The timing factor is a tough reality: There’s a lot to get through and not a lot of time to do it. There’s talk of the second EU summit happening at the end of next week, but there’s also talk of it taking until January for all of the technicalities to be taken care of before dotted lines can be signed upon. this won’t work particularly well for BoJo, who is adamant that we’re off on the 31st regardless and his team are looking at whether enough has been done to call this an ‘agreement in principle’ and therefore avoid having to ask the EU for an extension. There will be a huge amount of resistance from parliament if he does try this approach and I’m sure the EU would have something to say about the technicalities of leaving without everything being set in law, but we wouldn‘t be surprised if they try.
The other big factor is the DUP, who are the ones propping up Boris – albeit he still only gets to a minority government even with their 10 votes. The DUP want Northern Ireland to stay entirely within the UK’s customs union and aren‘t keen on the plan that the would see them have EU tariffs applied on their goods, with no means of controlling what those tariffs would be. It’s a very understandable argument from a Unionist party’s perspective, but doesn‘t do Boris any favours. His plan, according to those in the know is to try and buy them off. Theresa May did it to get the confidence and supply arrangement in place, now Boris is going to do similar, but apparently with “billions, not millions” according to sources reported by the FT. It might also be a bridge too far, regardless of money, as Brexit supporting Tory, Owen Paterson, has said “it would shatter the Belfast Agreement’s principle of Consent and completely undermine Northern Ireland’s status as an integral part of the UK”.
Brexit all seems very calm by comparison to the trouble we’re seeing in Barcelona at the moment. Streets are on fire and thousands of protesters are out in force over the Catalan independence issue. Violence has flared as Catalan independence leaders were handed long prison sentences for their roles in organising the independence vote in 2017, which Madrid said was illegal.
Elsewhere in Europe; Germany have said they’ll be sticking to fiscal prudence as usual and won’t be undertaking any stimulus measures that result in more debt. They’re going to wait and see just what might come of a crisis before they start to tap their vast potential spending power. The IMF have suggested that even if stimulus wasn‘t the underlying reason for spending, Germany should look at investing in social and infrastructure projects from a pure cost-benefit perspective as their borrowing rates are the about the lowest in the world.
As well as calling on Germany to spend, yesterday the IMF cut global growth forecasts again and blamed trade wars for the cuts, again. 2019’s global growth number should be 3% down from 3.3% forecast six months ago and Europe is only going to manage a 1.2% increase. China’s looking reasonably resilient with growth still above 6%, but the States is set to fall to 2.1%, well below Trump’s campaign pledges to keep growth above 3%.
Trump is on the tariff offensive, despite the evidence that trade wars aren‘t good for business! He’s looking at hitting Swiss pharmaceuticals in a bid to balance the Swiss-US trade deficit and he’s also looking at retaliatory taxes for Italy, if they go ahead with implementing a 3% transaction tax on web based companies. Al Jazeera has more on what Italy is planning and why.
It’s inflation day today, with both the UK and Europe set to see just how slow inflation is and how low future expectations are. A particularly low reading could back up Mark Carney’s recent comments that the next move in UK rates could be downward.
Have a great day