20 January 2017

Theresa May says UK is ‘open for business,’ as Chancellor warns not to let reprisal get in the way of economic logic

Speaking at the World Economic Forum in Davos, Prime Minister Theresa May said, “The UK will step up to a new leadership role as the strongest and most forceful advocate for business, free markets and free trade anywhere in the world. It means we must go through a tough negotiation and forge a new role for ourselves in the world.  So at the heart of the [Brexit] plan I set out earlier this week, is a determination to pursue a bold and ambitious free trade agreement between the UK and the EU. But, more than that, we seek the freedom to strike new trade deals with old friends and new allies right around the world as well…I am pleased that we have already started discussions on future trade ties with countries like Australia, New Zealand and India.”

Responding to the Prime Minister’s speech, Barclays chairman John McFarlane said that it “set out path of new global Britain, new confident Britain, new open Britain built on principle of free trade and with social policy at the centre. It was a very clear, firm agenda.” Kevin Ellis, the chairman and senior partner of PwC UK said, “She [Theresa May] has clearly listened to business about avoiding a cliff-edge, and marked out a journey and a plan, and that has been received positively…The phasing proposal is good – it gives certainty. Business wants certainty but a hand in negotiations.”

Meanwhile, Chancellor Philip Hammond also told the World Economic Forum, “We do pride ourselves on being one of the most open economies in the world – not just in terms of trade but also in terms of attitude. The UK is a platform economy. Nobody wants to see Britain pulling up the drawbridge. I welcome the people that bring entrepreneurship and capital to the UK.” He added that the strength of the City is its “scale and depth.” Hammond warned, “If political retribution triumphs over economic logic that will benefit no one and we will do whatever’s necessary.”

Separately, according to a poll by YouGov, 48% of people said they agreed with May’s statement on Tuesday that “no [Brexit] deal is better than a bad deal,” and 55% said May should be prepared to walk away. Meanwhile, according to an Ipsos MORI poll 44% of those surveyed believe staying in the EU’s single market is more important, while 42% say controlling borders should be the number one issue.

Source: Davos 2017: Prime Minister's speech to the World Economic Forum The Daily Telegraph Politico London Evening Standard

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Schäuble warns UK against becoming a tax haven

Speaking at the World Economic Forum in Davos, German Finance Minister Wolfgang Schäuble warned the UK against becoming a low-tax haven should Brexit talks with the EU fail to strike a deal. Referring to the G20 agreement on corporate taxes, Schäuble said, “I have heard Prime Minister May saying the UK will be a truly global economy. A truly global economy has got to stick to what has been agreed globally.” He added that, “the UK is always very cognisant of global agreements, so I have no concerns.” With a view to the upcoming Brexit negotiations, he said, “I am not a friend of too much rhetoric, and before you make negotiations you show your muscles…But we know we have to find solutions…We will do our very best to have good negotiations, but of course there will be some consequences.”

Source: Die Welt The Financial Times International Business Times

Moody’s warns UK of downgrade if UK fails to get FTA with EU

Rating agency Moody’s has warned that the UK would be downgraded if “strong indications in the early stages of the [Brexit] negotiations” show the UK “is unlikely to achieve its objective of negotiating a comprehensive [free-trade agreement] and maintain significant access to the EU market” as that would negatively affect medium-term growth prospects.

Separately, the Head of the International Monetary Fund (IMF), Christine Lagarde, told BBC News that the IMF still thinks Brexit “will not be positive all along and without pain.”

Source: BBC News Politico

Dutch Prime Minister: Ever-closer-union “is the fastest way to dismantling the EU”

Speaking at the World Economic Forum in Davos, Dutch Prime Minister Mark Rutte said, “There has been a huge shift in thinking because this whole idea of an ever closer union is now really buried. It’s gone…If we continue talking about that we are step by step moving towards some sort of European superstate, that is the fastest way to dismantling the EU.” He added, “What you now have is a Europe which has to be relevant and not the sort of project which has a momentum of its own…We need to show to the people that Europe is adding and it is possible to control immigration, to create more jobs, to control our outer borders.”

Source: Daily Express

Goldman Sachs denies reports of cutting down London staff by 50%

Goldman Sachs has been quick to deny Handelsblatt reports that it plans to cut down half of its London staff to approximately 3,000 employees, telling the Financial Times, “There remain numerous uncertainties as to what the Brexit negotiations will yield in terms of an operating framework for the banking industry…As a result, we have not taken any decisions as to what our eventual response will be, despite media speculation to the contrary.”

Source: Handelsblatt The Financial Times

Corbyn will ask Labour MPs to support Article 50

The leader of the Labour Party Jeremy Corbyn said, “It’s very clear the referendum made a decision that Britain is to leave the EU. It was not to destroy jobs and living standards or communities, but it was to leave the EU and have a different relationship in the future. I have made it very clear that the Labour Party accepts and respects the decision of the British people. We will not block Article 50.” On the prospect of a three-line whip, which would force Labour MPs to support the triggering of Article 50, Corbyn added, “All Labour MPs will be asked to vote in that direction next week or whenever the vote comes up.” Meanwhile, The Times quotes a Labour frontbencher who says, “There are 60 to 80 of our MPs who think the whole thing is a disaster and won’t back it…They want to be able to look back in 20 years when it’s all gone wrong and say ‘I was there and I voted against it’.”

Source: The Press Association

Le Parisien: Hollande seeks European Council Presidency

According to Le Parisien, French president François Hollande is seeking to become European Council president after the end of his term in May. The decision will be taken by EU leaders and current European Council president Donald Tusk is still expected to be renewed.

Source: Le Parisien