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Thursday's Business and Politics round-up

25 May 2017
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FT - City chiefs resist Tories' anti-business sentiment

Good morning,

The investigation of Manchester bombing continues, with eight men now in custody following the attack. Theresa May will today raise concerns with Donald Trump over leaked photos appearing to show debris from the attack, which were published in the New York Times. Home Secretary Amber Rudd said she was 'irritated' by the disclosure of the images and had warned Washington 'it should not happen again.'

Mrs May and the US President are due to meet later today at a Nato Summit in Sicily.

Buckingham palace has confirmed there will be a minute's of silence at 11:00 BST today to honour the victims of the suicide bombing.

Campaigns to resume

Political parties are set to resume national election campaigns tomorrow, with local campains resuming today.

Meanwhile, UKIP will publish their election manifesto later today. UKIP leader Paul Nutall said 'everyone was horrified by the horrific events that took place in Manchester' and it had been 'right and proper' for the political parties to suspend their election campaigns 'for a short period as a mark of respect to those who lost their lives or suffered appalling injuries.'

'But we cannot be cowed or allow our way of life to be undermined by those who wish to do us harm,' commented Mr Nutall. 'These people hate the way we live, hate our freedom and hate our democracy.  The best response we can make is to ensure that the democratic process continues and therefore I have decided that we must to go ahead with the launch of the UKIP general election manifesto tomorrow.' UKIP's decision is expected to prove controversial, as the press conference is scheduled to start half an hour before one minute's silence to remember the victims, reports the Telegraph.

The election campaign remained suspended yesterday and Mrs May and Mr Corbyn said they were in regular contact about the situation.

Announcing Labour's plans to resume the campaign, Mr Corbyn said, 'Resuming democratic debate and campaigning is an essential mark of the country's determination to defend our democracy and the unity that the terrorists have sought to attack.'

A Conservative source reportedly confirmed that there will be no delay to the date of the general election.

Strong and stable eurozone

Brexit poses little risk to the financial stability in the eurozone, the European Central Bank (ECB) said yesterday. Playing down the threats that a punitive deal for the City of London would backfire on the EU, the ECB commented that they remain optimistic about the consequences.

The latest ECB's periodic report on financial stability showed that 15% of eurozone securities are issued in the UK, while between 35 per cent and 40 per cent of public offerings and debt issuance is underwritten in this country. It nevertheless concluded that the threat of European companies becoming restricted when trying to access wholesale and retail financial services was low, stating that some companies would continue to be supplied from the UK, while others 'will be provided by EU-domiciled entities instead.'

Brexit 'should not have significant financial stability implications, especially if adequate preparations are made,' said Vitor Constâncio, the ECB's vice-president. 'The point is that of course Brexit is very significant for the UK, but in view of the relative size it is much less meaningful for the rest of the EU,' he added.

However, the ECB warned that companies should still prepare and remain alert, 'Brexit could create disruptions. Well-managed preparations will be essential, as a relocation of financial services capacity during the transition could face frictions.'

Bank of England's governor Mark Carney commented in January that the cost of finance would soar if the EU chose to punish the City. 'I am not saying there are not financial stability risks in the UK... but there are greater short-term risks on the Continent in the transition than there are in the UK,' he said.

Formal Brexit talks are set to begin on 19 June.

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