It very much feels like David Davis and Michel Barnier are speaking different languages when it comes to their idea of what Britain’s exit from the EU will look like, with the pair seemingly only to agree that talks have reached stalemate following the fifth round of negotiations in Brussels.
Despite the lack of progress, the UK’s Brexit Secretary has called on the European Council to give the go-ahead to Barnier next week to start the next phase of talks and begin to map out what a future relationship will look like.
It appears he may have been listened to, as the BBC this morning reports that the EU is to start preparations for future trade talks with the UK. However, there’s just one problem for Davis and his colleagues: Britain won’t be involved in the discussions. In a sign of things to come after March 2019, an internal document suggests the other 27 European Union countries will exclude Britain when they open trade discussions among themselves next week, at the same time as officials in Brussels continue to thrash out a deal with the UK government.
Yesterday’s press conference had a real sense of déjà vu about it, but some political commentators have said that it shouldn’t be all doom and gloom at this point as there was little expectation that this first stage of negotiations would be done and dusted by Halloween.
However, much more expectation will be on December’s talks to deliver real progress. By then it will be just over a year before Britain leaves the EU, and the danger of leaving without a deal – deemed “unimaginable” by Christine Lagarde, the managing director of the International Monetary Fund yesterday – becomes ever greater.
Boris Johnson famously claimed that Britain could "have its cake and eat it" after it exited the European Union. If we leave it too late, we could find our deal is left with a soggy bottom.
Lord Lawson, a former Conservative chancellor in Margaret Thatcher’s cabinet, has demanded Philip Hammond be sacked for his unwillingness to prepare for a no-deal Brexit. Lawson’s intervention led to a wave of criticism for Hammond from Brexiteers.
Donald Trump has signed an executive order to weaken core elements of Obamacare in an effort to fulfil a campaign pledge to scrap his predecessor’s flagship policy. The White House confirmed that the administration would no longer offer subsidies to insurance companies that help them insure people on lower incomes on the scheme. (£)
Spanish Prime Minister Mariano Rajoy and Pedro Sánchez, leader of the opposition Socialists, have instructed their representatives to thrash out a plan to diffuse the country’s constitutional crisis. In an ambitious proposal, they will look at amending the 1978 constitution for only the third time in its existence. (£)
BUSINESS AND ECONOMY
It wasn’t only the FTSE 100 that set a new high yesterday, as the price of bitcoin has smashed through $5,000 for the first time. The cryptocurrency has soared by more than 750% in the past year and is worth four times as much as an ounce of gold.
A price war between banks and brokers has seen the dramatic fall in the cost of investment research, leading to concerns that asset managers could breach EU inducement rules if they agree to pay extremely low prices. A change in how analyst research is paid for, due to take effect in January 2018, has prompted the price wars, but there is a danger that the low prices could break the rule that investment managers should not receive anything that might be considered an incentive to trade with a particular bank or broker.
HSBC has opted for continuity in its appointment of a new boss. It has hired long-serving executive John Flint as chief executive, only two weeks after Mark Tucker took over as chairman of the bank.
What happened yesterday?
The FTSE 100 yesterday closed at a record high, finishing 22.43 points, or 0.3% higher at 7,556.24. The previous high was earlier this year, when the index reached 7,547.63 on 26 May.
The fall in the pound following Michel Barnier’s announcement that there was still “deadlock” in UK-EU divorce negotiations is likely to have benefited the rise in the index, given a weaker currency increases the value of companies' overseas earnings. Sterling was down 0.39% at $1.3173 and fell 0.23% against the euro at €1.1122.
Sky was one of the biggest winners on the day, as popular TV series Game of Thrones contributed towards 160,000 new customers joining in the first quarter of its financial year, an increase of 51% on the previous year. Shares in the broadcaster increased by 1.4%.
In the FTSE 250, Just East shares jumped 6.5% after the Competition and Markets Authority said the firm’s takeover of rival Hungryhouse was “unlikely to result in competition concerns”.
International Economic Announcements
(07:00) Consumer Price Index (GER)
(13:30) Consumer Price Index (US)
(13:30) Retail Sales (US)
(15:00) Business Inventories (US)
COLUMNS OF NOTE
Writing for Politics Home, Speaker John Bercow looks back at the last decade of reform in the House of Commons. While he concludes that parliament has evolved in the years since the expenses scandal, he concedes that more can be done to strengthen the House and empower backbench MPs.
Ed Conway has implored Philip Hammond to show more imagination in today’s Times. Labelling him the most conservative chancellor this country has had in a generation, Conway says Spreadsheet Phil’s dullness no longer suits the economy in the same way it did last year.
DID YOU KNOW?
The largest unclaimed prize was from the EuroMillions draw on June 8 2012. A ticket worth £63,837,543.60 had been bought by a player in the Stevenage and Hitchin area. It is a world-record unclaimed prize.
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