There is a saying that “markets hate uncertainty” and there can be few times when the UK has faced a more uncertain path than the one currently in front of it. On Wednesday, UK Prime Minister Theresa May kick-started a process that no country has gone through before: leaving the European Union (EU).
The following day, Brexit Secretary David Davis unveiled the government’s ‘Great Repeal Bill’, which will effectively transfer EU laws to British statute books. The intention is provide some short-term clarity for businesses and individuals.
It may have done the trick. Despite the week’s momentous events, financial markets were relatively quiet. The FTSE 100 index rose by 0.4% over the four sessions to the close on Thursday. And although there was some mid-week volatility, sterling ended the week more or less where it started against both the euro and the dollar.
One of the main concerns about Brexit has been the threat that major financial companies will desert the City when a presence in London no longer confers an ‘EU passport’ allowing trading throughout the single market.
Some large investment banks have already announced plans to set up new offices in Frankfurt, Paris and Dublin. This week, Lloyd’s of London unveiled plans for a new base in Brussels. However, the insurer was at pains to point out the new office will be a subsidiary and that no London-based roles are currently under threat.
By contrast, the London Stock Exchange had its European venture curtailed. The company had planned to merge with Germany’s Deutsche Boerse to create one of the world’s biggest securities and derivatives markets. But the deal was kiboshed by EU regulators, who were concerned the new entity would represent a monopoly.
Oil and gas stocks helped to buoy global markets after data showed that stores of US crude oil were rising less quickly than expected. However, an extra 867,000 barrels of oil were added to stockpiles last week and inventories remain close to record highs.
Robust economic data also provided a fillip. US consumer confidence rose to a 16-year high while the country’s monthly trade deficit slipped sharply. This helped lift the S&P 500 index by 1.0%. European shares rose by a similar amount. The FTSE World Europe (ex UK) was also up 1.0%.
A bookstore in Dallas has come up with an innovative way to attract younger readers to classic books. In September last year it started using a version of clickbait (links to sensational-sounding stories, the aim of which is to generate advertising revenue) on its website. The shop monikered the links ‘Litbait’.
And for a slightly more highbrow audience:
The ploy certainly seems to have worked. The number of visitors to the company’s website has risen by 14,000%, so it appears the bait reeled in plenty of potential extra customers. Literally.
Editorial image credit: ROPI / Alamy Stock Photo