Brexit: Five things we learnt this week
A round up of this week's biggest Brexit news.
1. Microsoft’s post-referendum price rise
Microsoft announced this week that it would be raising prices across its product range in the UK by as much as 22%.
The tech giant says that the hike is in response to the recent fall in the value of the pound.
The move is likely to cost business and the Government tens of millions of pounds.
Customers of Microsoft Enterprise will see prices for computer software by 13% and 22% for online services, including cloud based storage solutions.
The announcement comes after the so-called “Marmitegate” disagreement, when goods supplier Unilever and supermarket chain Tesco entered a stand-off over a 10% rise in price on products such as Marmite and Hellman’s mayonnaise.
Source: The Telegraph
2. Could London lose its FinTech crown?
Over recent years, London has been consistently voted as the best place for FinTech start-up to set up shop.
However, new research shows that the Brexit vote, and the economic uncertainty that surrounds it, may have innovators looking to pastures new.
There are the well-known global business and tech hubs like New York and San Francisco, but the high cost of living in those cities coupled with the strong competition that have already claimed their turf may put off some of the newer and smaller start-ups.
We look at some potential destinations which could be on track to giving London a run for its money as the world’s number one FinTech hub.
Source: CA Today
3. Economists warn of £84 billion black hole in public finances
The Chancellor could face an £84 billion black hole in the Autumn Statement unless he presses the “fiscal reset button”, senior economists have warned.
The Resolution Foundation think tank found that unless Philip Hammond gets rid of George Osborne’s economic rules, the economic outlook following the EU referendum result “will lead to deterioration in public finances”, said Matt Whittaker, chief economist at the Resolution Foundation.
Matt continued: “Rather than announcing very significant further tax rises or spending cuts in the face of renewed economic headwinds, the Chancellor is right therefore to press the fiscal reset button and set a new economic course for the remainder of the parliament.”
Source: The Independent
4. Government told not to ignore the needs of small businesses
Shadow Chancellor John McDonnell has warned the government not to carry out a “bankers’ Brexit”, where the interests of big businesses are put first to the detriment of small businesses and manufacturers.
In a speech to the Institution of Mechanical Engineers, Mr McDonnell said he believes the government wants to turn the UK into the “Singapore of the North Atlantic” by offering “low taxes for the few. He went on to say that if this happened, it would be “at the expense of the rest of the overall economy”.
In response to Mr McDonnell’s comments, David Gauke, chief secretary to the Treasury, said: “The Conservative Party will deliver the right deal for the whole United Kingdom as we leave the EU and build an economy that works for everyone here at home."
Source: BBC News
5. UK economy performs better than expected post-Brexit
Data released by the Office for National Statistics (ONS) show that the GDP growth fell from 0.7% in the previous quarter to 0.5% this quarter.
The figures fly in the face of City forecasts which had predicted growth would fall to 0.3%.
A strong service sector kept the economy from falling into a recession with transport, storage and communication.
However, a contraction in the agriculture, construction and manufacturing sectors has seen business groups putting pressure on the Chancellor to use next month’s Autumn Statement to boost investment and productivity.
Source: The Guardian