What does Boris Johnson mean for Bankers?

6 months ago #Event

The election of the new British prime minister stirred up many strong opinions of all different sorts. What is being said in the financial world?

Johnson claims to be on the side of investment banking - stating that he has big players as hedge fund backers - while simultaneously pushing for Brexit with no withdrawal agreement. How can he be good for the financial sector?

Westminster was fixated on Boris’ first speech since his conservative victory, but another important speech was taking place in Scunthorpe, where Andy Haldane (chief economist of the Bank of England) spoke about employment and Brexit.

Haldane’s argument in terms of Brexit is that the major negative risk to the UK in the approaching years would affect the economy by reducing the capacity of businesses to create revenue and thus employment and wage growth. He predicts disruptions in supply chain as Brexit would make firms less attractive for investment.

How does this relate to Boris?

James Kirk of The Spectator analysed the speech of Haldane and concluded that ultimately, Haldane’s speech was a warning that the new Prime Minister cannot rely on the Bank to soften the harsh blow of a hard Brexit. Kirk states that he cannot tell exactly what this may mean for the relationship between bankers and the Boris Johnson government, but warns that the relationship will be worthy of more attention than it is currently getting.

Boris will appoint a new governor of the bank shortly; a decision which will help to steer the direction of this relationship.

Keep up with important financial news on James Woodman’s blog and LinkedIn page.