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.

CNBC

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam