More News » 5 Things that mattered 22/10/18

5 Things that mattered 22/10/18

A round up of the biggest events of the week affecting finance directors, from Brexit to Saudi Arabia.

Warnings on Brexit

Leading economic forecaster the EY Item Club predicts the UK economy is heading for its worst year in almost a decade amid the growing risks from no-deal Brexit.

Item Club said the economy would struggle to recover in the final months of the year owing to the increasing likelihood of Britain crashing out of the EU in less than six months’ time.

Meanwhile, vehicle manufacturer Ford’s European boss says a no-deal Brexit “would be pretty disastrous” for British industry and could affect the company’s future in the UK.

Steven Armstrong says is “still confident” a tariff-free frictionless trade deal would be done, but adds a no-deal outcome would “force us to think about what our future investment strategy for the UK would be”.

GT’s boss steps down

Sacha Romanovitch, the first UK female chief executive of a major City accountancy firm, says she will step down from Grant Thornton by the end of this year.

The firm says Romanovitch would leave her job once a successor was identified.

“Following discussions with Sacha, the board has agreed that a new CEO is the logical next step to create long-term sustainable profits for the firm,” says Ed Warner, independent chair of Grant Thornton UK’s partnership oversight board.

Leaders pull out of Saudi conference

US Treasury Secretary Steven Mnuchin and UK International Trade Secretary Liam Fox pull out of an investment conference in Saudi Arabia amid allegations the country was behind the killing of Saudi journalist Jamal Khashoggi.

Many business leaders also choose to avoid the event. The issue puts the spotlight on companies such as British defence giant BAE Systems, which receives a sixth of all its revenues from Saudi Arabia.

Earlier this year, the UK signed a letter of intent to supply Saudi Arabia with BAE-built Typhoon aircraft to replace Tornados going out of service in the next decade.

Bank of England raises debt fears

The Bank of England has issued a stark warning over the rapid growth in lending to indebted companies around the world, drawing parallels with the US sub-prime mortgage market that triggered the 2008 financial crisis.

Shadow chancellor interviewed

Shadow chancellor John McDonnell is interviewed by Financial Director. He offers his views on building the economy, Brexit, employee share schemes, nationalisation, banks, audit, corporate taxation, climate change and arms sales to Saudi Arabia.

When asked for his vision of Britain’s value creating future, the shadow chancellor insists that he and his party offer certainty in the face of Brexit. By remaining within a customs union, and having a close working relationship with the Single Market, he says “we can plan for the long term for our economy of our economy on the basis of frictionless, tariff-free trade”.

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