district would be an obvious choice to replace London – and has the added global reach that Dublin lacks, UBS said.
Already home to the European Central Bank, the Bundesbank and several global financial services firms such as Deutsche Bank and Commerzbank, the EU’s biggest economy is well primed to pick up where London might leave off, despite having stricter labour laws than the UK.

The city is already preparing for an influx of 10,000 or so bankers over the next five years – and those from London can look forward to cheaper living costs and shorter commutes.

Frankfurt also boasts the third-largest airport in the EU, with excellent transport connections across the world, and has an office vacancy rate twice that of Dublin at around 12pc, with half a million square metres of work space available in the city centre.

Amsterdam

While Amsterdam might lack Dublin’s links to the UK or Frankfurt’s central location on the Continent, the Dutch capital boasts Europe’s best-developed pension system, according to UBS.
Amsterdam competes closely with Frankfurt on transport links, with Schiphol, the EU’s fourth-largest airport, located close to the city, while “market friendly policies and the population’s excellent English language skills keep barriers for movement relatively low”.

Amsterdam offers similar office vacancy rates to Frankfurt -around 12pc – although the city’s “Financial Mile”, Zuidas, is growing in popularity and could run out of room fast.

All in all, the Venice of the North presents a viable alternative for Europe’s new business centre – with one hiccup. Those in financial services might not like the 20pc cap on bankers’ bonuses.

Paris

The City of Light is not a favourite to become the new financial hotspot thanks to its reputation for rules and regulations, despite its many major banks and asset management firms.
This is not for want of trying: Valerie Pecresse, head of the Paris regional government, wrote to 4,000 British executives the day after the referendum extolling the business virtues and “unparalleled quality of life” offered by her city.

But UBS said that Paris is held back by its relatively rigid regulatory and legal environment and resistance to speaking English, “the global working language”.

However, the French capital is the best-connected city on the shortlist, with Charles de Gaulle, the busiest airport in the EU after London, on its doorstep – and unlike Frankfurt and Amsterdam, Paris is the country’s political home as well as its economic centre.

Luxembourg

Luxembourg’s main drawback is its size. With a national population of roughly half a million people, and only 4m square metres of office space, the district would soon be overrun if London’s City workers relocated.

Just 4pc of the office space is currently available, presenting a challenge for arriving companies, and Luxembourg’s Findel International Airport can barely compete with the bustling flight links of its neighbouring countries.
However, its convenient location – nestled between Germany and Belgium – places it well to draw from both the financial and political capitals of Europe.

Article Source: http://tinyurl.com/kbwqb42

Water and waste solutions firm Glan Agua and civil engineering company MEIC have both opened new offices in Loughrea, Galway, as they look to add 60 new jobs over the next five years.

Both firms are owned by construction group Mota Engil, which is expanding its Irish operations and creating a UK and Ireland headquarters in Loughrea.
Mota Engil chief executive Goncalo Moura Martins said the firm is committed to developing career opportunities for local engineers.

“With the opening of new offices and the goal of creating 60 new jobs in Ireland in the coming years, Mota-Engil is reaffirming its commitment to this market and our intent to continue to invest in this country in order to be a leader in the technical areas in which we operate,” the Mote Engil boss said.
Glan Agua currently employs 63 people after being founded in 2008 in Ballinasloe.

Jobs minister Mary Mitchell O’Connor welcomed the announcement.
“I am delighted that this will benefit Loughrea and the surrounding areas. One of my priorities as Minister is creating an environment where job growth can thrive, particularly in rural Ireland. I believe only a strong economy supporting people at work can pay for the services needed to create a fair society.”

Glan Agua and MEIC will be looking to fill a number of positions including civil, mechanical, and environmental engineers to facilitate their expansion. For more information/to apply for the new roles see http://www.glanagua.ie/recruitment.php

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European shares rose on Thursday after a three-day losing streak, buoyed by gains in major consumer goods stocks such as Danone and Associated British Foods.

The pan-European STOXX 600 index, which had fallen in the last three sessions, rose 1.5 percent while the FTSEurofirst 300 index advanced 1.4 percent.
Danone surged 7 percent as investors welcomed its plans to buy U.S. organic foods group WhiteWave in a $12.5 billion deal.

“WhiteWave is a great strategic fit in terms of health orientation. The company should furthermore be a boost for organic growth in coming years,” said Baader Helvea analyst Andreas von Arx.
Associated British Foods rose 7.7 percent after saying it was sticking to plans to expand its Primark clothing chain across Europe and the U.S., and sounding an optimistic note about its continued growth despite uncertainty created by Britain’s vote to leave the EU.

Shares in the Swiss technology company Meyer Burger surged 17 percent after its interim results beat market estimates.
Nevertheless, the STOXX 600 index remains down around 7 percent since the June 23 vote in favour of “Brexit”, with banking and British property stocks having been hit particularly hard.

Stock markets got some support from the minutes for the June 14-15 meeting of the U.S. Federal Reserve late on Wednesday, showing the Fed’s policymakers had decided interest rate hikes should stay on hold until the consequences of Britain’s EU referendum became clearer.
However, several traders and investors said the uncertainty created by Brexit would continue to weigh on European markets, with the STOXX 600 down around 10 percent so far in 2016.

“I prefer the U.S. market to Europe. European stocks may be up today, but it’s arguably not that big a move given the shakedown we had after the Brexit vote, and there is just too much uncertainty over Europe at the moment,” said Andreas Clenow, chief investment officer at ACIES Asset Management.

Article Source: http://tinyurl.com/kbwqb42

Ireland is likely to suffer an economic hit from Brexit, the National Treasury Management Agency (NTMA) has warned.

In a presentation aimed at investors in the bond markets, who lend to the State, the agency that manages the country’s debt said Irish banks can expect to suffer because of their operations in Britain.
Read more: JP Morgan on Brexit: ‘Worst case scenario we move a few thousand out of London’

The agency said a recession in the UK in the wake of the Brexit vote last month would likely spread to Ireland, slowing growth here by next year.
Read more: Brexit: IDA faces new French smash and grab bid for London City jobs

“The UK may enter recession after its vote to leave the EU: if UK GDP drops by 1pc, Ireland’s may fall by 0.3pc to 0.8pc. The arithmetic “carryover” in 2016 helps, so 2017 sees the impact. The Minister for Finance has cut the Government’s 2017 GDP forecast to 3.4pc from 4.2pc.”
The Irish economy is growing faster than every other euro area country, and growth is broad based and strong, the NTMA said.

Article Source: http://tinyurl.com/kbwqb42

JPMorgan Chase and Co has warned that it may have to move a few thousand of its London-based staff to other eurozone offices as a result of Brexit.

In an interview with Italian newspaper Il Sole-24 Ore, the bank’s boss Jamie Dimon said he is still unsure what is going to happen but maintains the majority of its staff was set to stay in the UK.
“The worst case is that we might have to relocate a few thousand people to other offices in the Eurozone,” Mr Dimon told the newspaper.

Amongst the questions posed by the banking chief was whether or not the UK could maintain the passport rule in its exit negotiations with the EU.
Under current legislation, firms with operations in the UK are able to sell their services to the other member states.

Mr Dimon conceded that if that ability wasn’t maintained he may look to move some of the bank’s 16,000-strong UK staff elsewhere.
The New Yorker also believes that the outcome of the vote could be reversed saying the country could still be incentivised to stay within the union.

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American multinationals are “deeply concerned” about the personal tax burden in Ireland, according to the American Chamber of Commerce Ireland.

The Chamber said reform would make Ireland a more attractive location for talented workers.
The call comes as Ireland faces increased competition for foreign direct investment with UK chancellor George Osborne announcing plans to slash corporation tax below 15pc, with Northern Irish Finance Minister Mairtin O Muilleoir saying he could cut Northern Ireland’s rate below the Republic’s 12.5pc.

In a submission to a Department of Finance public consultation on the taxation of share-based remuneration, the Chamber called for an overhaul of the tax treatment of share options, including removing the income tax liability that comes due when options were exercised.
It said it would provide a wider submission on other tax reforms before the Budget.

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Irish oil and gas explorer Tullow Oil is looking to raise $300m via issuing convertible bonds.

The money would be used for “for general corporate purposes and to fund capital investment in the Group’s assets in West and East Africa,” Tullow told the market this morning.
The bonds carry a coupon of 6.625pc, Tullow said, and convertible into shares in the company.

Chief financial officer Ian Springett said the issue would “further diversify Tullow Oil’s sources of funding and give the company access to a new investor base.”
The company has had a difficult run of late, with technical difficulties at the Jubilee field in Ghana leading to a shutdown in production. It saw its share price battered by the sharp decline in oil prices.

However, it said last week it expects first oil at what the company calls a “transformational project” known as TEN, also in Ghana. within weeks.
Tullow shares were down 15pc in London as of 2:15pm.

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Consumer sentiment hit a four-month high in June, just ahead of the British vote to leave the European Union.

The Brexit vote Brexit is likely to hit sentiment in the coming months but unlikely to prompt a collapse, according to the authors of the KBC Bank Ireland/ESRI consumer sentiment index.
This country having more to lose from Brexit than other European Union member, the report said.

The KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 103.4 in June from 98.1 in May. It is now close to the same level it was at a year ago, but off the a 15-year high in January.
“By increasing both uncertainty and downside risks to the economic outlook, Brexit is likely to weigh on Irish consumer sentiment in the coming months,” KBC chief economist Austin Hughes said.

“Consumer sentiment readings could remain very ‘choppy’ in the near-term with a risk of clearly softer readings in the next month or two. However, while we expect some weakening in sentiment, we don’t expect any dramatic deterioration.”
Ireland’s economy has grown faster than any other in Europe for the last three years and is expected to do so again in 2016, with a 4.9 percent expansion forecast. The government has cut its forecast for 2017 to around 3.4 percent from 3.9 percent, however, and warned that worse could be ahead if Britain strikes an unfavourable post-Brexit deal with the EU.

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The Department of Finance has warned that Vat receipts could drop in the wake of the Brexit vote, claiming plunging sterling may lure shoppers to the North instead.

The admission Brexit will hit our tax take came as it was confirmed the takings for the first half of the year were €742m better than expected.

The department acknowledged the referendum result would ultimately have an impact on the Exchequer but added it was too early to say by how much.

“There will be an impact. What’s hard to tell is how much and that’s something we’ll be looking at in the context of the forecast for the Budget,” said John Palmer, Principal Officer at the Department of Finance.
“We would expect, later on in the year, and again it depends on the strength of sterling, that we will probably see some linkage across to Northern Ireland in terms of Vat, and people [will] go and shop there.”

Sterling has weakened since the Brexit vote last month, making Northern Ireland more attractive as a destination for shoppers to stock up on groceries or other items.

At the time of the vote, €1 bought about 76 pence in sterling. Now it’s buying around 83 pence.

Shoppers flocked to Northern Ireland in 2009 when the euro neared parity with sterling at one stage. That outflow of business created havoc for the retail trade here, and became a major political issue. Vat receipts so far this year are already €231m below expectations at €6.2bn.

International research group Kantar Worldpanel also warned that grocery shoppers here might drift to Northern Ireland due to the weakening sterling.
It comes as both the Dublin and Belfast governments have tried to play down the potential impact of Britain’s plan to cut company tax to 15pc in efforts to stave off recession in the wake of Brexit.

Finance Minister Michael Noonan said the British Chancellor had two years ago signalled a phased cut to 17pc – and the move to 15pc was not much below that. The move by Chancellor George Osborne is an attempt to keep investment in Britain after the shock referendum decision on June 23 for the country to leave the EU.
Hostility

Speaking after North-South government talks at Dublin Castle, Taoiseach Enda Kenny conceded the move would have implications for both parts of Ireland. But Mr Kenny said other factors influenced investors’ decisions and both the North and the Republic had been successful in attracting business investment.
“Obviously, there are implications here both for Ireland and Northern Ireland,” Mr Kenny said. But he added that the gap between the Irish and British rates could be influential for business decisions also.

But Northern Ireland First Minister Arlene Foster, of the DUP, said the move could in fact help the North – even if it continued with cuts down to the 12.5pc planned for Northern Ireland in spring 2018.
This is to match the rate which applies in the Republic, and which is the source of much hostility within the EU.

“I do not fear the decision that the chancellor has made. It just adds to the tools we have today,” said Ms Foster, who campaigned for the ‘Leave’ side.

She said Northern Ireland was able to compete for overseas investment for many reasons, including a talented workforce. The key now was to ensure the North got the best result in negotiations between the EU and the UK.

Ms Foster said a fully fledged move for a 12.5pc company tax rate all across the United Kingdom could save Belfast the expense of taking control of company tax.
Mr Noonan said if England, Scotland and Wales reduced their rates, there would not be much of an advantage to Northern Ireland, but he added that Brexit generally was a threat.

Meanwhile, the latest Exchequer returns showed income tax is on target at €8.77bn, while Vat is €231m below expectations so far this year at €6.22bn.

The surge in corporation tax is continuing, with receipts up 18.9pc, or €505m, above profile for the first six months of 2016.
Excise receipts so far this year are over 14pc above target, due in part to a front-loading in activity in advance of the plain tobacco packaging, with companies paying the excise on the products as they are allowed to sell the branded products for a year after the plain packaging comes into force.

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Latest figures released by the Central Statistics Office (CSO) show that unemployment remained static in the month of June.

The figures reveal that the nationwide rate of unemployment still stands at 7.8pc, the same as the figure recorded for May of this year. However unemployment has contracted by 1.6pc compared to June 2015.
There is a higher rate of employment amongst females, with just 6.2pc of women out of work. The figure for males is higher at 9.1pc, down 0.1pc from May.

Commenting on the figures ISME, CEO, Mark Fielding said: “The recent negative fluctuation of the euro vis a vis sterling shows how vulnerable the economy is to external factors.
The tax and welfare system must be used to put money back into people’s pockets, rather than facilitating and promising further wage increases. The notion of pushing up wage costs at this juncture fails to recognise the business realities in what is still a very challenging economic environment for the SME sector.”

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