- Ryanair cuts 2017 profit guidance, mainly because of the pound’s decline
- Burberry sees tourists spending more on luxury goods in U.K.
- U.K. minister says May will outline current Brexit thinking at summit
- Bank of America CEO says Brexit won’t have “any great impact” on firm
- WTO economist says U.K. may take years to seal new trade deals
- Societe Generale to put planned internal London transfers on hold, says the FT
- Real estate seen hurt by Brexit unease of “wait now, invest later”
- U.K. agrees to establish trade dialogue with New Zealand
- Think tank says food prices will fall once U.K. escapes EU regulations
Brexit Bulletin: Prices Pickup as Import Costs Surge
By: Simon Kennedy | Oct 18 2016 at 02:30 AM | International Trade
U.K. inflation accelerated to the quickest pace in almost two years in September, part of a trend that’s set to continue as the weaker pound pushes up the cost of foreign-made products.
Import costs jumped 9 percent and input prices 7.2 percent.
Such forces explain the recent selloff in U.K. government bonds as the prospect of faster inflation gives investors another reason to flee a market hit by Brexit.
Still, 70 percent of economists surveyed by Bloomberg still say the pickup in prices won’t stop the Bank of England from cutting its key interest rate to a record low of 0.1 percent next month.
In the Courts
A U.K. government lawyer said on Tuesday it’s “very likely” that any final agreement between the EU and Britain over Brexit would need to be ratified by Parliament.
James Eadie told a court that while not impossible for Prime Minister Theresa May to proceed without a sign-off from lawmakers, the government’s view is that they will get a vote on the new treaty.
The comments didn’t address the central question facing the court of whether May can trigger Article 50 of the Lisbon Treaty by April next year without calling a vote in Parliament. The government’s main lawyer, Attorney General Jeremy Wright, said on Monday that a lawsuit seeking that is little more than an attempt to overturn the referendum result.
The court hasn’t scheduled a date for its ruling, but any opinion would have to be handed down in time for the parties to prepare for an appeal to the Supreme Court in December.
Meanwhile, read our Q&A to learn more about May’s bid to regain sovereignty by repatriating laws from the EU.
Confidence Games
The joke among British football managers is that when your team’s chairman expresses full confidence in your skills then your days in the job are numbered.
If the same applied to policy makers, Chancellor of the Exchequer Philip Hammond and Bank of England Governor Mark Carney might be feeling nervous today after May endorsed both.
Hammond has been the subject of a slew of newspaper reports suggesting he has angered pro-Brexit lawmakers by wanting to ensure access to Europe’s single market, delay immigration curbs and help banks. As a result, Hammond has been excluded from some meetings and questions are being asked about just how powerful the Treasury is these days.
As Bloomberg’s Svenja O’Donnell reports today, Hammond has found sympathy at the Bank of England, where the lack of common ground among ministers over Brexit has caused concern. Carney is fighting his own battles, saying last week he won’t “take instruction” from politicians after May recently highlighted the costs of ultra-loose monetary policy.
The prime minister has “full confidence” in Hammond and is “clear in her support” of Carney, May’s spokeswoman Helen Bower said on Monday. The Guardian said today that Hammond’s worries about a “Hard Brexit” are shared by Business Secretary Greg Clark and Pensions Secretary Damian Green.
Still, the sense that the two leaders of the British economy are under fire may continue to make financial markets nervous about what May plans for Brexit.
Brexit Bullets
