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Monday, August 07, 2017

The World After Brexit. (Still in Catch-Up Mode)

After Brexit: Jean-Claude Juncker sets five paths for EU's future.

European Commission President Jean-Claude Juncker has revealed his five future "pathways" for the European Union after Brexit. His white paper looks at various options, from becoming no more than a single market to forging even closer political, social and economic ties. The 27 leaders of EU countries will discuss the plans, without Britain, at a summit in Rome later this month. The meeting will mark the EU's 60th anniversary. Germany's foreign minister, Sigmar Gabriel, has already responded to dismiss the idea of the EU purely being a single market.

CBI chief warns against 'no deal' Brexit.

Leaving the EU without a trade deal would be "irresponsible", the president of the CBI business group will warn. Paul Drechsler will say he agrees with the PM that a deal can be done but it is "wrong" for others to suggest the only choice is to leave without one. He will say both UK and European firms fear this "worst-case scenario". Pro-Brexit group Change Britain accused the CBI of being "proven wrong time and again on Europe" and said it should be "more optimistic" about the UK. Mr Drechsler's speech in London follows similar warnings from the British Chambers of Commerce and former chancellor George Osborne earlier this week. He will say that business supports the government's plan for an ambitious trade deal and the CBI is working with business groups throughout the EU to work towards a deal in everyone's interests. "But to those whose first and only choice is for Britain to walk away without a deal, I say you're not only wrong but irresponsible," he will say. Mr Drechsler argues that if the UK were to revert to World Trade Organisation trading rules in the absence of an EU deal, British firms would face tariffs on 90% of their exports to the EU without an agreement and more "regulatory hurdles" which would hurt firms across the bloc. He will say that while some businesses are already preparing for such a "worst case scenario", others are unable to do so because the costs are too high.

UK economy 'loses momentum' as services growth slows.

Growth in the UK's service sector eased to a five-month low in February, according to a closely watched survey. The Markit/CIPS purchasing managers' index (PMI) for services fell to 53.3, down from 54.5 in January. However, it remains above the 50 threshold that separates growth from contraction. Markit estimates the economy will grow by 0.4% in the first quarter of 2017. The economy has "lost momentum" after "impressive" growth at the end of 2016, said Chris Williamson of IHS Markit. Services, which include areas such as finance and hospitality, make up more than three-quarters of the UK economy. Markit said the sector had been stung by the steepest rise in costs for more than eight years as a result of the weak pound. This is likely to mean that inflation faced by consumers "has significantly further to rise", said Chris Williamson, chief business economist at IHS Markit. Latest official figures showed that inflation hit 1.8% in January, but Mr Williamson said the rate was expected to hit 3% over the next year.

Brexit: UK 'not obliged' to pay divorce bill say peers.

The UK could exit the EU without paying anything if there is no post-Brexit deal, a group of peers has claimed. The government would be in a "strong" legal position if the two-year Article 50 talks ended with no deal, the Lords EU Financial Affairs Committee said. But it warned failure to reach any kind of financial terms would undermine PM Theresa May's aim of securing continued favourable access to EU markets. It has been reported the EU may demand a "divorce bill" of up to £52bn. Mrs May has warned the EU against punishing the UK for voting to leave in last year's referendum but several EU leaders have said the UK cannot enjoy better arrangements outside the EU than it currently has. The question of what, if anything, the UK remains financially liable for after Brexit is likely to be one of the flashpoints in negotiations when they begin in earnest. The cross-party committee said talk of billions in pounds in liabilities was "hugely speculative" and there was a case that there may be no upfront cost to leaving. "Although there are competing interpretations, we conclude that if agreement is not reached, all EU law - including provisions concerning ongoing financial contributions and machinery for adjudication - will cease to apply, and the UK would be subject to no enforceable obligation to make any financial contribution at all," it said. "This would be undesirable for the remaining member states, who would have to decide how to plug the hole in the budget created by the UK's exit without any kind of transition. It would also damage the prospects of reaching friendly agreement on other issues. Nonetheless, the ultimate possibility of the UK walking away from negotiations without incurring financial commitments provides an important context."

Brexit: Ending free movement may not cut migration, says Lords report.

Net migration to the UK may not fall as a result of ending EU free movement post-Brexit, a Lords report has said. The EU home affairs sub-committee said that net migration - immigration minus emigration - was consistently higher from outside the EU. An immigration system for when the UK leaves the EU has not yet been outlined by ministers. The government said it was considering "various options" as to how EU migration might work. It has pledged to reduce net migration to below 100,000 by 2020. Prime Minister Theresa May has said she aims to trigger Article 50, to begin the two-year process of leaving the EU, by the end of this month. In the report, the committee said: "Until end June 2016, migration to the UK from outside the EU was consistently higher than EU migration, even though the relevant policy levers are under national control. Restoration of national control over EU migration may or may not, therefore, deliver a reduction in overall net migration." In the most recent official figures, covering the year to the end of September, both immigration and net migration from the EU were higher than that for the rest of the world for the first time. Overall, net migration to the UK dropped to 273,000 in the year to September, down 49,000 from the previous year. The committee said that cutting EU immigration is unlikely to provide a "quick fix" for low wages. Factors such as the National Minimum Wage, National Living Wage and inflation were more significant in driving or impeding real wage growth for low earners, the report said.

All details above from BBC News website.

[Well, the government – so-called – are turning mixed messages into an art form presently. There will be a transitionary period post Brexit to allow things to normalise (oh, no there won’t be!), The free movement of people will continue post-Brexit to allow industry to adapt to the new conditions (actually free movement to stop the second we leave the EU), We’ll be paying a £36 billion divorce bill (over our dead bodies we will) and so on. No wonder everyone, including the EU negotiators, have no idea what’s going on! Which isn’t exactly enhancing our credibility on the Continent or strengthening our negotiating position. The clock is ticking people. Get your asses moving!]

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