Article by ForexTime
Looking to avoid negative impacts on global economic growth, as warned by the IMF, and manage the economic and political uncertainty associated with the Brexit, European leaders continue to urge the UK to begin the exit procedure sooner rather than later.
Although markets have shown cautious signs of recovery following lows on Friday, and policymakers are promising to protect their economies, investors remain uncertain and unconvinced; unsurprisingly so, considering the value of global shares dropped by $3 trillion overnight.
The UK has now been downgraded by three major credit rating agencies and businesses are predicting job cuts and hiring freezes. George Osborne, Finance Minister of the UK, additionally announced on Tuesday that attempts to stabilize the economy would involve raising taxes and cutting government spending.
The City of London is also experiencing blows, with claims from the German financial market regulator that it can no longer remain a euro trading hub, nor continue to host the headquarters of a planned European stock exchange.
At the EU summit on Tuesday, British PM David Cameron expressed hope that Britain would retain its tight economic relationship with the EU but was reminded that access to the prized single market was inextricably linked to the EU’s four freedoms of movement: goods, capital, workers and services.
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Scotland remains unsatisfied, with a two third majority voting to stay in the EU, and there is talk of a new referendum. Scottish First Minister Nicola Sturgeon will be visiting Brussels this week.
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