After a number of dicey days on the markets, UK shares are regaining some of the ground lost in the wake of the Brexit vote.
The BBC reports that after increasing 2.6 per cent on Tuesday, the FTSE 100 share index opened up 1.6 per cent at 6,240.31. The FTSE 250 index rose 1.6 per cent in early trade. After rising on Tuesday, the pound was little changed against the dollar at $1.3341. Sterling had risen as high as $1.50 before the referendum.
Brexit and businesses
Vodafone has warned it could move its headquarters from the UK depending on the outcome of Britain’s negotiations to leave the European Union. In an email statement, the telecoms company said it was important to retain access to the EU’s free ‘movement of people, capital and goods’.
It was too early to ‘draw any firm conclusions regarding the long-term location for the headquarters’. But Vodafone said that it would ‘take whatever decisions are appropriate’.
Meanwhile, the boss of easyJet boss suggested yesterday that the airline could move its headquarters from Luton in the aftermath the Brexit vote. Carolyn McCall told Channel 4 News that it ‘remains to be seen’ whether the budget carrier would keep its HQ at Luton airport, where it has been based since it was founded in 1995.
The Daily Mail reports that airport and online currency firms are ripping off holidaymakers. In the wake of the Brexit vote, major providers have slashed their exchange rates to as little as €1 to £1 in airports — even though the true rate is around €1.20 to £1.
Online currency brokers are also squeezing customers preparing to jet off this summer, the paper says. The gap between the official exchange rate and the paltry deals paid to holidaymakers shopping around on the internet has doubled at some firms.
Thisismoney reports that half of Britons intend to put aside more money each month as they fear Brexit will have a negative impact on the economy and their finances, according to a new survey.
Some 37 per cent also said they will cut spending on holidays, home improvements or big ticket items like TVs and furniture that they had intended to spend on before the results of the referendum, economics research consultancy Retail Economics said. The survey of more than 2,000 people carried out last Saturday – one day after the EU referendum results – comes as economists and many British companies have expressed fears Brexit would further hit consumer confidence.
According to The Guardian, British retail sales slowed in the run-up to the EU referendum. The Confederation of British Industry’s latest snapshot of the retail sector was conducted between 26 May and 14 June – before the UK’s vote to leave the EU.
Grocers, furniture and carpet shops, along with hardware and DIY stores, reported a pick-up in sales in the year to June. But growth slowed at clothing retailers and sales fell at department stores, specialist food and drink retailers, and shops selling durable household goods such as cookers and washing machines.
The annual rate of house price growth increased slightly in June, according to the Nationwide. The building society said the rate rose to 5.1 per cent, up from a pace of 4.7 per cent seen in May.
Prices rose 0.2 per cent between June and May, the Nationwide said, lifting the average property price to £204,968. Nationwide said it was difficult to assess underlying levels of demand for housing given the impact of changes to stamp duty earlier this year.
In other housing news, the latest Hometrack UK Cities House Price Index reveals that Bristol has become the first city outside of the South East to see house prices rise at a faster rate than London for more than six years.
Year-on-year house price inflation in Bristol reached 14.1 per cent in May as it surpassed London (13.8 per cent) and Cambridge (13.4 per cent) to top the Index. Overall city level house price inflation rose from 10.8 per cent in April to 11.2 per cent in May.
Hometrack expects to see a rapid deceleration in house price growth throughout the remainder of 2016, particularly in London, as buyers adopt a wait and see approach to assess the short term impact on financial markets and the economy at large in the wake of the EU vote.
Research from Moneyfacts.co.uk reveals that average ISA rates, and in some cases best buy deals, have halved since the Funding for Lending scheme (FLS) launched in 2012. In addition, since the introduction of the Personal Savings Allowance in April 2016, ISA rates have continued to plummet.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: ‘It’s clear that the FLS has had a huge impact on the savings market over the last four years, but tax efficient initiatives launched by the Government may also have also resulted in ISA interest falling to record lows. Before the FLS launched savers could get an easy access ISA paying 3.30 per cent, but now the best deal on the market pays just 1.30 per cent.
‘Since the Personal Savings Allowance launched in April, we have seen significant cuts across ISAs, with some providers offering better deals on their taxable accounts than their ISA counterparts. It’s therefore fair to assume that this new allowance has reduced the appeal of ISAs, and has subsequently reduced their competitiveness yet further.’