World Economy

More Doubts About UK Banks’ EU Access

Shares in UK banks are standing at a post-referendum high.Shares in UK banks are standing at a post-referendum high.

Portugal joined the list Thursday of European countries casting doubt on Britain’s ambition of keeping single-market access for its banks when it leaves the bloc.

Secretary of State for European Affairs Margarida Marques signaled that UK-based banks hoping to keep so-called passporting rights may instead end up with a status more like that of Swiss lenders. Their future will be “dependent on the model of relationship that the United Kingdom intends to keep with the EU,” she said in an e-mailed response to questions from Bloomberg. “For example, Swiss companies don’t have a financial passport and have to resort to subsidiaries” in the EU to do business there.

That chimed with the view of German lawmaker Michael Fuchs, an ally of Chancellor Angela Merkel, who said on Tuesday that EU passporting rules are “not negotiable.”

  Consumers’ Mood

While the Brexit vote initially knocked consumer sentiment, confidence has bounced back this month. A consumer sentiment index by YouGov and the CEBR rose the most in more than three years in August, rebounding from a three-year low in July.

“For all the talk of doom and gloom—both in the months leading up to the referendum and in the days following it—most consumers have yet to feel much tangible impact of the vote,” said Stephen Harmston, head of reports at YouGov. “It’s clear that the panic that gripped the public in the immediate aftermath of the referendum has subsided as institutions like the Bank of England take decisive action and the result becomes a part of life.”

Meanwhile, for some in Britain, Brexit changes nothing.

  Brexit Divergence

The FTSE 100 Index and the Euro Stoxx 50 Index tend to move in lockstep, but their correlation has slipped since the referendum to the lowest in more than a year. Weakness in the pound has boosted the UK index by more than 7.5% since then, while the European measure has fallen 1.7%.

Another report says, all four of the FTSE 100-listed banks—Barclays, RBS, HSBC and Lloyds - are at their highest level since the post-vote route. The sector has been on a mini-rally over the summer, with shares in Barclays and Lloyds both up by more than 10 per cent so far in August.

Some data at last on how the post-Brexit slide in the pound boosted sales of luxury goods. Tiffany, the US jeweler famous for its diamond rings in turquoise boxes, said yesterday it had seen an increase in UK sales after the referendum.