Hammond to hear senior bankers’ views on Brexit as UBS sounds jobs warning
UK Chancellor Philip Hammond will meet senior bankers in London today to set out the Government’s plans to support the economy and sound out their views for a post-Brexit Britain. Hammond will host several members of the European Financial Services Chairmen’s Advisory Committee, the body convened to organise the finance sector’s response to Brexit and led by former minister and Chairwoman of Santander UK Shriti Vadera.
Meanwhile, Bloomberg reports that UBS Chief Executive Officer Sergio Ermotti said yesterday that 1,500 of its staff could be affected depending on the Brexit arrangements for financial services. “We believe that London will continue to be an important financial centre, although maybe not as important as it is today,” he said.
The Financial Times reports that economists at Crédit Suisse and Morgan Stanley have upgraded their UK GDP growth forecasts for this and next year, cancelling previous predictions of a recession in the aftermath of the vote to leave the EU. However, both institutions continue to believe that the Brexit vote is going to slow growth. Separately, US carmaker Ford has nearly halved a planned investment in its engine plant at Bridgend, in Wales – but said the decision is down to shifting demand in the European car market and has “nothing to do with Brexit.”
Separately, Bank of England Governor Mark Carney will appear at the House of Commons Treasury Select Committee today.
Sources: Bloomberg, Bloomberg, Bloomberg, The Financial Times, The Financial Times 2
Number 10 distances itself from Brexit Secretary view that UK staying in the single market “very improbable”
A spokesman for Prime Minister Theresa May has distanced Number 10 from comments made by David Davis, Secretary of State for Exiting the EU, where he suggested it was “very improbable” that the UK would stay in the single market if it meant accepting full free movement of people. The spokesman said, “He [Davis] is setting out his view – his view – that it is improbable. The work on this is ongoing,” adding that May has an “open mind” when it comes to the negotiations and plans to be “ambitious”.
Sources: The Daily Telegraph, The Financial Times, The Times
Australia’s Trade Minister says negotiations with UK “may be a few years off”
Australian Trade Minister, Steve Ciobo, used a speech in London yesterday to say, “While we wait for the UK to be in a position to formally negotiate, Australia is working towards a comprehensive Free Trade Agreement (FTA) with the EU. This was our goal before June 23. It remains a goal for us today.” He went on, “The fact is Australia-UK negotiations on an FTA may be a few years off. The processes to disengage with the EU will take years, years of potential liberalisation that we can’t afford to let slip.” Ciobo also told the BBC Radio 4’s Today programme this morning, “My formal advice is that – and this is from the UK side – the UK is unable to negotiate or sign an agreement prior to the formal exit from the EU. We can certainly have preliminary discussions and that’s part of what I’m doing here this week. Preliminary discussions around what a post-Brexit Australia-UK trade deal might look like.” Yesterday the two governments agreed to establish a formal Australia-UK trade working group.
Sources: Statement by Department for International Trade, Reuters
UK manufacturing output fell in July but overall industrial production edged up
UK manufacturing output fell by 0.9% in July from June following the UK’s vote to leave the EU. The fall was the sharpest recorded and was deeper than expectations of a 0.4% fall. However, data also showed that UK industrial production edged up 0.1% in July from June compared to a forecast of a fall of 0.2%.
Separately, Halifax has said that house price growth has slowed with overall prices falling by 0.2% in August compared to July, though they were still 6.9% higher than August 2015. However, Halifax did not specifically cite the impact of Brexit as a factor. Housebuilder Barrat has seen solid sales in July and August, saying it is “business as usual” since the UK’s vote to leave the EU.
Sources: ONS, Reuters, Reuters
Scotland prepares legislation for second independence referendum
Scotland’s First Minister Nicola Sturgeon has said that the Scottish government will begin preparing legislation for a new referendum on independence from the UK as a back-up plan. “In the first instance, we will seek to positively influence the development of the UK government’s negotiating position ahead of Article 50 being triggered, to ensure that options for Scotland to maintain our relationship with Europe are developed and considered…However, if it appears that the best – or only – way to protect our interests is to consider afresh the question of independence, it is essential that such an option is available to the Scottish Parliament,” the government programme reads.
Sources: Scottish Government Programme, EUObserver
Slovenian PM doesn’t rule out shutting Greece out of passport-free Schengen area due to poor border policing
Slovenian PM Miro Cerar told Die Welt in an interview, “Let’s be honest: the Greeks do not protect the Schengen [external] border enough…Of course their situation is particularly complicated, but they receive financial support and help in policing. The Greeks, however, do not use all the help.” On the possibility of a Schengen area without Greece, he said, “If Greece continues not to show itself to be responsible and solidary, then the rest of the Schengen member states will very soon consider all possible options. Because it is about our existence.”
Source: Die Welt: Cerar
UK to fund £2m wall to improve security at Calais
UK Immigration Minister Robert Goodwill told MPs yesterday that work will begin on a four-metre high wall, at the cost of £1.9m, to stop refugees boarding lorries at Calais. It is part of a £17m package of joint Anglo-French security measures to tighten precautions at the port.
Sources: The Guardian, The Daily Mail
Dutch Finance Minister lambasts the EU for starting “projects without finishing them”
Dutch Finance Minister Jeoren Dijsselbloem said in a speech at Bruegel last night, “The EU has failed to deliver on its main tasks…We were unable to guarantee to our people prosperity and security…The EU has not been part of a solution to [angry voters’] problems…We expanded the EU without at the same time strengthening it. We started projects without finishing them.”
Source: Bruegel
Poland and Hungary see opportunity for “counter-revolution” in the EU following Brexit
Hungarian Prime Minister Viktor Orban said, “Brexit is a fantastic opportunity for us. We are at a historic cultural moment. There is a possibility of a cultural counter-revolution right now.” Kaczynski echoed this view, adding, “Should we wait for the strongest [to act]? But as a matter of fact there is only one such strongest. Or should we take the initiative? I am favour of taking the initiative…For this counter-revolution to be conclusive, there must be some changes in the EU itself, its structure, its decision-making process.”
Source: The Financial Times
Le Pen could win the first round of French presidential elections, says survey
The Front National’s Marine le Pen would not struggle to reach the second round of France’s 2017 presidential race, according to a TNS Sofres OnePoint survey for Le Figaro and LCI. The survey, which tested multiple scenarios across the parties, even suggested that Le Pen has the potential to win the first round outright, only failing if faced by conservative Alain Juppé. The survey puts Juppé ahead of his conservative rival Nicolas Sarkozy. It also reveals that recently-resigned Economy Minister Emmanuel Macron, who has formed a new movement, would comfortably beat President François Hollande, who would poll in fourth or even fifth place.
Sources: Le Figaro, Le Monde
Ireland won’t be part of EU army
Ireland’s Foreign Affairs Minister, Charlie Flanagan, has said “There is no provision in the EU treaties for creation of an EU-wide army.” This follows reports that the EU’s Foreign Policy Chief, Federica Mogherini, is said to be preparing to set out steps to create EU military structures “to act autonomously” from NATO. A spokeswoman for Paul Kehoe, Ireland’s Minister of State with responsibility for defence, supported Flangan’s comments saying, “Defence policy is a national competency and the EU is not involved in its formation… Ireland’s traditional policy of military neutrality continues and remains unaffected.”
Source: Irish Independent
Open border in Ireland is not a threat, says Ambassador
Ireland’s Ambassador to London, Dan Mulhall, told the House of Lord EU Select Committee yesterday, “It doesn’t seem to me that the Irish border provides any greater challenge for anybody here [in the UK] and I don’t think there’s any great risk that that border will be abused in the future” and that any effort to control free movement between Ireland and Britain would be “very damaging.”
Source: Irish Independent
Universities call for clarity on status of EU students and academics
The Times reports that Sir Leszek Borysiewicz, Vice-Chancellor of the University of Cambridge, told a parliamentary committee that there is “disquiet” among European academics who work at leading British universities who want to know if they can stay. University leaders also called for a statement within weeks clarifying the position of EU students applying to study in Britain next year, saying that the uncertainty risked damaging higher education.
Source: The Times
Visegrad group to present proposals at Bratislava summit
The so-called Visegrad group – Poland, Hungary, Slovakia, Czech Republic – will present a joint position at next week’s EU summit in Bratislava on the future of the EU. Polish Prime Minister, Beata Szydlo, said that the Visegrad group has “enormous potential” and a “recipe for the EU” adding that the EU requires reforms “to bring it closer to its citizens.”
Sources: EUObserver, EurActiv
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