Photographer: Simon Dawson/Bloomberg

Brexit Bulletin: More Doubts Over Banks’ EU Access

Portugal joins the list of countries casting doubt on banks' future EU access, while consumers bounce back

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Portugal joined the list yesterday 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 U.K.-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’s Joao Lima. “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.” Sweden also weighed in today, saying Britain can't expect to cherry-pick as it negotiations its exit.

The four freedoms need to be respected,  according to Karolina Ekholm, a state secretary at the Swedish Finance Ministry and a former central bank deputy governor.  

Consumers’ Mood

While the Brexit vote initially knocked consumer sentiment, confidence has bounced back this month, Bloomberg’s Fergal O’Brien reports. 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. That’s the conclusion of a story by Bloomberg’s Jill Ward, reporting from Hartlepool in northeast England. This quote sums it up:

“Brexit won’t make no difference to us,” says Sharon Marshall, 53, a Brexit voter who is struggling to find a job. “It might on holidays, but who can afford to go on holiday?”

And Clive Crook, of Bloomberg View, ponders “the unthinkable” in his column on Brexit and Europe today.

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, Bloomberg’s Justin Villamil reports. Weakness in the pound has boosted the U.K. index by more than 7.5 percent since then, while the European measure has fallen 1.7 percent.

On the Markets 

The pound headed for its first weekly gain against the euro since mid-July as economic data continue to defy post-Brexit expectations for a slowdown. European stocks were little changed


And Finally...

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

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