BREXIT - Round up

TOURISM FUNDING ANNOUNCED

The prime minister has announced a £40 million funding boost to support the country's tourism after the Brexit vote.

New schemes will be unveiled to attract more visitors to the UK, including relaxing licensing laws to allow B&Bs to offer welcom drinks to guests and pickups from train stations.

Funding is scheduled for projects and businesses in different geographic areas with the aim to improve tourism outside of London.

CHANCELLOR GUARANTEES EU FUNDING

Chancellor Philip Hammond has guaranteed EU funding and supoort for businesses and universities, and has encouraged organisations to continue competing for EU funds while the country remaines in the EU.

Structural and investment projects agreed before and after the autumn statement will be funded while the Treasury will underwrite the payments for EU funding projects, even after the country's departure from the EU.

The Chancellor, said:
"We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities."

HOUSING MARKET STEADY AFTER BREXIT

According to figures by HMRC, the housing market remained steady in the first full month after Brexit.

The number of residential property transactions fell by 0.9% between June 2016 and July 2016 while non-residential transactions in July were 0.7% higher compared to June.

A total of 94,550 homes were bought, compared to 95,430 sold.

INTEREST RATE CUT: REACTION

The Bank of England has cut interest rates for the first time in 7 years.

Reacting to the UK's decision to leave the EU, the Bank announced a range of measures:

• official interest rates have been cut to 0.25%
• extending the quantitative easing programme by a further £60 billion (bringing a total of £435 billion)
• £10 billion in corporate bonds purchases
• a new term funding scheme that will see the Bank create money to provide loans to banks.

The 2017 growth forecast for the UK was also downgraded from 2.3% to 0.8%

Bank of England governor Mark Carney used his speech after the announcement to make it clear that he thought there was "no excuse" for banks not to pass no lower borrowing costs to customers. They will be charged penalties for failing to do so.

Major business and industry bodies reacted to the Bank's decision:

Dr. Rebacca Harding, chief economist at the British Banker's Association, said the measures sent a "clear signal" that the Bank was taking a "whatever it takes" approach to the economy:

"Weak post-Brexit data is creating a perception that the economy is likely to slow and the decision to reduce rates has been made on the basis of a perception of risk."

Darren Bustin, head of derivatives at Royal London Asset Management, said:

"ONce casualty of today will be pension schemes whose deficit is likely to got worse rather than better.  It will also be a wait and see in regard to banks and their profitability."

Yvonne Braun, director of policy at the Association of British Insurers, said:

"Today's decision will bedisappointing news for customers looking to buy an annuity.[...] This further drop of the interest rate to unprecedented low levels and the additional injection of quantitative easing are likely to put downward pressure on annuity rates."

Rain Newton-smith, chief economist at the Confederation of British Industry, said the Bank had "rightly prioritised growth" in response to the economic uncertainty following the EU referendum result:

"With interest rates once again at record lows, expansionary fiscal policy can do more to shore up business and consumer confidence, and put the UK on a atronger growth path for the furture."