GBP Strengthens Following Stronger Than Expected Employment and Wages Figures..

GBP was seen trading higher against the Euro, Dollar and a host of other major currencies on Tuesday, Jan. 21 after the release of official labour market figures that showed both a jump in employment and wages in December.

The strong numbers come in defiance of a recent run of soft economic statistics, and will give policy makers at the Bank of England reason to keep interest rates unchanged and cast into doubt growing market expectations for a January 30 interest rate cut.

The ONS employment in the UK expanded by 208K in the three months to December, well above the 110K expected by the market. The claimant count in December did see an addition of 14.9K out-of-work benefit claimants, but this was well below the more pessimistic 22.6K the market was expecting. The UK employment rate was estimated at a record high of 76.3%, 0.6 percentage points higher than a year earlier and 0.5 percentage points up on the previous quarter.

Based on the employment statistics out today, it would be hard to argue that this is an economy that requires an interest rate cut. Members of the Bank of England’s Monetary Policy Committee have signalled through a series of speeches in January that a rate cut might be warranted in the first half of 2020 based on the observation the economy is slowing. An interest rate cut would, in theory, boost the economy as the cost of borrowing money falls. A side effect of such a cut is however often a softening in the currency.

The implied probability of a 25bps interest rate cut on January 30 fell to 64%, from a little over 70% last week. Should market expectations for such an outcome be pared back further, it stands that the Pound will recover more lost ground.

GBPEUR rate is quoted at 1.1753 at the time of writing, having started the day at 1.1719  GBPUSD exchange rate at 1.3050, having started the day at 1.30.

Pound Pares Gains as Brexit Hangs In The Balance as EU Doubts a Deal this Week, UK Departure Date Looms

A deal to smooth Britain’s departure from the European Union hung in the balance on Monday after diplomats indicated the bloc wanted more concessions from Prime Minister Boris Johnson and said a full agreement was unlikely this week.

Monday sees the British Pound pare some of the impressive gains recorded last week, amidst news that a Brexit deal between the EU and UK still remains some way off.

GBPEUR Currently still trading in positive territory up over 3% since last week sitting at 1.1388 off a daily high of 1.1439. GBPUSD also trading up over 3% from last week at 1.2563 off day highs of 1.2617.

Boris Johnson and EU leaders face a tumultuous week of reckoning that could decide whether the divorce is orderly, acrimonious or delayed yet again.

Johnson says he wants to strike an exit deal at an EU summit this Thursday and Friday to allow an orderly departure on Oct. 31. But if an agreement is not possible he will lead the United Kingdom out of the club it joined in 1973 without a deal – even though parliament has passed a law saying he cannot do so.

EU politicians such as Irish Foreign Minister Simon Coveney said a deal was possible and that much more work was needed. But EU diplomats were pessimistic about the chances of Johnson’s hybrid customs proposal for the Irish border riddle.

In light of developments it appears markets will be prepared to adopt a wait-and-see approach to Sterling before making any major directional decisions on the currency ahead of the crunch European Council summit starting on Thursday, where it will be known if the two sides have struck a deal.


Queen Elizabeth Approves Law Seeking To Block October 31 No-Deal Brexit… GBP Rallies

Britain’s Queen Elizabeth on Monday gave final approval to a piece of legislation which seeks to prevent Prime Minister Boris Johnson from taking the country out of the European Union without an exit deal on Oct. 31.

The step, known as Royal Assent, is effectively a rubber-stamp from the monarch for the law which passed through parliament last week despite opposition from the government. The Royal Assent was announced in parliament’s upper chamber, the House of Lords.

GBPEUR hits 1.1229

GBPUSD hits 1.2385

Sterling Regains Loses Following Boris Johnson Losing His Majority- Lawmaker Resigns

Prime Minister Boris Johnson lost his majority yesterday in the Houses Of Commons as he faces a showdown with members of his Conservative Party that will determine the U.K.’s exit from the European Union and the length of his premiership.

Johnson has vowed to leave the bloc on Oct. 31, but his political enemies are fighting to stop him him from doing so without a divorce deal. Tonight is the first of a series of key votes in Parliament.
Sterling rebounded on Wednesday after British lawmakers seized control of the parliamentary timetable to try to block a no-deal Brexit.
The gain, which followed the pound slumping to a three-year low on Tuesday, is likely to precede more big price swings in the currency as the battle over Brexit enters another crucial phase.
Lawmakers who defeated Prime Minister Boris Johnson’s government late on Tuesday are expected to introduce a bill in parliament on Wednesday seeking to stop Britain from leaving the European Union on Oct. 31 without transitional arrangements.

This prompted the prime minister to announce that he would push for a snap election. It is expected that the motion for an early general election will be submitted on Wednesday.

GBP Rallied back up to 1.1061 this morning against the euro and 1.2158 as of 09:57 GMT.

Sterling Finds Some Support But Brexit Fears Remain

GBP rose slightly on Tuesday to hold above recent lows although it remained vulnerable as traders still worry that Britain is headed for a no-deal Brexit. This even though parliament law makers have previously stated that it will not let this pass.

Sterling hit a new 23-month low against the euro overnight, with the losses largely down to strength in the single currency rather than more Brexit-related worries.

The Guardian newspaper reported late on Monday that Brussels diplomats briefed after a meeting with British Prime Minister Boris Johnson’s chief European envoy said it was clear Johnson had no intention of renegotiating the withdrawal agreement.

Johnson has said Britain will leave the European Union on Oct. 31 with or without a deal.

The risk of a no-deal Brexit in October has surged in recent weeks under Johnson, hammering the pound to its lowest in more than two years.

On Tuesday, sterling rose 0.3% against the dollar to 1.2173 , away from the 31-month low of 1.2080 hit last week.

Against the euro the pound recovered from a nearly 2-year low of 1.0811 pence to 1.0862, up 0.2% on the day.

In the run-up to the Brexit deadline at end-October, we expect GBP/EUR to remain volatile and maybe more so than we previously thought likely. Financial markets are taking Boris Johnson’s direct approach literally and, in the run-up to October.

We believe a less dramatic outcome at the end of October. We expect GBP/EUR to settle between 1.0989-1.1235  on the back of an extension and/or snap election.


First-Time Buyer Mortgage Approvals Hit A Six-Month High But Remortgaging Powers Ahead

The number of mortgage approvals for first-time buyers and home movers continued to climb in May but remortgaging is back in the driving seat.

Lending data from UK Finance shows approvals to first-time buyers were up 0.5% annually to 30,720, the highest level for six months.

Approvals for home movers were down 1.2% annually to 29,430, but still at the highest level so far this year.

However, remortgaging dominated the sector in May, with approvals up 20% annually.

The figures show a 19.8% jump in approvals for remortgages with additional borrowing.

This has been seen as sign that home owners are looking to improve rather than move.

UK Finance said this was also in line with fixed rate deals coming to an end and customers therefore reviewing their mortgage.

Meanwhile, buy-to-let approvals were flat.

House Price Rises On The Way Ahead Of Brexit Deadline – Forecast

House prices are set to jump this summer based on deals that have already been agreed, it has been forecast.

Conveyancing comparison website Reallymoving has analysed property price information from the quote requests it receives.

Based on these prices – which have already been agreed between sellers and buyers –  it has forecast annual price growth of 0.7% in July, followed by 1.2% in August and 3.8% in September.

If correct, this would be the highest annual growth since last November.

It is predicting more volatile pricing on a monthly basis, with values down 0.5% this month compared with last, up 3.2% in August and then falling 1.4% in September.

Rob Houghton, chief executive of Reallymoving, said: “The spring market was more robust than expected and this has prompted positive growth through the summer, particularly for deals agreed in May which are translating to sales in August.

“The chance of us leaving the EU without a deal seems increasingly likely and people are realising that the window between now and the end of October may present their best opportunity to sell.

“The market has proved itself to be surprisingly stable over the last 12 months but this could change if we crash out of the EU on Halloween.

“Annually prices are on an upward trajectory from June through to September, when they are forecast to end the summer 3.8% higher than last September, but the longer term outlook remains uncertain.

“There is huge pent-up demand in the market, however, and if the UK is able to agree a deal with the EU we could see a rush of properties hitting the market in the late autumn along with a surge in buyer demand.

“A mixed picture remains regionally, but there are twice as many regions forecast to see price growth over the summer than price falls, with particularly strong performances in Wales, Scotland and Northern Ireland.”

Property Industry Eye Contributed To This Report..

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Pound Sterling Forecast: Talk of October Snap General Election Poses Further Downside

The Pound recorded its ninth consecutive weekly loss against the Euro ahead of the weekend, and it recorded its lowest weekly close against the U.S. Dollar since April 2017.

The weakness extends to the majority of major currencies, as a multi-week sell-off extended amidst a combination of political uncertainty and deteriorating economic data continues to weigh.

For Sterling, it’s not just the Brexit deal/’no deal’ equation that is injecting confidence-sapping uncertainty into the market: the prospect of a General Election is another factor at play with news that the Conservative party are gearing for a General Election before the year is out.

This is news that will do little to boost confidence in the UK currency.

The Financial Times reported on Friday that “Conservative MPs are spending the summer preparing for a snap general election, claiming that if Boris Johnson becomes prime minister he will either be forced to go the polls or decide to take a gamble to increase his majority.”

Even in pre-Brexit times, impending elections did tend to inject uncertainty into the market and contribute to under performance by Sterling.

The incoming Prime Minister – in all likelihood Boris Johnson – will find he has a wafer-thin parliamentary majority at his disposal.

If the EU refuse to renegotiate the Brexit deal in a substantial manner – as evidenced by incoming European Commission President Ursula von der Leyen’s recent comments – then there is a high likelihood Johnson will have to pursue a ‘no deal’ if he is to deliver on his promise of delivering Brexit by October 31.

But, a number of Conservative Party MPs have warned they would resign from the Party in order to prevent a ‘no deal’ outcome. This could effectively paralyse government. There is also a chance they could join the opposition and deliver a vote of no-confidence in the Government if this was the only route to preventing a ‘no deal’.

With Parliament unable to agree on the next step forward, our economics team believes that the risks of a general election have materially risen. A hard Brexit or the prospect of a new election is likely to weaken the GBP further, while a controlled withdrawal or a second referendum is likely to reduce the risk premium on the GBP and strengthen it.

GBP/EUR currently trading at 1.1159 at 10:00 am GMT

GBP/USD currently trading at 1.2536 at 10:00 am GMT

New Head Of The European Commission Von der Leyen “Increases Downside Potential in the Pound” with Latest Comments on Irish Backstop..

EU leaders nominated von der Leyen, Germany’s defence minister, to take over from Jean-Claude Juncker as head of the European Commission on Tuesday and her approach to Brexit negotiations will be key to whether a new deal can be struck in coming months.

Following her nomination, von der Leyen travelled to Strasbourg, France and told colleagues she will not remove the Irish border backstop from the Brexit withdrawal Agreement. Boris Johnson and Jeremy Hunt, the contenders to replace Theresa May as the next UK Prime Minister, have both committed to renegotiate the Brexit Withdrawal Agreement, and know that removing the Irish border backstop is where any future deal lives or dies.

If triggered, the backstop would place the UK into a customs union with the EU to prevent a hard border in Ireland after Brexit. There is no time limit to how long this customs union would last and there is no independent mechanism for the UK to exit.

On the current trajectory, it appears deadlock beckons and it is little wonder there is a distinct lack of enthusiasm for the British Pound.

Rabobank’s Foley says the nomination of von der Leyen reinforces a view “that the next UK PM will not be able to win concessions from Brussels ahead of the Brexit deadline in October… On the margin this can be seen as promoting the risks of a ‘no deal’ Brexit and increasing the downside potential of the Pound.”

The Pound-to-Euro exchange rate has trended lower since May with analysts now watching to see whether the key 1.11 area will be breached.

According to the poll, the GBP/USD exchange rate would slip into a range of 1.17-1.25 in the month after UK’s exit.

On the flip side forecasters are suggesting GBP/EUR to trade at 1.16 in 6 month if Brexit is again delayed in October and a ‘no deal’ avoided.

If the UK leaves with a deal, the exchange rate would rally to a range of 1.30-1.36. Such a lift in GBP/USD would almost certainly raise GBP/EUR towards, or even above 1.20, levels last seen in 2017.

GBP Under Pressure Following Carney’s Speech last Night

The British Pound is under pressure in mid-week trade with foreign exchange markets digesting a speech by Bank of England Governor Mark Carney that prompted markets to rapidly raise expectations for an interest rate cut over coming months.

Carney spoke in Bournemouth late on Tuesday that the “stance of monetary policy is tighter than intended” owing to a disconnect between market expectations of interest rates and the Bank of England’s guidance on where they believe interest rate expectations should actually lie.

Carney’s added that downside risks to the economy have increased recently owing to global trade tensions and markets interpreted the comments as reason to increase expectations for an interest rate cut in coming months.

Currencies tend to fall when their central bank communicates the prospect of future interest rate cuts.

Carney said the global trade tensions have caused a “sea change” in investors’ outlook for the world economy that “suggests a shock to U.S. and Chinese business confidence and investment analogous to what has happened in the UK”.

“The latest actions raise the possibility that trade tensions could be far more pervasive, persistent and damaging than previously expected. The rationales for action are broadening,” he said in the speech.

The key phrase here being “the rationales for action are broadening”: markets quickly ramped up expectations for an interest rate cut at the bank on this comment. Money markets now assign a 57% probability of a 0.25% interest rate cut by the Bank in December, up from 41% ahead of Carney’s speech.

This repricing in expectations sent Sterling lower.

The intervention by the Governor means what had already been a poor day for Sterling just got worse leaving the currency trading near multi-week lows against the Dollar and Euro at the mid-week period.

“Things have gone from bad to worse for the Pound. After being knocked by a poor construction PMI earlier in the day, sterling slumped to hit a new session low moments ago in reaction to a speech by Bank of England Governor Mark Carney,” says Fawad Razaqzada, a Market Analyst with “Carney said the BoE expects economic growth in the second half of the year to be considerably weaker and that it will re-assess Brexit and trade tension in August.”

The speech appears to be a clear move by the Bank of England Governor to massage market expectations towards expecting a more sombre assessment at their next major policy update in August with the view to potentially laying the path to another interest rate cut.


Things To Watch Out For This Week On The Economic Releases Front 1st July – 5th July

Here’s what you need to know to start your week.

1. Trade talks

The U.S. and China agreed on Saturday to restart trade talks after U.S. President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing.

No deadline was set for progress on a deal, and the two sides remain at odds over significant parts of an agreement. The last major round of talks collapsed in May.

Financial markets, which have been rattled by the nearly year-long trade war, are likely to cheer the truce. Washington and Beijing have slapped tariffs on billions of dollars of each other’s imports, threatening to put the brakes on an already slowing global economy. Those tariffs remain in place while negotiations resume.

2. U.S. economic data

The U.S. June jobs report, due on Friday, will likely factor into the Federal Reserve’s decision on interest rates at its next meeting in late July.

The economy is expected to have created 164,000 jobs in June while Interest Rate Futures indicate 100% odds of a 25 basis-point cut on July 31.

But traders might be getting ahead of themselves. Fed Chairman Jerome Powell has pushed back on rate-cut pressure. And the economy looks generally robust – unemployment, at 3.6%, is at its lowest in half a century and it likely stayed there in June.

Other notable data releases on the economic calendar include the latest surveys from the Institute for Supply Management on U.S. manufacturing and service sector activity, as well as reports on factory orders and trade.

3. Fed speakers

Fed Vice Chair Richard Clarida is due to speak on Monday. Earlier this month, he said that the central bank is prepared to lower interest rates if necessary, but noted that the broad outlook for the U.S. economy remains positive.

New York Fed President John Williams is due to participate in a panel discussion about the global economic and monetary policy outlook in Zurich on Tuesday.

Cleveland Fed President Loretta Mester a non-voting member of the Federal Open Market Committee, is due to deliver remarks at a separate event the same day.

4. OPEC meeting

The Organization of the Petroleum Exporting Countries will gather in Vienna on Monday and meet with non-OPEC states – known as OPEC+ – on Tuesday to discuss extending a deal – due to expire Sunday- on curbing oil output by 1.2 million barrels per day in order to support prices.

But Saturday’s announcement by Russian President Vladimir Putin that he and Saudi Arabia’s Prince Mohammed Bin Salman agreed to extend the current output deal has made the meeting almost redundant.

How much impact any decision will have is also debatable. Oil output in the U.S. hit a record 11 million barrels per day in 2018 and is on track to reach 12.4 million barrels per day this year according to the Energy Information Administration, offsetting OPEC’s output cuts.

International benchmark Brent Crude has climbed more than 25% since the start of the year, but still remains below its 2018 highs.

5. U.K. PMIs

Surveys of the U.K. manufacturing, services and construction sectors this week are expected to indicate that second quarter growth is likely to be more-or-less flat, which will diminish the chances of a rate hike by the Bank of England this year.

Much of this is being driven by weakness in manufacturing, where new orders and production are falling and companies are stockpiling in order to prepare for the prospect of a no-deal Brexit.

“That should deliver another sub-50 manufacturing PMI, although things don’t look spectacular in the much larger service sector either. With Brexit uncertainty set to ramp up over the summer, thus unlikely that the Bank of England will hike rates this year,” ING said.

How Has Brexit Vote Affected The UK Economy? June Verdict Review..

Mounting no-deal Brexit fears hit sterling

The rising likelihood of no-deal Brexit has dragged down the pound on the foreign exchanges over the past month, as the prospect of a no-deal-focused Boris Johnson as prime minister becomes more likely. Sterling had fallen sharply to less than $1.26 against the US dollar and to about €1.12 against the euro. However, the US Federal Reserve coming closer to being forced into cutting interest rates amid fears over a slowing US economy has dampened the strength of the dollar in the past week. This has helped to inflate the value of the pound. The outgoing head of the European Central Bank, Mario Draghi, also suggested that the eurozone requires more economic stimulus, which has sapped the strength of the euro.

Stock markets surge amid stimulus talk

Mario Draghi using one of his final speeches as ECB president to suggest that interest rates in the eurozone may need to be cut further has helped European equities power ahead over the past month. Increased stimulus can help the stock market to rise, as companies’ borrowing costs are cut. Investors have also become more positive about the chances of a resolution in the US-China trade dispute, after a prolonged period of concern over the standoff between Washington and Beijing. Although rate cuts from the US Fed could suggest a weakening economy, the prospect of stimulus from the US central bank has also lifted markets.

Business surveys paint weak growth picture

Surveys of business activity used as early warning signals for the British economy by the Bank of England and the Treasury suggested that UK economic growth remained weak last month. The latest snapshot from IHS Markit and the Chartered Institute of Procurement and Supply showed that service sector activity, which accounts for four-fifths of the economy, strengthened in May, despite manufacturing and construction slumping into contraction amid heightened levels of uncertainty over Brexit. The IHS Markit/Cips services purchasing managers rose to a three-month high of 51 from 50.4 in April, following a rise in domestic orders. A figure above 50 indicates growth. Still, economists warned the pattern of growth remained close to stalling point.

Jobs growth slows amid Brexit uncertainty

After months of employers appearing to shrug off Brexit concerns, jobs growth slowed in the three months to April. Employment in Britain increased by 32,000 to reach a record high of 32.75m, according to the ONS, significantly down on the 99,000 jobs added to the workforce in March. Driven by rising self-employment and women entering work, economists said the weak gains suggested that companies were becoming jittery about Brexit. The jobless rate has, however, remained at the lowest level since the mid-1970s, while annual growth in average weekly wages increased to 3.4%, up from 3.3% in March. Total average pay including bonuses rose by 3.1%, down from 3.3% in March, but beating economists’ forecasts for growth of 3%.

Brexit stockpiling set to fuel economic slowdown

After fuelling an upswing in economic growth earlier this year, the stockpiling rush ahead of the original Brexit deadline is poised to drag on the economy over coming months. UK firms face renewed risks around how to plan for no deal after the delay until the autumn. Some firms are likely to run down their stocks rather than place new orders, hitting growth, according to the Bank of England, as it slashed its forecast for the second quarter to zero from a previous rate of 0.2%. The Bank’s network of regional agents believes about a tenth will scale back their plans, while others will maintain theirs or ramp them up ahead of the autumn. Although Boris Johnson has urged Britain to do more planning for no-deal Brexit, most firms say they are “ready as they can be”, according to the Bank. However, the lack of clarity limits the extent to which they can be fully ready.

Residential Transactions In England And Wales At A Five-Year Low- Whilst Mortgage Approvals Up 0.9% YOY

It very much looks like first time buyers are awaiting the outcome of Brexit negotiations, with annual mortgage approvals figures year on year are up 0.9% the number of transactions in England and Wales fell to a five-year low last year.

The ONS figures shows that a drop in purchases of typical buy-to-let and first-time buyer homes leading the decline.

The ONS house price statistics for small areas found the total number of residential property sales recorded by HM Land Registry for England and Wales fell 5.3% annually to 856,420 in December.

This was the second consecutive year in which the number of property transactions has decreased in the two countries and is the lowest number of sales since the year ending December 2013.

The figures don’t include data for Scotland and Northern Ireland.

Transactions involving flats and maisonettes suffered the most, declining 10.3% – with 17,352 fewer sales – from the previous year, a larger fall than any other property type.

The next largest decrease was for detached properties and terrace properties, of which there were 4.9% fewer transactions compared with 2017.

The overall value of residential property transactions in England and Wales – a combination of sales and prices – fell by 3.9% annually in 2018 to £255bn, the ONS said.

Separate data shows that the number of mortgage approvals for house purchase hit a three-year high in May.

Trade body UK Finance says there were 49,683 mortgage approvals last month, up 9.1% annually and the highest number since June 2016.

However, the value of home loans fell 0.4% annually to £21.9bn.

The previously strong market for remortgaging declined, with approval down 3.7% annually.

Property Industry Eye Contributed To This Article.

What is Consular Help?

What is Consular Help?

A considerable part of my years as a Foreign and Commonwealth Office (FCO) British diplomat was spent in charge of what we called “consular” work. Essentially that meant looking after British Citizens who had got into trouble while overseas. Getting into trouble meant anything from losing their passport to being victims of crime, to being arrested, to getting seriously ill or – and sadly this happened more frequently than you might think – dying. Every year some 3,600 British Citizens die abroad.

Consular work is very rewarding. It’s about helping people who are in real need and are vulnerable. In Venezuela, we had regular customers, male as well as female, whose shoulder-bag had been stolen by a guy on a motor-bike, who had cut the bag’s strap with a knife. Inside the bag were often purses or wallets containing travel documents, tickets and other valuables. In Germany we worked with German and British police to ensure speedy resolution of incidents involving British football fans, who had run afoul of the law when supporting their favourite teams in European Champions’ League fixtures against Bundesliga opposition. And we also gave advice to the British mother of a child allegedly abducted by her German husband.

Governmental consular staff are well-trained and professional. And generally, they do a fantastic job. But they are not always able to help. Sometimes they are not allowed to become involved. For example, they cannot:

  • issue new or replacement passports, or accept applications for these, because passports are issued by Her Majesty’s Passport Office in the UK
  • give out legal advice or translate foreign documents, because such support is best provided by independent professionals.
  • investigate crimes or interfere in local criminal or civil proceedings, because they must respect other countries’ systems, just as we expect others to respect the UK’s laws and legal systems.
  • pay any bills or give out money from public funds because they are not funded to do this and it is the obligation of individuals to take responsibility for themselves.
  • get involved (including offering advice) in private disputes over property, employment, commercial or other matters, because they are in no position to judge the facts and have no jurisdiction overseas to resolve such matters

And sometimes they simply do not have the capacity to help, either because we do not have an Embassy or Consulate in the country concerned. Or the incident occurs out of office hours and is not a genuine emergency. Or the consular staff contacted consider the support requested an inappropriate use of government resources.  They might for example be in a position to provide advice about how to medivac the victim of a serious injury or illness. They may be able to issue an emergency travel document, if the original has gone missing, or is unavailable. They should have names of local doctors or lawyers, who can notarise documents required before the victim can leave the country. But they are unlikely to have the resources to help move luggage from the hotel of the person who has been medivaced. Nor would they be able to make arrangements for the family of that person to fly out to support the victim, or to help apply for the visas which would allow the victim to pass through a third country. Indeed, I suspect the average taxpayer, who ultimately pays for the consular service, would not be happy to have our Embassies and Consulates resourced to such an extent that they were able to provide these services.

The formal position, according to the FCO Leaflet “Support for British national Abroad”, is that: “Generally, there is no legal right to consular assistance. All assistance provided is at our discretion.”

While I was in the FCO, I often found this situation frustrating; not least because of the damage I could see arising for the Office’s reputation. Friends would often simply be baffled as to why we couldn’t – or wouldn’t – do this or that. And, over time, I came to realise that our capacity to help was shrinking. In the interests of efficiency and of maintaining consistency across jurisdictions, it was increasingly difficult for my staff to “go the extra mile”. And the number of staff available to do the job was being reduced all the time. In 2004 the number of FCO diplomatic staff engaged in consular work was over 2000. But 2018, it was less than 25. There has been a major reorganisation to make Consular Sections in Embassies be staffed by locally recruited personnel: often great people, but without the same background and experience. The statistics published annually by the FCO tell a similar story. In 2018, some 400,000 persons contacted the FCO with consular enquiries/problems. Only 17,000 – or 4% – received assistance.

I doubt if the resources situation will improve for consular work. Yet the numbers of people travelling and living abroad continues to grow: 68 million journeys in the 12 months to July 2017, compared with 56 million in 2010. And the world is becoming a more dangerous and less predictable place. Not just cities like Bangkok, Caracas and Mumbai, but even Rio de Janeiro, Cape Town, Boston and Paris (as Kim Kardashian recently discovered!).

Our Concierge company offers consular-type services in the private sector. It was founded by a former Diplomat with many years of experience in doing consular work and in training others how to do it. They employ other former diplomats, both in London and around the world, as they build up a network of Global Consular Assistance Providers who can provide on the ground support. Their services are available 24/7/365.  Unlike the FCO and other Governments, they are not bound by tight government rules as to what they can and cannot do. So they can for example arrange a local translator, help with application for a new passport and assist with arrangements for a family member to fly out to support a victim. And, unlike a holiday insurance company, they can actually give travellers hands-on support when they need it, rather than just sending a cheque to reimburse expenses on return.

Our concierge company are starting to make something of a name for themselves in the travel industry. And you can see why. They have developed a unique product and are well-placed to provide the sort of service government no longer can, indeed in many cases never could!


GBP Falls After Johnson Moves Closer To Becoming British PM – GBP Down 0.6%

GBP slipped in early trading on Friday as Brexiteer Boris Johnson moved closer to becoming British prime minister, worrying investors that his government would make a no-deal Brexit more likely.

Despite Friday’s falls, sterling remained on course for a positive week against the dollar after the Bank of England stuck to its message that interest rates would need to rise, contrasting with other policymakers that may ease policy.

After a busy week for monetary policy, sterling traders will turn their attention back to British politics and the Conservative Party leadership contest.

Johnson faces foreign minister Jeremy Hunt in a contest to succeed Theresa May as party leader and prime minister, with Johnson the odds-on favourite to secure a majority of votes from Conservative Party members. The new leader will be chosen by a ballot of party members with the result due next month.

Whoever triumphs, the new prime minister will try to wring a tweaked Brexit withdrawal deal more palatable to British politicians from a sceptical Brussels that has said there will be no further negotiation over the agreement.

The deal has been rejected three times by the British parliament, and if Johnson or Hunt cannot get it or another version passed, investors worry Britain will leave the European Union on Oct. 31 without transitional trading arrangements in place with its largest trading partner.

“Johnson is the firm favourite and based on our scenario analysis of a Johnson leadership, GBP could run into trouble this autumn,” ING analysts said in a note.

Sterling was down 0.3% by 0830 GMT at $1.2656. That still left the British currency up 0.7% this week, with most of the gains thanks to a selloff in the dollar after the Federal Reserve opened the door to looser monetary policy this year. GBPEUR is trading at 1.1180 down 0.6% from opening price of 1.1249.

British Central Bank Expected To Leave Borrowing Rates Unchanged On Thursday

Twenty economists polled all expected the British central bank’s nine monetary policymakers to vote unanimously in favour of keeping borrowing costs unchanged at Thursday’s monetary policy meeting.

While policymakers have said that benchmark interest rates may need to rise sooner than markets expect, traders are in no hurry to shift their expectations, with futures markets pricing in no rate hikes until well into late 2020.

The British currency had dropped to its weakest since January against the euro and dollar earlier in the session, as investors worry that Johnson could put Britain on a path towards a disruptive no-deal Brexit.

Johnson, the face of the campaign to leave the European Union in the 2016 referendum, won 126 of 313 votes, by far the largest number in the second round of voting for Conservative Party leader, with four other candidates also getting through.

Sterling stood at $1.2551, up 0.1% on the day and unchanged from before the results were announced.

Against a euro weakened by European Central Bank signals of looser monetary policy, the pound stood 0.3% higher, at 1.1206, albeit still near five-month lows touched earlier on Tuesday.

UBS wealth management said it believed fears of a no-deal Brexit at the end of October were overdone.

“UBS’s base case is a further extension of the October deadline and eventually general elections in the UK, which should keep the exchange rate GBPEUR in a range between 1.1200 – 1.1500 over the coming 12 months,” its chief investment office said in a research note to clients.

GBP Falls – Sixth Week Of Losses Against The Euro – GBPUSD Sub 1.2600

GBP fell again on Friday as investors trimmed their positions after Brexiteer Boris Johnson moved closer to becoming the next prime minister, with sterling on track for its sixth week of losses versus the euro.

Sterling has fallen in recent weeks as the contest to succeed Prime Minister Theresa May heats up. Investors are concerned that May’s successor will lead Britain out of the European Union with no deal in place on their future trading relations.

They are also worried about how little time whoever takes over will have to try to renegotiate May’s withdrawal agreement with Brussels. The EU says the deal is not up for renegotiation before Britain is scheduled to exit on Oct. 31.

Johnson, the face of the official Brexit campaign in the 2016 referendum, on Thursday won by far the largest number of votes in the first round of the Conservative party leadership contest. Betting markets give Johnson a 70% probability of winning.

The new prime minister should be chosen by the end of July. The seven remaining candidates to lead the Conservatives will be whittled down to two by lawmakers before a postal ballot of the wider party membership is held to select the new leader.

GBP slipped 0.2% against the euro to 1.1221, putting it on track for its sixth consecutive week of losses against the euro, its longest losing streak of the year. On Tuesday sterling hit a five-month low of 1.1195.

Versus the dollar the pound slipped 0.4% to 1.2616, with most of the losses following the release of U.S. retail sales data that triggered some buying of the greenback.

This morning GBPEUR is trading at 1.1227 and GBPUSD holding below 1.2600 at 1.2592.

Home Mover Mortgage Approvals Hit New High For 2019

Home movers and first-time buyers drove the mortgage market, for a change, in April.

Lending growth to both groups has been swamped by remortgages in recent months but industry data shows the number of home buyer mortgages increased 6.4% annually in April to 25,450 – the highest so far this year – while the number of approvals for first-time buyers was up 7.9% to 27,370.

In contrast, the number of remortgage approvals fell 3.1%, while the number of buy-to-let mortgages was flat at 5,100.

Commenting on the data, Brian Murphy, head of lending for the Mortgage Advice Bureau, said: “The report is based on April completions data, so whilst historic does provide us with an empirical ‘health check’ of the market.

“In real terms, one might suggest that today’s figures actually make for relatively reassuring reading.

“Buy-to-let lending remains steady, which is positive news for a sector that has seen many challenges of late.

“First-time buyer numbers also appear to be increasing, which is important to ensure that the market continues to function, with those taking their first steps on the property ladder providing the necessary upwards stimulus, and it’s also positive to see that the current conditions are lending support for this particular sector, both in terms of borrowing and overall affordability.

“The year-on-year rise in home movers perhaps suggests that, despite the ongoing Brexit brouhaha, movers are now just getting on with their lives, and if circumstances dictate then they are buying and selling regardless, again potentially a signal that the market is showing signs of stability.”


Property Industry Eye Contributed To This Article

Brexit: UK Firms ‘Not Even Close To Ready’ For A ‘No Deal’..

Many UK businesses “are not even close to being ready for a no-deal” Brexit, figures seen by Newsnight suggest.

In February, HMRC launched the Transitional Simplified Procedures scheme, aimed at easing imports in the event of the UK leaving the customs union and single market abruptly.

Less than 10% of the firms estimated to require the status had applied for it as of 26 May, Newsnight has found.

HMRC said it had plans to ensure “as many traders as possible are ready”.

The Transitional Simplified Procedures (TSP) would allow UK firms to import goods from mainland Europe without filling out new customs declarations at the border. UK businesses would also be allowed to postpone the payment of import duties for one year.

But figures show that only 17,800 firms had applied for the TSP as of 26 May. That’s less than 10% of the total of 240,000 firms estimated to require the status by 31 October, when the UK’s latest Article 50 extension is due to expire.

“If it really is this low we’re far, far away from being day one no-deal Brexit ready – it’s a very low number,” said Mike Spicer from the British Chambers of Commerce.

“The TSP data is terrible,” said Matt Griffith of the Bristol Chamber of Commerce.

“The top level lesson is that most small firms are not even close to being ready for a No Deal scenario.”

BBC News Contributed To This Report

Britain’s Economy Contracted Sharply In April – The Biggest Decline In Car Production Since Records Began…

Britain’s economy contracted sharply in April after the biggest decline in car production since records began, as manufacturers were unable to reverse closures planned to coincide with Britain’s expected departure from the EU.

GBP has declined throughout the day to today’s lowest levels of 1.1194 GBP/EUR and 1. 2652 GBP/USD respectively.

Early in 2019, many motor manufacturers had announced temporary shutdowns in April at their British plants, anticipating trade disruption around the time Britain was due to leave the European Union on March 29.

In the event, Prime Minister Theresa May delayed departure with just days to go. She subsequently set a new date of Oct. 31 but that was too late for businesses to change their plans.

Britain’s economy overall contracted by 0.4% in April after a 0.1% decline in March, the Office for National Statistics said on Monday, the biggest drop since March 2016 and a larger fall than any economist had forecast in a Reuters poll last week.

Britain’s National Institute of Economic and Social Research (NIESR) forecast after the data that the economy would contract by 0.2% in the second quarter, ending more than six years of unbroken quarterly growth.

Problems went beyond the drop in car production, NIESR economist Garry Young said: “Brexit-related uncertainty at home and trade tensions abroad (are) dragging on investment spending and economic growth.”

There had been an expectancy that GDP growth would be no more than 0.2% quarter-on-quarter in the second quarter, but even this muted performance is now looking somewhat optimistic.

Britain saw its biggest monthly fall in goods imports since records began in 1998, down 14.4% in April. Exports also slid on a monthly basis, down 10.9% in April, the biggest fall since July 2006.

Britain’s economy has lost momentum since 2016’s Brexit referendum — before which growth would typically exceed 2% a year — but the job market has strengthened and Haldane said on Saturday that the time for another rate rise was approaching.

Sterling Falls To New Four-Month Low As Political Uncertainty Deepens

GBP fell to its weakest levels since January on Wednesday as Britain’s prime minister made a last-ditch bid to get a Brexit deal through parliament before she leaves office, though scepticism from the opposition Labour Party capped gains.

After failing three times to get parliament’s approval for her EU divorce deal, Theresa May said she would present a “new, bold offer” to lawmakers with “an improved package of measures” in a final attempt to secure a Brexit deal.

News reports suggest it (May’s package) is a retread of old ideas and as long as that is the case, the market is going to be very sceptical,

The leader of Britain’s opposition Labour Party said he would not support May’s new move to push through her Brexit bill if it was fundamentally the same as the bill that had been defeated three times before.

This inability of the British parliament to compromise on the terms for exiting the European Union has led the market to take a much more binary view on the outcome, between a so-called hard or no-deal Brexit and a second EU referendum.

Adding to this feeling is a poll that showed Boris Johnson, a prominent leader of the Brexit campaign, as top choice among members of Britain’s ruling Conservative Party to replace May as prime minister.

Though there is widespread scepticism that any such deal will get ratified by lawmakers, sterling fell further against the dollar to $1.2660 this morning. That followed a drop of 2.2% last week, its worst week since October 2017.

The British currency was down against the euro this morning once again at 1.1348.

Brexit Disarray : Labour Declares Talks Dead As May’s Premiership Under Threat

Britain’s tumultuous divorce from the European Union was again in disarray on Friday as the opposition Labour Party declared last-ditch cross-party talks were dead in the twilight of Prime Minister Theresa May’s premiership.

Nearly three years after the United Kingdom voted 52% to 48% in a referendum to leave the EU, it is still unclear how, when or if it will ever leave the European club it joined in 1973. The current deadline to leave is Oct. 31.

Brexit talks between May’s Conservatives and the opposition Labour Party have ended without an agreement hours after May agreed on Thursday to set out a timetable for her departure in early June.

Labour leader Jeremy Corbyn wrote to May on Friday, informing her that talks had “gone as far as they can” due to “the increasing weakness and instability” of the government.

Corbyn said May’s government had become unstable and its authority had been eroded undermining confidence in the “government’s ability to deliver any compromise agreement”.

He said the party would oppose May’s thrice-rejected deal when it returns to parliament.

May’s hands have been tied, knowing that to make concessions to Labour would lead to fury in her divided party. Labour has feared that any compromises on issues such as workers’ rights would be torn up by May’s successor.

GBPEUR Falls to 1.1427 / GBPUSD Falls to 1.2759 at 11:09 am GMT

Sterling Hits Three-Month Low As Brexit Deadlock Saps Support For PM May

GBP fell sharply on Wednesday on growing expectations that Prime Minister Theresa May will again fail to get her Brexit deal approved and could soon face a leadership challenge.

Sterling has weakened more than 1% this month as deadlocked cross-party talks expose deep political divisions over how, when and even if Brexit should take place.

May plans to put forward her thrice-rejected Brexit deal in the week beginning June 3, to try to secure an agreement before lawmakers go on summer holiday.

But Britain’s opposition Labour Party said it would not ratify the deal if a compromise agreement is not reached with the government.

Those comments fuelled speculation that May will soon be ousted and pressured the pound.

The currency fell more than 0.5% to $1.2827, its lowest since Feb 15, and dropped around 0.4% versus the euro to 1.1448.

Sterling has fallen for eight consecutive days against the dollar despite mostly solid economic data in Britain in recent months.

Sterling Falls Below $1.30 Against USD And Below 1.16 Against Euro Ahead Of GDP Data

The British pound was little changed on Friday as doubts about whether Prime Minister Theresa May could reach a Brexit agreement with her political opponents pressured the currency, while traders prepared for March economic growth numbers.

According to a Reuters poll of economists, Britain’s economy is not expected to have grown in March, after expanding 0.2% in February.

Momentum in the British economy has slowed in 2019 as uncertainty related to how and when Britain will leave the European Union has weighed on business investment. But the economy has also proven resilient, with British consumers continuing to spend.

Sterling on Thursday dropped to $1.2967, its weakest in May, pushed lower by media reports that talks between the ruling Conservative and opposition Labour parties to agree a Brexit deal had run into the sand.

The government, after delaying Brexit until the end of October, wants to put its repeatedly-rejected withdrawal agreement to parliament.

The pound was little changed at $1.3002, while against the euro it fell 0.1% to 1.1583.

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Sterling Slumps On Report Brexit Talks Near Collapse..

GBP weakened on Wednesday on signs that talks between Britain’s government and the main opposition Labour Party to break the Brexit deadlock may soon collapse.

The pound is falling as Brexit negotiations between Britain’s Conservative government and the opposition Labour Party lumber on with little success and as concerns grow about a challenge to Prime Minister Theresa May’s leadership.

All this following late Friday afternoon rallies in GBP after shocking local election results with voters insisting on cross party Brexit agreement being passed.

But the suggestion that the talks could be pronounced dead later on Wednesday by broadcaster ITV’s political editor took sterling down another leg.

“The announcement that the UK will take part in European elections confirms that cross-party Brexit talks aren’t going anywhere fast. This also refocuses attention on a leadership challenge to May

It fell towards $1.31, down 0.6 percent on the day, and also hit a six-day low versus the euro of 1.1613 , down half a percent on the day.


Stock Markets Tumble After Trump Threatens to Dramatically Increase China Tariffs from 10% to 25%…

Global financial markets have been sent into a tailspin after Donald Trump risked jeopardising delicate trade talks with China by unexpectedly saying he would raise tariffs further on Chinese goods this week.

Stocks in China closed down 5.5% on Monday as investors in Asia Pacific were caught off guard by the US president’s tweets and reports indicating the government in Beijing might pull out of this week’s scheduled talks.

China’s ministry of foreign affairs said on Monday that Beijing was still preparing to send a delegation to Washington but did not say whether the country’s chief negotiator, Liu He, would be attending the meetings in Washington.

After weeks of warnings from many on Wall Street that price swings across global markets were too subdued, the American president’s threat to boost tariffs on China sent volatility soaring Monday. The VIX Index jumped 43 percent, the most since October — the start of a horrible quarter for U.S. equities. S&P 500 Index futures slid 1.7 percent and the Shanghai Composite fell 5.6 percent, the most since February 2016. European shares also dropped.

Whether they were a negotiating tactic or a sign of something more ominous, Trump’s tweets jolted markets that had been lulled in recent weeks by signs of progress in trade talks, a dovish turn by the Federal Reserve and better-than-expected corporate earnings. Investors who had grown accustomed to cross-asset volatility at or near historically low levels were once again forced to consider that all might not be smooth sailing.

Traders feared that Trump’s threat to raise tariffs on $200bn of Chinese goods to 25% on Friday from 10% and then target a further $325bn of Chinese goods could destabilise global financial markets that had been boosted by what appeared to be encouraging progress in the negotiations.

The huge drop in Chinese shares follows a three-day national holiday and came despite a move on Monday by China’s central bank to cut reserve requirements for smaller banks to help boost lending to small and private firms. Expect a busy currency market on Tuesday Morning…

FOREX- Sterling Soars Into The Weekend – Local Election Results Push Two Main Parties Towards A Brexit Deal

Pound Sterling is the week’s best performing currency, enjoying gains of three-quarters of a percent against the Euro and one percent against the U.S. Dollar. Ahead of the weekend, currency traders will be digesting the results of local elections which suggest the Conservative Party have avoided a bloodbath.

GBP is the week’s best performing currency with a poor performance by Labour and the Conservatives in local elections likely to spur the two sides towards agreeing a Brexit deal.

The Pound’s advance accelerated late on Friday afternoon following comments from Labour leader Jeremy Corbyn that a deal on leaving the EU must be decided by the UK parliament soon.

The Pound-to-Euro exchange rate is quoted at 1.1751, 0.75% higher while the Pound-to-Dollar exchange rate is quoted at 1.3147, 0.80% higher.

The advance comes as the last of the local election results come through and the final tally suggests the UK’s two largest parties have little to smile about and everything to gain by putting Brexit behind them.

The overwhelming message coming in from both Labour and Conservative party sources, as well as political pundits, is that the electorate are deeply dissatisfied with the handling of Brexit by the two main parties.

At present the Conservatives appear to have lost 951 seats and lost control of 35 councils.

The Labour Party have meanwhile lost 9 councils and 110 seats, poor form for an opposition party that should be mopping up disaffected voters.

Using the vote tallies to project how a General Election might play out, it is estimated that Labour and the Conservatives would each command 28% of the national vote were the patterns repeated in a General Election.

“This is the second time Labour and Conservatives have been below 30%. This is a rejection of both the two largest parties,” says Sir John Curtice, the well-regarded polling expert, responding to the poll projections.

May has set next week as a deadline for the two sides to strike a deal.

Bank Of England Keeps Interest Rates On Hold – Outlook..

The British pound weakened slightly on Thursday after the Bank of England lifted its growth forecasts but warned Brexit continued to cloud the outlook for monetary policy.

The BoE upgraded its forecast for growth in the world’s fifth-largest economy to 1.5 percent, up from the decade-low 1.2 percent it predicted in February.

Policymakers voted unanimously to keep interest rates steady at 0.75 percent as expected, but stuck to their view tighter policy would be needed in future.

Movement in GBP were small as this was expected, with investors saying that recent signs of a possible breakthrough in Brexit talks remained the main driver for the currency.

After the BoE decision, the pound initially broke higher before dropping to a day’s low of 1.3023 against USD, down 0.1 percent on the day. It also weakened to the day’s low against the euro, softening 0.2 percent to 1.1630 pence.

Sterling has traded in a narrow range of $1.28-$1.30 since Britain last month pushed its scheduled departure from the European Union back from March until Oct. 31.

But the currency hit a two-week high on Tuesday and has been nearing $1.31, helped by comments from Prime Minister Theresa May suggesting a rapprochement in talks with the main opposition Labour Party.

The delay of Brexit removed the immediate risk of a disruptive, no-deal British departure which hung over the BoE at its last meeting in March, but extends a period of economic uncertainty.

With Japan out for a week of holidays, traders are worried that the absence of Tokyo, one of the world’s top five currency trading centres, might fuel some exaggerated moves in foreign exchange markets.