The first tangible impact of Brexit was revealed yesterday evening as the relocations of two EU agencies currently based in London were announced. The European Medicines Agency will move to Amsterdam, whilst the European Banking Authority will be lost to Paris. Between them, the two agencies employ 1,150 people, as well as attracting thousands of visiting researchers and staff members to London.
Brexit Secretary David Davis had previously voiced hope that the agencies could remain in London, or at least form part of the negotiations, which Liberal Democrat leader Sir Vince Cable said showed “how little grasp the government has of the potential consequences of Brexit”. The UK can hardly say it was not warned this would be an outcome of our withdrawal from the EU.
Meanwhile, it is thought that there is broad agreement amongst cabinet ministers that the UK should increase its financial offer to the EU, but only in return for the EU agreeing to move talks on to the future relationship and a possible transition agreement at December’s round of negotiations.
This has already prompted a backlash from Tory backbenchers, with Robert Halfon saying that the public “will go bananas” at the figures being mooted, and Jacob Rees-Mogg warning that any tax rises in tomorrow’s budget will lead the public to believe that they are being used “to fund a blackmail EU settlement”.
Another spanner in the works is the collapse of negotiations regarding the formation of the next German government – the biggest challenge Angela Merkel has faced in her 12 years as chancellor. Merkel would seem to prefer the prospect of a fresh election over forming a minority government, however there have been warnings that it is the right-wing Alternative for Deutschland (AfD) party which would benefit from such a move.
Official impeachment proceedings to remove Robert Mugabe as president of Zimbabwe are set to be triggered today after yesterday’s deadline for him to resign passed without response. His Zanu-PF party will table a motion of impeachment and believes that the process can be completed within a couple of days, although some constitutional experts have warned that it could take months to remove Mugabe from power. This morning, Emmerson Mnangagwa, whose sacking prompted last week’s army takeover, urged Mugabe to heed the “clarion call” of his people and step down.
Security firm G4S has commissioned an independent inquiry to review the “attitude and behavior” of staff at Brook House immigration removal centre. G4S has a contract to run the facility near Gatwick Airport and, in September, BBC Panorama aired footage recorded by a former custody officer which showed staff mocking, assaulting and abusing people being held there. Brandon Lewis, the immigration minister, is expected to be questioned by MPs today about any concerns his department may have had about the centre prior to broadcast of the programme.
The search for an Argentine Navy submarine has entered a “critical phase” due to the fact that the vessel is approaching the probable limit of its oxygen reserves. The ARA San Juan has 44 crew on board and has been missing for five days with ships and planes from several countries, including the UK, participating in the search. The submarine’s last communication on Wednesday was to report a mechanical failure related to its batteries. Sounds detected from the bottom of the ocean had raised hopes that crew members could be banging tools on the hull but it has since been established that “a biological source” was behind the noises.
BUSINESS AND ECONOMY
Easyjet has this morning reported a better than expected set of full-year results. Total revenues for the year to 30th September increased 8.1% to £5 billion and profits before tax stood at £408 million – a 17.3% drop on last year, but at the higher end of the company’s earlier forecasts. The company, which is Europe’s second-largest budget airline, also said it had enjoyed an encouraging start to its financial year “primarily as a result of some capacity leaving the market”.
Chemicals giant Ineos is expanding into deep water oil and gas exploration in the North Sea, after reaching an agreement with Siccar Point Energy to acquire two-thirds stakes in two exploration licences for areas north of Shetland. Ineos already has shares in North Sea gas fields after it took over DONG Energy’s portfolio earlier this year, and owns and runs the Grangemouth refinery and petro-chemical plant.
Uber has signed a deal to take initial delivery of 24,000 autonomous Volvo XC90 4X4s which could be on the road by 2019. Trial runs have already been carried out in San Francisco and Pittsburgh, although local regulations require a driver at the wheel. Whilst skepticism has been expressed about the viability of autonomous vehicles, Jeff Miller, a director at Uber, said that the agreement “puts us on a path towards mass-produced self-driving vehicles”.
The US Justice Department is aiming to block AT&T’s $85 billion takeover of Time Warner – one of the largest media deals ever announced – arguing that it will “substantially lessen competition, resulting in higher prices and less innovation for millions of Americans”. AT&T has said it will fight the decision in court and has suggested that the deal is being held hostage due to President Trump’s hostility towards CNN, which is owned by Time Warner.
What happened yesterday?
Despite opening lower, the FTSE 100 recovered over the course of the day and closed up 8.78 points, or 0.12%, at 7389.46.
Shares in Spire, the private hospital group, tumbled after Mediclinic withdrew from a bid for the company. FTSE 250-listed Spire ended the day down 8.42% whilst Mediclinic, a FTSE-100 constituent, was down 3.06%.
Thomas Cook had a good day, climbing 5.12% thanks to positive broker comment. Panmure raised its rating on the travel company from “sell” to “hold” and HSBC gave the company a “buy” rating.
Meanwhile on the currency markets, the euro suffered in early trading – falling by as much as 0.6% against the dollar – after coalition talks over the formation of the German government collapsed, prompting the possibility of another election. However, by the end of trading, it had recovered to virtually no change at $1.1739.
The pound was up 0.2% against the dollar at $1.3236 and gained 0.6% against the euro at €1.1272.
Compass Group, CYBG, EasyJet, Renew Holdings, Stride Gaming, Focusrite, Utilitywise plc
AO World, Babcock International Group, Big Yellow Group, CML Microsystems, De La Rue, Halma, Homeserve, IMImobile, Johnson Matthey, Scapa Group, Severfield, Solid State, Telecom Plus, VP
Aggreko, CRH, Equiniti Group, Intertek Group, Kingfisher, SIG, Spirax-Sarco Engineering, Spectris
Diurnal Group, Dunelm Group, Harvest Minerals Limited (DI), Jupiter US Smaller Companies, Pan African Resources, Tiso Blackstar Group SE
UK Economic Announcements
(09:30) Public Sector Net Borrowing
(11:00) CBI Industrial Trend Surveys
International Economic Announcements
(11:00) Existing Home Sales (US)
COLUMNS OF NOTE
Writing for the Conservative Home website, George Freeman MP reveals that he has stepped down as chair of the prime minister’s policy board in order to focus on his role as chair of the Conservative policy forum. He calls for Patrick McLoughlin to be replaced as party chairman and for a coherent vision accompanied by bold reform to tackle the economic injustice felt by the “have nots” in order to keep Jeremy Corbyn out of 10 Downing Street.
George Eaton, the New Statesman’s political editor, argues that the Brexit divorce bill shows that it is the EU which has taken back control. He states that Brexit is proving to be a cost in every sense and highlights the irony that Brexit has “left the UK more subservient to the EU than ever”.
DID YOU KNOW?
During the opening months of World War II, the UK and France developed plans for a strategic bombing campaign against the Soviet Union under the code-name Operation Pike. Although the Soviet Union was technically neutral at this time, the Molotov-Ribbentrop Non-Aggression Pact and Soviet provision of resources to Nazi Germany made the two countries allies in British and French eyes. Under the plans, oil production centres in Baku, Batum and Grozny would be attacked and destroyed, with the aim of collapsing the Soviet economy and depriving German forces of a vital resource.
The fall of France in May 1940 derailed the plans and the Soviet Union went on to fight on the side of the Allies after it was invaded by the Axis powers in 1941.
House of Commons
Oral Questions: Foreign and Commonwealth Affairs (including Topical Questions)
Ten Minute Rule Motion: Automatic Travel Compensation – Huw Merriman
Legislation: Continuation of consideration in Committee of the European Union (Withdrawal) Bill – day 3
House of Lords
Introduction: Lord Chartres
Legislation to control the use of drones - Baroness Randerson
Human rights situation in Indian-held Kashmir - Lord Hussain
Target number of additional social homes to be built by 2022 - Lord Shipley
Improving the performance of the Student Loans Company - Lord Hunt of Kings Heath
Ministerial Statement: UK Supreme Court judgment on minimum unit pricing of alcohol in Scotland
Scottish Government Debate: Suicide Prevention in Scotland
House of Commons
Oral Questions: Cabinet Office and Chancellor of the Duchy of Lancaster (including Topical Questions)
Prime Minister’s Question Time
Budget Statement – Philip Hammond
House of Lords
Planning and procurement for delay-free border crossings between the UK and EU immediately following the UK’s withdrawal from the EU - Lord Berkeley
Concerns raised in the Social Mobility Commission’s 'State of the Nation' report - Lord Lennie
Level of services for the collection of recycled materials and other refuse from domestic properties - Lord Greaves
Current projection for the aggregate deficit of NHS provider organisations - Lord Harris of Haringey
Short Debate: Improving the standard of wound care in the NHS - Lord Hunt of Kings Heath
Portfolio Questions: Education and Skills
Scottish Government Debate: Working in Partnership to Reduce Flood Risk Across Scotland