Seven days in the Square Mile

Outlining a financial framework to tackle short-term uncertainty, the governor of the Bank of England, Mark Carney, hinted at an imminent interest-rate cut and raised the prospect of further quantitative easing. Carney warned that the financial risks of Brexit “have begun to crystallise”. The Bank eased its capital requirements on banks, urging them to continue offering loans. The Chancellor abandoned his fiscal target to eradicate the deficit by 2020. He also slashed corporation tax to 15% as part of a “five-point plan” to restore investor confidence and galvanise the economy. The FTSE 100 recorded its strongest weekly gain in five years, but sterling fell to a new low of $1.28. Market anxiety centred on the commercial property and construction sectors. PMI figures, suggesting shrinking activity before the referendum, further pressured housebuilders’ shares. Three big commercial property funds suspended redemptions following an investor exodus. Shareholders in the London Stock Exchange backed the £21bn merger with Deutsche Börse, despite indications that Germany’s financial regulator would block plans to locate the HQ in London. RBS said its privatisation would be delayed “by at least two years” because of the sharp 30% fall in its shares. The decision on where to locate a new London airport runway was postponed till the autumn. Boston Beer Company applied for the Brexit trademark. It hopes to market a cider under the name.