UK Chancellor Rishi Sunak today delivered a series of new measures and extensions to existing supports to help the UK economy through the winter months following the re-emergence of the coronavirus and re-imposition of wider restrictions on activity.
Caixabank Research | In recent years, purchases by foreigners have been fundamental in boosting Spain’s real estate sector, especially in large cities and tourist areas. In 2019, foreigners bought almost 63,000 homes in Spain, accounting for 12.5% of total purchases according to the College of Registrars. We can observe that Q1 sales to foreigners totalled 14,850, down by 6.4% year-on-year. The decline in property purchases by UK citizens (–14%) is particularly large.
Boris Johnson’s government will impose a 14-day quarantine on travellers from Spain in response to the surge in reported Covid-19 cases in our country. This decision has fuelled discontent both in the Spanish government and in the tourism sector. This means about 12% of GDP, with the British accounting for 20% of all tourists. Furthermore, the Spanish industry could lose foreign tourism revenues of €8.7 Bn between August and September, reports the Spanish tourist institution Exceltur.
Intermoney | As the pandemic has eased in Europe, long-standing problems have returned to the forefront, one of which is the ever-present Brexit. According to the FT, there is greater willingness to bring positions closer together, so that there would be a breakthrough in the negotiations from 29 June, However, the conflictive issues remain and include: the UK’s demand to hold on to the access to its fishing waters, the disagreements over how to create a regulatory playing field to protect companies from unfair competition. There is also Brussels’ desire to wrap up all the parts of a future relationship into a single legal agreement.
Iberdrola plans to participate in the renewable energy auction the United Kingdom is preparing for next year. The Spanish power company will submit its East Anglia offshore wind project in the upcoming auction call to try to win one of the contracts for differences (CfD). The project will require an investment of close to 7.6 billion euros.
Telefónica has finally reached an agreement with Liberty Global to merge its UK businesses, O2 Holdings and Virgin Media UK respectively, and form a 50/50 joint venture. The merger would make the new group the UK market leader with a 34% market share compared to BT’s 32%. This integration is the largest transaction in Telefónica’s history. Whatsmore, it will always be remembered for having happened in the midst of the restrictions determined by the confinement in the two countries.
David Page (Head of Macro Research at AXA Investment Managers) | The Bank of England (BoE) today announced its monetary policy decision for May. It left the Bank Rate unchanged at 0.10% as widely expected, by unanimous vote. It also left QE unchanged, leaving the Asset Purchase Facility target unchanged at £645bn. This was in line with the median consensus forecast, but we had expected a £100bn increase in QE today as the current programme is set to expire in early July. This was by split decision, with two members voting for an immediate £100bn increase. The majority of the Committee decided to wait for “more information… that was likely to become available over the coming weeks”, but these members “all” acknowledged prospective weakness in the economy and downside risks to the medium term outlook “might necessitate further monetary policy action to support the economy in the future”. We fully expect the MPC to increase QE, probably by £100bn at its next meeting on 18 June.
The company acknowledges that it is in the process of negotiating with Liberty Global for a possible integration of its assets in the UK, but there is no guarantee this will be successful or that the final terms will be met. Liberty Global offers pay television, broadband and telephony services in the UK through the Virgin Media brand. In addition, it has a mobile virtual operator or MVNO based on British Telecom’s network that expires at the end of 2021 (which would have already negotiated a switch to Vodafone).
Tristán de Borbón (London) | On March 2 the British government started to negotiate a free trade agreement with the EU… and to set out its goals for an agreement with the USA. A strategy that puzzles analysts.
Peter Isackson | Until January 31 of this year, there was both a tunnel linking Britain to the continent and a powerful (metaphorical) bridge called the European Union. Now the tunnel is all that connects England and Europe. Johnson’s engineers are hard at work dismantling that symbolic bridge, which may explain why Boris feels the still-united kingdom needs a new physical bridge — a symbol to replace a symbol.