News in brief: Brexit, mobile, money transfers

News in brief
News in brief

Brexit presents unknown risks to exporters

The Bank of England’s deputy governor, Andrew Bailey, has told a Treasury committee that the Bank’s first priority following a potential Brexit vote would be to keep financial markets stable and manage the impact on the British economy.

However, ReesRussell partner Jonathan Russell was keen to point out that the Bank of England talk about managing the market impact of Brexit, but it does not say that it is necessarily a negative impact. He explained: “It does highlight that there needs to be considerably more flesh on the bones of the proposed ‘deal’ to understand the extent of the relaxation of EU controls over London’s financial markets, whilst also highlighting the Norway arrangement, which many politicians seem to see as the alternative, as being an arrangement with all the disadvantages of full membership without the advantages.”

Whittingham Riddell tax partner Duncan Montgomery warned that “this may not be an easy ride for many” and pointed out the risk to many UK exporters is the referendum hiatus.

He said:We are expecting major spending and commitment decisions to be put on hold, for at least a quarter while the vote unfolds. On a Brexit that is likely to continue for another six months or more while the details are worked out.

“Business supplying capital goods, infrastructure and items that are serious commitments from their customers need to be prepared for that slowdown and must be ready to respond appropriately.”

Worldwide mobile money transfers on the rise

Analysis by Xpress Money suggests that cashpoint usage will decline as money transfer services via corner stores and smartphone apps enable consumers to access cash wherever they are.

The money transfer market has exploded in recent years. Annual non-bank transfers of cash amount to around £400 billion globally or £54 per head for every person on the planet – the equivalent of each person transferring one pound per week. Recent findings from Juniper Research found the number of mobile money transfers was set to increase by 150% in 2015 to more than 15 billion. Innovation is driving the global remittance market with new mobile platforms delivering convenient and secure methods of transfer via social channels.

Xpress Money COO Sudhesh Giriyan said: “At their peak there were just over 80,000 phone boxes in the UK – and today there are around 70,000 ATMs nationwide. The dynamics are similar. Phone boxes and ATMs offer a location-based transaction. Today, though, only 3% of the population use phone boxes – and our assumption, over time, is that the same decline in use will apply to ATMs as consumers become more accustomed to the use of money transfer services via their corner store or via an app.”