An optimistic Brexit or something a little more naïve?
Economic watchdog OBR says its forecasts are optimistic.
The head of Britain's economic watchdog has defended its forecasts warning of the cost to Britain of leaving the EU. The Office for Budget Responsibility infuriated pro-Brexit Tories with its prediction that withdrawal would wipe 2.4% off growth over the next five years while adding £60bn to borrowing. Robert Chote said OBR forecasts were "more optimistic" than others. The OBR had to produce forecasts based on stated government policy, he said. He made the comments after Conservative former cabinet minister Iain Duncan Smith and backbencher Jacob Rees-Mogg said leaving the EU would lead to a more liberal trade regime delivering a boost to the UK economy. Mr Chote said the OBR's job was not to predict what it thought was the most likely outcome for the future, "but what the most likely outcome is conditional upon the current stated policy of the government", he told BBC Radio 4's Today programme. "Obviously, the outlook for policy as regards Brexit is not as clearly set out," he said. "We don't know what exactly the government is going to be aiming for and what could be delivered in the negotiations on things like the trade regime, migration. We asked them whether they wanted to tell us any more about their policy in all of these areas than is already in the public domain - and they said 'no'. Clearly it would have put us in a very difficult position if they had told us something and said we can't share that with the rest of the world."
Mark Carney plan for Brexit gets cool response from Gove.
Brexit supporters have rejected plans reportedly backed by Bank of England Governor Mark Carney for an extended transition when Britain leaves the EU. He hosted dinners last week with business leaders about keeping single market access for at least two years after Brexit, the Sunday Times claims. But former cabinet minister Michael Gove told the BBC that such a plan could complicate the Brexit process. A Bank spokesman declined to discuss "private meetings and conversations". Business has become increasingly concerned about a so-called "cliff-edge" change in trading relations with Europe after Brexit. Prime Minister Theresa May acknowledged the unease during a speech at the CBI conference on Monday. And in an interview, also in the Sunday Times, she admitted that the complexities of Brexit was something that kept her awake at night. However, she said she wanted to "get on with the deal" of leaving the EU. The governor's belief that there needs to be an adequate transition period is not new, however, and sources at the bank rejected reports that he had been in "secret talks" and "plots" last week. On 15 November, Mr Carney told the Treasury Committee that it would be in the interests of British companies, especially in the financial sector, to have a transitional deal to cover the period between leaving the EU and the finalising of new trade deals.
UK third quarter GDP growth confirmed at 0.5%.
The UK economy grew by 0.5% in the third quarter, official figures have confirmed, helped by export growth and stronger consumer spending. In its second estimate of the health of the economy, the Office for National Statistics (ONS) also says business investment grew by more than expected. That was up 0.9% following the Brexit vote, against the second quarter, although it was down on last year. There will be a third estimate of the figures in December. "Investment by businesses held up well in the immediate aftermath of the EU referendum, though it's likely most of those investment decisions were taken before polling day," Darren Morgan, an ONS statistician, said. However, it is expected that the effects of the Brexit vote and the fall in sterling will begin to feed through in the coming months. The Office for Budget Responsibility, which provides independent economic forecasts and analysis, said on Wednesday that it expected the economy to grow by 1.4% in 2017, down from the 2.2% it predicted in March. It cut its forecast for growth in 2018 to 1.7%, down from 2.1%. The "near-term strength of the economy after the Brexit vote is unlikely to persist", said Samuel Tombs chief UK economist with Pantheon Macroeconomics. "The outlook for stagnation in real incomes next year, as inflation rockets, points to a sharp slowdown in consumer spending growth ahead," Mr Tombs added.
Brexit: Legal battle over UK's single market membership.
The government is facing a legal battle over whether the UK stays inside the single market after it has left the EU, the BBC has learned. Lawyers say uncertainty over the UK's European Economic Area membership means ministers could be stopped from taking Britain out of the single market. They will argue the UK will not leave the EEA automatically when it leaves the EU and Parliament should decide. But the government said EEA membership ends when the UK leaves the EU. The single market allows the tariff-free movement of goods, services, money and people within the EU. The EEA, set up in the 1990s, extends those benefits to some non-EU members like Norway, Iceland and Liechtenstein. Non-EU members are outside the Common Agricultural Policy and customs union, but get barrier-free trade with the single market in return for paying into some EU budgets and accepting the free movement of workers. If the courts back the legal challenge and give Parliament the final say over EEA membership, then MPs could vote to ensure that Britain stays in the single market until a long-term trading relationship with the EU has been agreed.
Brexit notes photograph played down by government.
The government has distanced itself from a Brexit memo caught on camera in Westminster. The handwritten notes, carried by an aide to Conservative MP Mark Field, included "what's the model? Have your cake and eat it" and "unlikely" in reference to the EU single market. They were photographed after Mr Field and his aide left a meeting with the Brexit department at 9 Downing Street. The government said the notes did not reflect its Brexit position. "These individual notes do not belong to a government official or a special adviser. They do not reflect the government's position in relation to Brexit negotiations," a spokesman said. Captured on long-lens camera by photographer Steve Back, they refer to difficulties the government faces after it begins the formal two-year process of EU withdrawal next year. "Difficult on article 50 implementation - Barnier wants to see what deal looks like first," they note in an apparent reference to the lead EU negotiator Michel Barnier. "Got to be done in parallel - 20 odd negotiations. Keep the two years. Won't provide more detail. We think it's unlikely we'll be offered single market," they also say.
All details above from BBC News website.
[The BIG day is fast approaching – Article 50! Then the 2 Year clock starts ticking in earnest. Oddly though the quickest trade deal ever accomplished by the EU took 4 years and the *average* time is 7 years – with the longest negotiations taking 11 years. I have a feeling that our trade deal with the EU will take somewhat longer than the 2 years we have. In other words we’ll be going HARD and then going home with precisely NOTHING to show for 2 years of uncertainty and upheaval. Well done Brexiteers, you’ve screwed us all!]