21 July


21 July

Good morning,

Q: When is a news conference not a news conference?
A: When there’s no new news to tell.

The media briefing hosted yesterday by Brexit negotiators David Davis and Michel Barnier demonstrated that we have at least moved on from the meaningless “Brexit means Brexit” motto but, in essence, simply told us there wasn’t much progress to report. After only two weeks of negotiations in earnest, I don’t suppose we could expect much more.

What did come across yesterday was the different tone adopted by both parties. Michel Barnier focused on the need for clarification from the UK on several points, while David Davis was slightly more positive, talking about work done constructively and “at pace”, and pointing out the need for flexibility on both sides.

The big stumbling blocks in the negotiations so far are citizens’ rights and the divorce bill.

The approach that will be taken to citizens’ rights after any transitional deal has lapsed is a particular sticking point. A current proposal would mean that an EU citizen living in the UK could settle in any of the 27 member states, whereas a UK citizen living in Europe could stay only in the country where they were domiciled, or return to Britain. British officials warned that the plan was unfair and called on the European Commission to show “respect” to so-called Brexpats.

Meanwhile, the Theresa May’s cabinet continues to focus on arrangements for a transitional deal. The Times reports that the prime minister is ready to offer EU citizens free movement to Britain for up to two years after Brexit, under plans devised by the chancellor, Philip Hammond. Arrangements for a transition period are likely to be welcomed by the business community, which continues to push for certainty as soon as possible.

Brexit is also on the mind of Sir Vince Cable, named yesterday as the Liberal Democrats’ new leader, at the age of 74. The sole candidate for leadership of his party has promised to fill what he sees as a “huge gap” in the centre of British politics, and argued that we need to prepare for an “exit from Brexit”.

I’m not sure, Sir Vince, that walking away from Brexit is a realistic prospect for the UK now. However, it would certainly merit a news conference if we did.


A powerful earthquake of magnitude 6.7 struck some Greek and Turkish coastal towns overnight, killing at least two people on the island of Cos and injuring some 200 others.

Baroness Hale of Richmond, who in 2004 became the first woman to sit on Britain’s Supreme Court, is expected to be confirmed as the next president of the Court in an announcement later today, the first time a woman has been appointed to this top post. Baroness Hale has been critical of the judicial appointments system in the past, for self-selecting from a pool of predominantly white men from similar economic and academic backgrounds.

BBC Radio 4 Woman’s Hour presenter Jane Garvey is leading a group of at least 10 female BBC presenters who are considering legal action against the broadcaster if it does not close the gender pay gap.

Business & Economy

ExxonMobil is taking legal action against the US Treasury over what the company describes as a “fundamentally unfair” $2m fine levied for a violation of Russia sanctions while Rex Tillerson, now US secretary of state, was chief executive in 2014. The Treasury said the company’s “senior-most executives” were aware of the sanctions when two of its subsidiaries signed deals with the Russian oil magnate Igor Sechin and described Exxon as having behaved with “reckless disregard”.

Microsoft has reported strong results, with quarterly profits nearly doubling to $5.3 billion. The firm said its figures demonstrate that a focus on cloud computing is working. Microsoft indicated earlier this month it would make changes to its business model to become less reliant on computer sales and older software products.

Goldman Sachs International CEO Richard Gnodde has called for a “significant” Brexit transitional deal to be agreed as soon as possible. Gnodde told the BBC he was spending money "every single day" on contingency plans for Brexit, including taking on more staff in the firm's European offices to serve EU customers post-Brexit.


What happened yesterday
The euro rose to an eight month high against the pound and an almost two-year high against the dollar yesterday, strengthening in reaction to a European Central Bank meeting. The ECB held rates as expected at zero per cent, while Mario Draghi stressed that the Bank needs to be “persistent and patient, we’re not there yet”. Rumours that the bank would wind down its asset purchasing programme in September contributed to the positive movement in the euro.

Meanwhile, the pound hit an eight month low against the euro as the European currency strengthened. This will weaken the spending power of British families on holiday in Europe this summer. The FTSE 100 closed 56.87 points higher at 7487.87.

Acacia Mining, Beazley, Capital & Counties Properties, PJSC Magnit GDR

Q2 Results

Trading Announcements
Close Brothers Group, Empresaria Group, Euromoney Institutional Investor, Record, Vodafone Group

AO World, Georgian Mining Corporation NPV, Homeserve, KCOM Group, Lekoil Ltd, Securities Trust of Scotland

UK Economic Announcements
(9:30) Public Sector Net Borrowing

Columns of Note

In The Daily Telegraph today, Fraser Nelson calls for a more moderate view of the Brexit process. He suggests that we risk becoming caught up in the portrayal that Brexit will be an unmitigated disaster and forget that Britain still has a strong hand. He points out that while Britain might be losing the battle of spin, it is slowly winning on substance.

The FT illustrates some profound changes in the global economy through seven charts today. These demonstrate, among other things, a narrowing gap between rich and poor nations as growth in high income countries slows. Emerging and developing countries are becoming increasingly important in output and global population. The piece also predicts that Chinese capital markets will become as influential in the global economy in the 21st century as the US.

Did you know?

If you’re left handed, you are in good company. Some famous lefties include: Leonardo da Vinci, Mark Twain, Mozart, Marie Curie, Barack Obama and Lionel Messi.

Parliamentary highlights

House of Commons
In recess until 5 September.

House of Lords
In recess until 5 September.

Scottish Parliament
In recess until 5 September.