UK: Fresh Threat of Blue-Chip Exit

In a speech Monday at his party’s annual conference George Osborne, the U.K.’s Chancellor of the Exchequer, pledged to the country’s businesses to “go on cutting your taxes to the lowest rates of any major economy in the world.”

“In return, you have to do more to train your workforce and to pay higher wages,” he added, in a speech many interpreted as his pitch to be Prime Minister when David Cameron leaves office.

But might red tape and increased ease of movement threaten the country’s status and push large-cap multi-national companies out of the U.K.?

Prudential is the latest U.K. financial services company whose London headquarters are in the spotlight. The insurer, which has a growing Asian business but maintains around one-fifth of its business in the U.K., would say only that “we regularly look at the structure of our business” when asked about a report in the Sunday Times that it is considering moving.

It will face tougher capital requirements which could limit its ability to make different kinds of investments, under European Union rules known as the Solvency II rules, from next year.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.