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The Conservative Party yesterday announced Prime Minister Theresa May would establish nine trade commissioners in different regions of the world to promote exports and drive trade policy overseas post-Brexit. In a statement, the Party said, “They will be based overseas in nine different regions, determined by markets rather than national borders, to ensure UK trade policy is guided by local experience and expertise.” The Party also announced the creation of a new “Board of Trade,” which would bring together leading business figures and politicians to help lead overseas trade delegations.
Meanwhile, a Survation poll for ITV published yesterday shows the Conservatives’ lead against Labour has narrowed to one percentage point, with the parties polling at 41.5% and 40.4% respectively. The polling was conducted before last weekend’s attack in London. Last week Survation showed the Conservatives ahead by six points.
Separately, according to Reuters, EU leaders are hoping Prime Minister Theresa May is re-elected on June 8 with a bigger majority. A senior EU official is quoted as saying, “We need a government strong enough to negotiate. We need a stable partner.” Reuters states that EU Brexit negotiators fear that if May was to obtain a similar majority to what she has now, this would make her susceptible to pressure from MPs’ in her own party to reject the Brexit deal.
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The latest quarterly survey by the EEF, the manufacturers’ organisation, has reported a “surge in performance” for British manufacturers, due largely to the devaluation of the pound and growing confidence in international markets. The EEF revised up its forecast for manufacturing sector growth in 2017 from 1% to 1.3%. It continues to predict a slowdown in 2018, but expects a growth rate of 0.5%, rather than its previous forecast of 0.1%.
Meanwhile, the Purchasing Managers’ Index (PMI) for the services sector shows that growth in UK services slowed to 53.8 in May, down from a four-month high of 55.8 in April. The slowdown has been attributed to factors such as the general election and the rise in inflation to 2.7%. By contrast, recent PMI figures for the UK’s construction and manufacturing sectors indicate strong growth. Overall growth reported by PMI surveys for the second quarter show the UK economic was expanding at a rate of 0.5%.
Elsewhere, a new report by Investco has found that around 41% of sovereign investors surveyed, including sovereign wealth funds and central banks, expect to reduce their UK assets this year. Around 54% said they would not make changes to their allocations until they are able to understand the long term impacts of Brexit. Investco also found that investors were questioning the UK’s future as an investment hub in Europe, and rated Germany as the most attractive European market for investment, followed by Italy and France.
RSA insurance group has announced it will open a new office in Luxembourg in response to Brexit. A spokesperson said, “Luxembourg is an ideal location with multi-national expertise, strategically located within RSA’s existing EU branch network and has an experienced regulator. While Brexit is not a major issue for RSA, the move allows the sensible reconfiguration of the branch network in light of the UK’s exit [from the EU].”
The Daily Telegraph
Former leader of the Liberal Democrats, Nick Clegg, will say in a speech on Brexit today, “How will Britain be kept safe after Brexit? Theresa May has vowed to pull Britain out of the jurisdiction of the European Court of Justice (ECJ), a decision which means we would no longer have access to vital EU-wide databases of criminal activity…Where are the contingency plans when our police forces find themselves unable to check the databases of 28 EU countries at the touch of a button?” The UK currently uses frameworks such as the law enforcement agency, Europol, and the Schengen Information System (SIS).
The EU will on Wednesday announce plans for a €1bn defence fund for research into new military technology. According to the Guardian the draft paper reads, “The development of a new generation of many major defence systems is today beyond the reach of a single EU member state. More Europe in defence and security is clearly needed.”
European Council President Donald Tusk has expressed concerns over plans to construct a new pipeline known as Nord Stream 2 for the transfer of gas from Russia to Germany, citing fears that it will strengthen Moscow’s position in Eastern Europe. In a letter addressed to European Commission President Jean-Claude Juncker, Tusk stressed his “negative view” of the proposed pipeline under the Baltic Sea, saying it would “not serve the best European interest” and leave Ukraine “at Russia’s mercy”. He added, “It also contradicts the objective we have set for the energy union. . . it will make us more dependent on Russian supplies and it will concentrate gas transit along the existing route.” The plan has caused division within the EU, as it is strongly backed by Germany but opposed to by Poland and other states that do not want to increase their dependence on Russian gas.
Saudi Arabia, the United Arab Emirates, Egypt, Bahrain, Maldives, Yemen and the government based in eastern Libya yesterday announced that they are breaking diplomatic ties with Qatar and plan to stop all land, air and sea traffic with Qatar and eject its diplomats. Saudi Arabia attributed the decision to Qatar’s “embrace of various terrorist and sectarian groups aimed at destabilising the region including the Muslim Brotherhood Group, Daesh [Islamic State] and Al-Qaeda”. In a statement, the Qatari Ministry of Foreign Affairs said, “Qatar has been exposed to an instigation campaign based on allegations that amounted to absolute fabrications, which proves that there are premeditated intentions to cause damage to the State.”
Following a meeting with his Turkish counterpart, German Foreign Minister Sigmar Gabriel yesterday said, “We will have to move the troops out of Incirlik. The Bundeswehr [German armed forces] cannot stay there. Turkey has made clear that, for domestic political reasons, it cannot approve visits by all [German] MP’s. Turkey must understand that in this situation, we must transfer German soldiers out of Incirlik.” Germany has 260 troops based at Turkey’s Incirlik for Western air strikes against Islamic State. Turkey’s decision to block German MP’s visiting the troops is in apparent retaliation after Germany gave asylum to Turkish officers who fled following last year’s failed coup attempt.