Equilibrium's finance and investment news roundup

Our roundup this week includes news that the decision to leave the European Union has wiped $1.5 trillion off UK household wealth, as well as IBM's announcement that it is to further invest in UK data centres despite the Brexit vote. We also bring news of the government further reducing its stake in Lloyds Banking Group and the bank collapse compensation limit returning to £85,000.

 

Brexit 'led to $1.5tn wealth drop'

The UK's decision to leave the European Union has resulted in $1.5 trillion (£1.2 trillion) being wiped off UK household wealth in 2016. This is according to a new report from Credit Suisse, which cited the pound's significant drop and the stock market going into reverse following the Brexit vote.

The report also revealed that around 400,000 Britons have lost their status as dollar millionaires, due partly to drops in values at the top end of the property market. However, it was shown that the UK remains behind only the US and China with regard to ultra-high-net-worth individual numbers (those owning more than £50 million in assets).

It was also revealed that 24% of the nation's wealth is still owned by the UK's top 1% of wealthiest individuals. 

IBM announces UK data centre investment

IBM has announced it is to increase its investment in the UK with the construction of four new cloud data centres. The global IT group said the UK's decision to leave the European Union has not affected the move because there will be "significant opportunities with or without Brexit", Reuters reports. It follows Facebook and Google in upping investment in the UK since the result of the referendum.

The company explained that the four new data centres will be built to meet demand from its corporate and public sector clients, among whom storing data and managing their businesses in the cloud is becoming increasingly popular.

Sebastian Krause, General Manager for Cloud Services at IBM Europe, commented: "UK customers truly understand the capabilities of cloud to drive innovation, to be more flexible on their business model, to have better insight for decision making, and to deliver better customer service." 

Government further cuts stake in Lloyds

The government has sold another 1% of its shares in Lloyds Banking Group as it looks to further cut its stake in the bank and return it to full private ownership.

In a statement, Lloyds revealed the government now owns 7.99% of the lender after UK Financial Investments Limited, which oversees the government's stake, resumed selling shares after a period of market unrest caused it to delay the sell-off.

The bank, which was bailed out during the financial crisis, said: "Today's announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their money back." 

BoE: Bank collapse compensation to return to £85,000

Bank account holders and savers will once again be able to receive maximum compensation of £85,000 should their bank collapse, after the limit was previously lowered to £75,000 in 2015 due to sterling climbing against the euro.

The Bank of England (BoE) revealed the changes to the Financial Services Compensation Scheme would be implemented by the end of January next year after sterling's significant fall against the euro following the Brexit vote.

The £85,000 limit, which covers current and savings accounts, as well as individual savings accounts - or ISAs - was in place previously for the five years leading up to July 2015.