Theresa May has arrived in Japan for the first day of her visit to Japan. Whilst the first item on the agenda was to condemn North Korea’s missile test as “reckless provocation”, attention soon turned back to the main reason for the trip – laying the foundations for a post-Brexit trade deal.
The Prime Minister has optimistically suggested that the same terms that are nearing agreement on the EU-Japan trade deal should apply to the UK too. However, the Japanese government has been forthright in voicing its concerns. One official was quoted in the Financial Times yesterday: “I don’t think there will be substantial progress. We haven’t finished [free trade] negotiations with the EU, just agreed at the political level, and many issues still remain.”
It has been widely reported that the Japanese Prime Minister Shinzo Abe is unlikely to commit to anything before understanding what the UK’s future relationship with the EU will be.
Theresa May needs a Brexit win, especially after Michel Barnier’s call for the UK to start “negotiating seriously”. Whether Japan will provide it is a different story.
The state of Texas is continuing to battle tropical storm Harvey, with flood waters expected to peak today and tomorrow as a further 20 inches falls by the end of the week. So far, 13,000 people have been rescued and 18 have been confirmed as dead. However, with many missing and an area 15 times the size of Manhattan under water, the confirmed death toll is expected to rise once the flooding recedes.
Kim Jong-un, the North Korean leader, has warned that Tuesday’s missile test, which sent a domestically produced Hwasong-12 missile over Japanese territory for the first time, was a “meaningful prelude to containing” the US Pacific island of Guam – described by Pyongyang as "an advanced base of invasion". The UN Security Council unanimously condemned the launch and called for the full implementation of sanctions agreed last month, but stopped short of recommending fresh measures.
Kezia Dugdale has resigned as Scottish Labour leader. In an interview with BBC Scotland’s political editor, Brian Taylor, Dugdale said she was leaving the party in a better state than it was when she took on the role in 2015, but stated her belief that it was time to “pass on the baton” and she wanted to give her successor the necessary time to prepare for the next Scottish Parliament election in 2021.
Business and Economy
Details of the government’s £160 million investment in the life sciences sector will be announced later today as part of an independent review, led by Sir John Bell, of an industry which is worth £64 billion to the UK economy. Business Secretary Greg Clark will reveal how £146 million of previously announced funding will be allocated, whilst Health Secretary Jeremy Hunt will promise £14 million to support medical technology research centres.
The pound has fallen to an eight-year low against the euro, as the single currency is boosted by a growing eurozone economy and political risks subside. Meanwhile, sterling has been weighed down recently due to weak growth and inflation which have dampened expectations that the Bank of England will raise interest rates this year.
Price growth has halved in the UK property market over the last year according to Nationwide. Twelve months ago, prices were rising at an annual rate of 5.6 per cent but, in the year to August, they rose by 2.1 per cent. The building society said this was “consistent with signs of cooling in the housing market and the wider economy”.
What happened yesterday?
European markets fell yesterday as traders returned to work after the bank holiday. The losses were largely attributed to the increasing tensions in east Asia after North Korea tested a missile which flew over Japan and landed in the waters of the northern Pacific. The FTSE 100 closed down 64.03 points or 0.87 per cent to 7337.43. ITV and Morrisons Supermarkets were the main fallers, dropping 4.91 per cent and 3.70 per cent respectively. However, mining stocks performed well. Rangold Resources climbed 4.56 per cent whilst Frensillo was up 2.59 per cent. On the currency markets, the pound was up 0.04 per cent against the dollar at $1.2983, and down 0.33 per cent against the euro at 1.0759 euros.
BATM Advanced Communications Ltd., Cathay International Holdings Ltd., The Gym Group, HSS Hire Group, IFG Group, PJSC Megafon GDR (Reg S), Petrofac Ltd., PureTech Health, Vimetco NV GDR (Reg S)
Aberdeen New Dawn Investment Trust, Collagen Solutions, Lindsdell Train Investment Trust, Maven Income and Growth VCT 6, New Trend Lifestyle Group, Ultimate Sports Group
(07:00) Nationwide House Price Index
(09:30) Consumer Credit
(09:30) M4 Money Supply
(09:30 Mortgage Approvals
International Economic Announcements
(10:00) Consumer Confidence (EU)
(11:00) Business Climate Indicator (EU)
(11:00) Economic Sentiment Indicator (EU)
(11:00) Industrial Confidence (EU)
(11:00) Services Confidence (EU)
(12:00) MBA Mortgage Applications (US)
(14:30) GDP (Preliminary) (US)
(15:30) Crude Oil Inventories (US)
Columns of note
Writing in The Telegraph, Jeremy Warner argues that there is nothing to celebrate from the falling value of sterling, despite what optimists say about boosting exports and rebalancing the economy.
In The Guardian, Frances O’Grady, TUC secretary general and Sam Bowman from the Adam Smith Institute set out the opposing arguments on whether companies should be forced to put workers on boards.
Did you know?
The famous “Hollywood” sign in Los Angeles originally read “Hollywoodland”, and was erected in 1923 as an advertisement for a local real estate development. The last four letters were removed in 1949 to reflect the Hollywood district rather than the housing development, as part of a deal between the Hollywood Chamber of Commerce and the City of Los Angeles Parks Development to rebuild the sign which had fallen into a state of disrepair.
House of Commons
In recess until 5th September
House of Lords
In recess until 5th September
In recess until 3rd September