The UK’s high streets are heaving with shoppers notwithstanding June's shock vote to abandon the European Union. Moreover, big businesses have already reported few signs of distress, while some tabloid newspapers are discussing a post-Brexit economic boom.
The overwhelming view from financial experts is that it’s too early to know how the United Kingdom will cope with years of Brexit uncertainty, though there’s a soaring belief that the country can avert a recession, which just weeks ago was regarded as probable.
On the face of it, the early upbeat mood contrasts with the pre-referendum warning from ex-Prime Minister David Cameron that Brexit would put a bomb under the British economy.
In August, retail sales reversed much of an immediate post-Brexit vote dip, with retailers posting their strongest sales for six months as industry data revealed on Thursday, mostly due to a weaker sterling attracting overseas buyers.
Japan July consumer prices show the biggest annual fall for three years
In July, Japan's core consumer prices edged down for a fifth straight month and demonstrated the most enormous annual sag for more than three years, as more companies had to hold back price lifts due to poor consumption, thus keeping the major bank under pressure in order to expand an already massive stimulus program.
The gloomy data backs a dominant market view that Japanese premier Shinzo Abe's stimulus programs have turned unable to dislodge the deflationary mindset prevailing among consumers and businesses.
In July, the nationwide core consumer price index, excluding volatile fresh food prices, but including oil products, sagged 0.5% from a year earlier, as government data revealed on Friday. In fact, it exceeded a median market forecast for a 0.4% drop and it turned a bit bigger than a 0.4% tumble in June.
While dropping energy costs were mostly behind the dip in consumer prices, ascends in imported food prices as well as hotel room rates moderated in a clue that poor consumption is discouraging firms from passing on soaring costs.
EconomyVN - At Bitcoin Exchange in Hong Kong (China) nearly 120,000 Bitcoin was stolen, an equivalent of 72 million USD.
72 million dollars Bitcoin stolen in Hong Kong
On 4th of August, at Bitcoin exchanges in Hong Kong nearly 120,000 Bitcoins, or $ 72 million was stolen. This is the second-largest theft of virtual currency Bitcoin in history. Bitcoin value immediately dropped by nearly one quarter after this news. It is not clear whether the theft was caused by hackers.
Japanese stocks fell sharply after the economic stimulus programs of the Central Bank
Tokyo Stock Exchange fell sharply in the trading session of the early week because investors reserved with the economic stimulus programs of Japanese Government. Late last week, Central Bank of Japan announced that they will implement monetary easing by launching extended loan packages of $ 24 billion without accompanying structural reforms. Measures to support Japan's markets were disappointed after Brexit for the financial world.
Bank of England cut interest rates to record low
To deal with Brexit, on 5th of August, Bank of England cut interest rates to a record low of 0.25%. Immediately, the stock is the first field having benefit. At session close on 05/08, in London, the FTSE 100 rose 1.59%. Shares in British banks also rose to its highest level since Brexit, thanks to the stimulus package of quantitative easing.
EconomyVN - on 4th of August, Bank of England (BoE) announced to cut interest rates from 0.5% to 0.25% - it is the first time in 7 years.
Interest rates cut is one of the measures of England to deal with the aftermath of Brexit. So specifically what are package solutions?
Besides cutting interest rates by 25 points%, Bank of England has announced a series of programs to add liquidity support for banks as lending 100 billion pounds, spending 60 billion pounds to buy government bonds and 10 billion pounds to buy corporate bonds.
In a press conference immediately after this action, Governor Mark Carney has made the clearer explanations of the BoE decision. Mr. Carney started with placebo sentence that the UK is fully capable of dealing with the economic changes following the aftermath of Brexit while confirming cutting interest rates and pumping money of Bank of England is the move actively ahead of the situation. But with a series of economic data in recent days as production activities, services and construction are simultaneously reporting the results down, while services - the important position of British economy plummeted, everyone understands that economy is under pressure more clearly from Brexit.
Does Bank of England cut interest rates to negative?
The period of the difficult economy certainly just begins, BoE can do something when their intervention is also close to limit. The members of UK Monetary Policy Committee are unified that they will not bring interest rates to lower 0.
In today's speech, the Governor of the Bank of England is not confident about the prospects of the economy, he said growth will fall very sharply, unemployment will increase and Bank of England will continue to intervene, most likely early next year.
Chain of information shows that the more likely Bank of England will take interest rates to 0.1% in the beginning of next year and just cut to that level, with pumping money, and quantitative easing program. UK Treasury in the short term will also announce fiscal adjustments, the more likely the tax reduction to stimulate consumption and lending activities. The solutions to steer the economy in general have been put on the table, but even so, market predicts UK economic growth in 2017 will be still down 0.8% and the possibility of a recession in the next 18 months is still high as 50%.
According to CNN Money, British pound was devalued 14% against US dollar and 11% against Euro since British voters chose to leave the European Union (EU).
On Tuesday 23/6, the day of the referendum, 1 pound exchanged for $1.5. Currently, only 1 pound exchanged for less than $1.29, the lowest rate in 31 years.
British pound plunge led global investors "restlessness". However, this is good news for those who plan to stay in the UK this summer.
Room prices at 5 star hotel in London's Langham is 300 pounds per night. Brexit, this price is equivalent to 450 USD, now only equivalent to 378 USD - indeed is a lot cheaper.
Buckingham Palace, where Queen Elizabeth II lives in most of the time every year, is open for tourists to visit during the summer. Two tickets to visit Buckingham Palace, the palace reception room, royal carriages and the art collection of the Queen cost 74 pounds.
With the current exchange rate, this equates $95.4. Two weeks ago visitors had to pay 111 USD.
Walking on the streets of London feels comfortable, but when the weather is rainy, the visitors will have to get a taxi. The price of a round trip on the classic black taxis of London costs about 20 pounds, equivalent to $25.8 now, compared to $30 dollars on Friday 23/6.
How about theater tickets? Two tickets for the show "Kinky Boots", one of the most attractive shows in London today, cost 206 USD, 34 USD cheaper than was before Brexit.
And of course restaurant prices in London are also a lot "softer".
A dinner with wine for two people at the senior British style restaurant called Berners Tavern in Fitzrovia post-Brexit with $150. Now, thanks to Brexit, the price of the meal is only 129 USD.
Thus, the depreciation of British pound Brexit has helped travelers for saving a total of 138 USD in 5 categories of expenses mentioned above. This amount is sufficient for afternoon tea party at Ritz luxurious hotel in London.
In the policy meeting in May 6th, 2016, the US Federal Reserve System (Fed) announced all decisions of raising interest rates of US dollar will be delayed until Fed gauges the consequences of leaving European Union (EU) of England. It is the content of the minutes of the Fed's most recent meeting was posted on Wednesday, Reuters quoted.
Specifically, according to the minutes of the Fed meeting results on 14th and 15th of June (before Brexit), Fed officials expressed very worrying psychology about the consequences of Brexit.
"The members of Fed agreed that before thinking of the dollar interest rate adjustments or change of oriented monetary policy, we need more data on the impact of Bexit on economy", Fed officials stressed.
From time of the meeting took place, fears of Fed officials grow over time. On Wednesday, a senior Fed official, Daniel Tarullo, confirmed just not thinking of raising interest rates until inflation in the US reaches a target.
Brexit has made the global financial markets "stunned", in just 1 day after the historic vote in the UK, global stock markets lost $2 trillion.
Until now, the post-Brexit worries are continuing due to that investors expected it takes many years for Britain and EU to be able to reach a consensus on the regulation of the financial sector, trade and immigration.
On Wednesday, government bond yields fell to US record low, many investors believe that at least until 2017, the Fed could raise the base rate of dollar.
"We will take several consecutive months to have positive signs of US economy when it is possible to adjusting new base rate of dollar", chief investment officer at Wells Fargo Funds Fund Management, said Brian Jacobsen, said.
Since Brexit, US dollar has constantly increased, by reaching more than 2% increase compared to the other currencies in basket of major currencies of the world. Dollar rose, this adversely affects US export. After the minutes of the May meeting of the Federal Reserve was published in June 2016, US dollar fell slightly.
Before Brexit, Fed said possibility ofraising interest rates two times in 2016 to prevent US economy from overheating. Since Brexit, many Fed officials repeatedly have warned extreme caution with this decision and it is too early to assess the full impact of Brexit.
Although the US non-manufacturing sector signaled positive but business investment and recruitment activities of the business do not grow respectively.
After Brexit, British pound has depreciated 13% against USD, particularly on Wednesday, the British pound fell by 1%.
Many Britons are seeking to hold citizenship of the European Union (EU), by pouring to the Irish Embassy in London and the post office in Northern Ireland to ask for passport information and sampling declaration application.
Reuters led a diplomatic source said the post office in Northern Ireland were gone declaration form to apply for a passport, while the Irish Embassy in London received more than 4,000 visits per day to inquire about passport, compared with only 200 times in normal days.
As a rule, anyone born in the Republic of Ireland or Northern Ireland, or whose parents or grandparents are Irish may be granted Irish passport. In the UK today there are about 6 million such people. Citizens of Northern Ireland can bring both passports Ireland and British passports.
"After the referendum of England, the number of people interested in Irish passport from Northern Ireland, Great Britain and elsewhere surges" the head of the foreign affairs agencies of the Northern Ireland - Charlie Flanagan said. "Concerns increase clearly, this reflects the worries of some British passport holders of the rights that they have been in his capacity as EU citizens coming to an abrupt end."
Irish Embassy in Paris also received information of a record polling of passport - according Iain McKenney, a native of England who lived in France for 8 years.
"The best news that I have been this morning when they told me, 'Welcome to Ireland'. I will apply immediately, "McKenney, 41 year olds, said. McKenney has British and Canadian passports, but want to keep the status of EU nationals.
In France, there are about 400,000 Britons meet the conditions to become a French citizen. This condition is that they have lived in France for 5 years or more, or a husband or wife is French.
Anne Wilding, a British retirement age of 63, have lived in the village of La Petite France in western Breille 15 years. She said she was British and wanted to keep his citizenship, but likely to apply for a French passport if UK does not achieve a good deal of work out of EU.
Many Britons have lived many years in Belgium and Belgium are applying for passports. The British have spouses who are nationals of other countries in the EU also want to have a passport of these nations.
Many regional authorities in Belgium told Le Soir newspaper that since Friday last week, the staff of the town hall had been "overwhelmed" by a large number of British people to ask for information to apply for a passport.
In London, the city of 8.6 million people is seen as one of the global cities in the world, young people with a majority vote in the EU chose to stay in the UK are considering their options.
"I'm not happy with the outcome of the vote", Miriam Sottile, a 25-year-old teacher whose father is Italian, said. Sottile is planning to apply for a Italian passport. "I think we are Europeans and want to stay in the EU ... I want to get the opportunity as before," Sottile said.