Post Brexit – water leaders have plans

June 27, 2016

 Implementing plans to replace Euro loans, reviewing financing arrangements and working together to clarify investment plans are among the lead responses  UK's vote to exit the European Union (EU) according to findings by THE WATER REPORT.

 

In April our Expert Forum members – senior figures in the UK water sector – listed some of their likely immediate responses in the event of a leave decision from the poll on the UK's position in the EU. Finance arrangements and the impact on investment  topped the priority list. 

 

Causes for concern included: 

“It is likely to cause uncertainty and increase interest rates. In addition it will discourage some foreign investors who have big stakes in the UK water industry;”

  • “It would lead to economic uncertainty and might spook some of the EU based lenders. I think we can expect bank rates to rise in UK and for there to be a risk premium added to EU based and USD based loans.”

  • “Loss of the European Investment Bank (EIB) as an investor would be detrimental.”

Forum members who saw positive element to exit from the EU focused on the possible rollback of environmental regulation. A response that was typical in its tenor was: “A lot of the costs in the industry are related to meeting EU standards. At the moment, there is not much public discussion on those costs which the government is imposing on customers. If the UK exited the EU and had to set its own environmental standards, there [would] need to be more explicit public discourse on those standards and if customers should continue to pay for those standards."

 

See the full story from our April issue here

 

 

Meanwhile

Share prices at Severn Trent, United Utilities and Pennon have returned to their pre referendum level. The market view is seen as positive largely on the grounds that inflation will benefit regulatory asset value-based stocks as well as the subsequent relative fall in the cost of capital. 

 

And today, shadow environment secretary, Kerry McCarthy along with shadow water minister Alex Cunningham became the latest to quit Jeremy Corbin's front bench.

 

 

Tags:

Please reload

Featured Posts

MOSL has slimmed down its proposed budget increase for 2020-21 from 7.5% to 4.7%.

The market operator has published a post-consultation final business...

MOSL reins in budget uplift plans in its final business plan for 2020-21

January 19, 2020

1/4
Please reload

More from this week
Please reload

Archive