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Monday, December 12, 2016

Moving into the Early Stages (Hold on to your Hats!)

Brexit 'rollercoaster' warning as Hammond axes deficit target.

Chancellor Philip Hammond has said he will prioritise spending on new homes and transport rather than following his predecessor George Osborne's aim to balance the books by 2020. He told the Conservative conference the deficit was still too large and would need to be tackled "in due course". But he said the Brexit vote may cause "turbulence" and business confidence would be on a "bit of a rollercoaster". He said that it was "common sense" to invest to support growth and jobs. In his conference speech, Mr Hammond said his predecessor's deficit reduction policies "were the right ones for that time" but that times had changed since the vote to leave the EU, which he said had caused uncertainty for business. "When times change, we must change with them," he said. "So we will no longer target a surplus at the end of this Parliament. But make no mistake the task of fiscal consolidation must continue. The British people elected us on a promise to restore fiscal discipline. And that is exactly what we are going to do. But we will do it in a pragmatic way that reflects the new circumstances we face."

Pound falls as Theresa May indicates Brexit date.

Sterling has fallen to a three-year low against the euro after Theresa May outlined the timetable for starting Brexit negotiations. It also hit its lowest level against the dollar since the beginning of July. On Sunday, the prime minister said she would trigger Article 50, the clause needed to start the process, by the end of March 2017. That means the UK is likely to leave the EU by mid-2019. In early morning trade, the pound fell by about 1% against the euro to €1.1433, but it had recovered slightly by late evening. However, the pound was still down almost 1% against the dollar. At one point it touched $1.2818, its lowest rate since 6 July when it hit $1.2797. Mrs May's announcement had "unsurprisingly, been bad news for the pound", said Connor Campbell, Spreadex financial analyst. "Sterling has been spooked by May's promise to trigger the dreaded Article 50 by the end of March 2017." However, the currency had been particularly unsettled by the prospect of the UK leaving the EU single market, he said. "The PM, in a move to appease the more rabid members of the Tory party but one that is set to cause revolt from the backbenchers, has signalled that curbing immigration is the top Brexit priority even if it comes into conflict with Britain remaining in the single market," Mr Campbell added. "Combine all this volatility together and the pound has been left at its worst price since the start of July."

Seize 'golden' Brexit opportunity urges Liam Fox.

Britain must seize the "golden opportunity" provided by Brexit and not "fritter it away", Liam Fox has told the Conservative conference. The UK was synonymous with free trade for centuries and must be so again, the international trade secretary said. But he said British firms need to raise their game when it came to selling their goods and services abroad. Mr Fox was criticised last month for suggesting that British companies had become "fat and complacent". Mr Fox, a key Leave campaigner who was brought back into government by Prime Minister Theresa May, is hoping to set up trade agreements after the UK leaves the EU. In his speech to Tory activists, Mr Fox said free trade was "the building block of who we are" as a country and the UK had a "tremendous opportunity to shape the world for the benefit of all" in the wake of the vote to leave the EU. Suggesting that the UK had "outsourced" trade policy when it joined the EU Common Market in 1973, he said Brexit would bring it back "to the heart" of government.

MSPs 'might block' EU Great Repeal Bill.

Scotland's Brexit minister has warned the Scottish Parliament might block Theresa May's "Great Repeal Bill". The prime minister has said the bill would remove the European Communities Act 1972 from the statute book as a prelude to EU withdrawal. But Mike Russell said it would require Scottish Parliament approval, which may be denied if Scotland's interests are not represented in negotiations. Scottish Tory leader Ruth Davidson said there would be full consultation. But she also stressed that the EU referendum had been a UK-wide vote and that "there is no veto for the Scottish Parliament". Theresa May has promised that a "Great Repeal Bill" in the next Queen's Speech which would remove the 1972 treaty but also enshrine all existing EU law into British law. This would allow the government to seek to keep, amend or cancel any legislation once Brexit has been completed. Under the "Sewel convention" the UK Parliament would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament. But nothing in the Scotland Act prevents the UK Parliament from legislating on matters which are within devolved competence.

Theresa May insists UK economy can withstand Brexit turbulence.

Theresa May has said the UK economy remains strong despite Brexit concerns which have hit the pound and seen growth forecasts for 2017 reduced. Sterling has fallen to a 31-year low against the dollar while the IMF cut its GDP forecast for next year to 1.1%. But, as the FTSE 100 rose to an 18-month high, Mrs May said the outlook was "more positive" than many expected. The PM told the BBC's Laura Kuenssberg that her job was to make the process of EU exit as "smooth as possible". But she also acknowledged it would not be "plain sailing" and there would be "bumps in the road". Mrs May will give her first leader's speech to the Conservative conference on Wednesday against a backdrop of Brexit-induced jitters in foreign exchange markets. The pound has continued to slide since the prime minister said official negotiations on the terms of exit would begin by next March at the latest and indicated that she was seeking restrictions on freedom of movement rules - a move seen as incompatible with remaining a member of the EU's internal market. In its latest economic analysis, the IMF said the UK would grow by 1.8% this year, slightly higher than previously forecast in July, saying consumer spending remained robust and market reaction to the EU vote had been "reassuringly orderly". As it released its report, the FTSE 100 share index rose above 7,100 for the first time since May 2015, close to its record high.

All details above from BBC News website.

[Well, with the Supreme Court deliberating and Christmas just around the corner it’s comparatively quiet on the Brexit front. My boss thinks I’m delusional holding out any hope that it’ll never happen but it hasn’t happened yet and it looks like even the Government who keep saying ‘Brexit means Brexit’ are getting seriously cold feet. Sometimes it feels like they’re getting people ready for the announcement that, all things considered, they’ve decided that the best course for Britain is to stay. If that day comes to pass I will be uncontrollable with laughter. Until that day I’ll keep hope alive!]

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