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In the wake of Brexit, French companies are less likely to want to invest in the UK. Similarly, UK firms will invest less in Europe and France. The net balance of UK investment is positive vis-à-vis France. In terms of incoming FDI for France, the UK was the second largest investor in 2013-2014, after Luxembourg, with close to 10 billion euros over the two years.
The UN Economic Commission for Latin America and the Caribbean (CEPAL) has published a report on taxation that draws attention to tax evasion and especially that of individual income tax payers. The income tax they pay only garners 1.3% of GDP on average for state budgets, compared with an average of 8.5% in OECD countries. Conversely, tax on corporate profits is slightly higher in Latin America than the OECD average.
The recovery in the real economy continues. The indicators that measure the markets' long-term inflation expectations have stopped deteriorating but are stabilising at a low level (below 1.5%) that is still a long way from the ECB target (below but close to 2%).
The success of Argentina's bond issue tells us two things First, that there is abundant available liquidity in the markets on the lookout for higher yields. Despite the downbeat prognostications about the growth outlook (most recently from the IMF) and even alarmist sentiment about emerging countries (a "Brazil effect"), risk aversion is undoubtedly declining.
The market would be slightly less dynamic in 2016. Transaction volumes would remain high, although slightly down, by 5%, in the pre-owned segment. This is because housing demand from first-time buyers could dip, linked to the slight increase of interest rates. Pre-owned home prices could be slightly up, by 1-2%, in 2016.
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