bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 24.02.2018 | Name days: Diāna, Dina, Dins

Swedbank: it will no longer be simple to move to the UK in the event of Brexit

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe UK will remain in the European Union, predict Swedbank economists. The possibility of UK leaving the EU, or Brexit, is given a 40% probability. Brexit would result in a negative impact on Baltic States and Eurozone in general. This impact will be expressed by more serious fluctuations on financial markets, trade obstacles and political instability in Europe.

This would also mean more uncertainty for the monetary policy and slower economic growth in Baltic States and Eurozone, as concluded in Swedbank’s latest thematic outlook.

If the UK remains in the European Union, there will be a positive rebound in stock prices and value of the British pound after the 23 June referendum. The current exchange rate for GBP is close to EUR 0.0785. It may become weaker in the next month. Swedbank economists predict that the value may grow to EUR 0.75 after the referendum. It is possible the Bank of England may raise the base rate in Q1 2017.

Swedbank estimates the probability of Brexit at 40%. Results of the most recent Financial Times survey show that 46% of British residents are in favour of their country remaining in the EU. 43% are in favour of it leaving the union. 10% of residents are unsure how to vote.

In the event of Brexit, both the UK and the EU would become politically and economically weaker. Estimates of different institutions show that negative influence on UK’s GDP could be within 0.1-0.9 percentage points in the event of Brexit, comments Swedbank Latvia head economist Martins Kazaks.

Negative influence on Eurozone and Baltic States may be indirect and significantly smaller in comparison. It will be felt through stress on financial markets. The effect will be felt mainly in short-term perspective – large fluctuations, weaker GBP, possible decline in stock prices and bond yield. In impact on Baltic States will be similar to Eurozone, even lower, considering very low debt levels. It is expected that the value of GBP will drop by at least 5% in comparison to USD. It is also possible that GBP may become weaker in comparison to EUR. In a medium-term perspective (if impact on Eurozone’s economy turns out considerable) the European Central Bank may decide on putting off stimulating measures and raising rates to a later date, thereby retaining the negative interest rates and increasing asset bubble risks, the economist explains.

He adds that Baltic States export 3-5% of all their goods to the UK (Latvia exports around 5%). The British market is especially important to industries like woodworking and mechanical engineering. If GBP becomes weaker than EUR, export flow to the UK may reduce as well. Nevertheless, negative impact in general is expected to be rather limited. At the same time, however, the slower the growth becomes in the UK, the weaker demand for Baltic goods and services there will be.

«Political consequences will likely have the largest negative impact – more challenging cooperation inside the EU and more politically fractured Europe in general, larger possibility for radical/populist political powers to increase their influence, the necessity to put off structural reforms, larger geopolitical uncertainty, etc. We may see similar referendums in other EU member states, which could increase uncertainty even more. These consequences will definitely impact Baltic States, slowing their economic growth,» – adds Kazaks.

Ref: 102.109.109.5672


Leave a reply

Baltic States ask European Commission to maintain EU Cohesion Fund financially strong

Baltic finance minister ask the European Commission to keep the European Union’s Cohesion Policy financially strong and aim it towards results, BNN was told by Finance Ministry.

Police commence investigation on possible money laundering schemes at ABLV Bank

Latvia’s State Police has commenced an investigation about the possible money laundering operations at ABLV Bank, which were reported by Financial Crimes Enforcement Network (FinCEN) US Department of Treasury.

S&P Global affirms Latvia’s credit rating at «A-»

On Thursday, 22 February, S&P Global reaffirmed Latvia’s credit rating on the «A-» level, retaining a positive outlook for the future, as BNN was informed by the State Treasury.

Kristovskis: state officials should be equally strict to Lembergs and Rimšēvičs

«Lack of consistency – such a conclusion appears after looking at the behaviour of state officials in regards to their request for Ilmārs Rimšēvičs’ to step down as governor of the Bank of Latvia,» says Ventspils City Council member Ģirts Valdis Kristovskis.

LSRTC: Zaķusala TV Tower’s reconstruction will cost several dozen million euros

According to chairman of Latvia’s State Radio and Television Centre (LSRTC) Jānis Bokta, reconstruction of Zaķusala TV Tower will cost several dozen million euros.

Trade union worried teachers may not have time to prepare for new education content

Teachers may not have enough time to prepare to work with new education content, said manager of Latvian Education and Science Workers' Union Inga Vanaga in an interview to Rīta Panorāma programme of LTV.

Judins, Loskutovs, Čigāne and Dālderis to continue working in Unity’s faction

Saeima members Andrejs Judins, Aleksejs Loskutovs, Lolita Čigāne and Ints Dālderis will continue working in Unity’s faction and coalition.

Saeima supports member’s proposal to publish wages of Bank of Latvia employees

Latvia’s parliament has decided to support Ints Dālderis’ proposal to publish wages paid to employees of the Bank of Latvia, education institutions, as well as municipal capital associations.

More snow expected on weekends; air temperature to drop even more next week

On the night to Friday, 23 February, air temperature in most of Latvia declined to -21° C… -27° C. It was only warmer in Kurzeme and some parts of Vidzeme, as reported by Latvia’s State Environment, Geology and Meteorology Centre.

SEB Bank: more employment options will open up and workers will become more selective

«It is becoming easier to change jobs nowadays. The largest selection of employment options are found in regional centres and cities, especially Riga and Pieriga. We see fewer employment options in regions even though there is still considerable demand for workers there,» predicts SEB Bank’s macroeconomics expert Dainis Gašpuitis.

ABLV Bank’s manager claims the bank is ready for cancellation of payment restrictions

ABLV Bank is ready for cancellation of payment restrictions, said the bank’s chairman Ernests Bernis during a press-conference on Thursday, 22 February.

62.9% of Latvia’s population was employed in 2017

Compared to the year before, in 2017 employment rate grew by 1.3 percentage points and number of employed persons by 1.5 thousand. Employment rate among men grew faster than among women – by 1.6 percentage points and 1.0 percentage points, respectively. 894.8 thousand people or 62.9 % of Latvia population aged 15–74 were employed in 2017.

Lithuania and Latvia: the tale between two sisters marked with rivalry

Relations between Lithuania and Latvia, two tight-knit Baltic neighbours, may exemplify a sisterly relationship from the first sight, but just over the course of a single week, several pings rang, signalling that rivalry is, and has always been, a component of coexistence.

Lembergs unable to organize his private life because of intense court proceedings

Lembergs unable to organize his private life because of intense court proceedings

Unemployment level in Latvia decreased to 8.7% in 2017

85.4 thousand people aged 15–74 in Latvia were unemployed in 2017. Compared to 2016, the number of unemployed persons has dropped by 9.9 thousand or 10.4 %.

Council member: ECB is openly dissatisfied with restrictions imposed on Rimšēvičs

The European Central Bank (ECB) is openly dissatisfied with restrictions imposed on one of its council members – governor of the Bank of Latvia Ilmārs Rimšēvičs, said council member of the Bank of Latvia Edvards Kušners in an interview to 900 seconds programme of LNT.

Defence expenditures in Latvia planned at EUR 234 million in 2018

Latvian government plans to spend EUR 234 million on defence projects, including procurement of transports, ammunition, armaments and individual equipment, in 2018 as confirmed by Defence Ministry.

Ministry cancels mandatory procurement component permits for five CHP plants

Latvia’s Economy Ministry has made a decision to cancel the permit to sell electricity within mandatory procurement component for five other renewable energy co-generation plants plants: SIA Madonas Eko, SIA Eiro-Āzijas investment agency, SIA EVOKEM, SIA M Parks, and SIA Eco Latvis.

NSC proposes Maizītis for a second term as Chief of Constitution Protection Bureau

Members of Latvia’s National Security Council have decided to propose the current head of the Constitution Protection Bureau Jānis Maizītis for another term at the helm of this institution, as BNN was informed by the State President’s Chancellery.

Latvijas gāze’s subsidiary Gaso proposes reducing gas transmission price

Latvijas gāze’s subsidiary Gase has turned to Public Utilities Commission with a proposal for a new natural gas transmission system service’s tariff project, providing for a reducing gas transmission price by 18-46% for more than 95% gas consumers.

FCMC invites Bank of Latvia to provide ABLV Bank with yet another emergency loan

The Finance and Capital Market Commission (FCMC) has invited the Bank of Latvia to issue ABLV Bank another emergency loan.

Crime rate in 2017 was the lowest in Latvia’s history

Last year’s crime rate turned out the lowest in Latvia’s history, as reported by Prosecutor General Ēriks Kalnmeiers in his annual report.

LEC: government priorities should include searching for causes and solutions, not the guilty

Latvian Employers’ Confederation (LEC) is worried about ongoing events and their negative effect on the stability and future development of the country’s economy. LEC believes that stabilization of the financial situation requires careful coordination of actions between institutions and the government.

Producer price level in Latvia grew 0.9% in January

Compared to December 2017, level of producer prices in Latvian industry rose by 0.9 % in January 2018. Prices of products sold on the domestic market went up by 1.2 % and prices of exported products by 0.6 %.

Latvian President believes country’s financial system is stable; prime minister plans to report to European Council

«Latvia’s financial system is stable, and there is no reason to worry about possible instability of the banking system. Banks continue working as usual,» says the President of Latvia Raimonds Vējonis.