Brexit

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Addressing Conservative conference on Sunday for the first time since becoming Prime Minister, Mrs May made clear that border controls are a red line in the Brexit negotiations, saying that “we are not leaving the European Union only to give up control of immigration again”... Mrs May said that after Brexit the UK will be “a fully-independent, sovereign country” that will no longer be in the “jurisdiction of the European Court of Justice”, suggesting that Britain is preparing to leave the single market.

Theresa May says Britain must look beyond Europe - as she vows to trigger Article 50 by March

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U.K. businesses have become more cautious about the outlook and may be less inclined to invest and hire since the vote to leave the European Union, according to the British Chambers of Commerce. Citing “muted business investment intentions,” the lobby group used its first quarterly survey since the Brexit vote to call on Chancellor of the Exchequer Philip Hammond to take steps to lift confidence, including approving new infrastructure projects.

U.K. Firms Show Reluctance to Invest After Brexit Vote, BCC Says - Bloomberg

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Britain could be forced to pay the European Union a “divorce bill” of €20 billion (£18 billion) in the wake of the Brexit vote. The “upper estimate” to separate from the bloc would cover the UK’s shared EU liabilities including, unpaid debt of €241 billion (£217 billion), and €63.8 billion (£57.5 billion) in pension liabilities, according to new analysis conducted byThe Financial Times (FT). The study is the first attempt to put a realistic “price tag” on leaving the EU with some EU officials even warning that the cost could be substantially higher. Former UK Trade Minister Lord Livingstone said the cost spread over a year equates to £350 million a week. In the run-up to the June referendum, Vote Leave repeatedly claimed £350 million was sent to the EU each week. It also claimed this money could be used to increase NHS funding if Brexit was successful. However, just hours after the Brexit announcement, Ukip leader Nigel Farage said: “I can’t and I would never have made that claim – it was one of the mistakes that the Leave campaign made.”

Brexit: UK faces £350m-a-week 'divorce bill' as result of leaving the EU | The Independent

Wharton finance professor Joao Gomes thinks May is making “a grave mistake by rushing to the negotiation table.” For one, he expects the EU to take a tough stance on Brexit ahead of the French and German elections next year. The French presidential elections will be held in April and May 2017, while the German federal elections are set for between August and October 2017. “Afterwards, it is very likely that realism and a fair dose of euro-skepticism will creep into the views of those two key governments,” he says.

Can Brexit Be Achieved with Minimal Damage? - Knowledge@Wharton

If the U.K. opts to cut all its trade ties with the European Union and go for a "hard" Brexit, it could cost the government £66 billion ($81.1 billion) a year, according to a leaked government paper reported by The Times newspaper. U.K. government ministers have been warned that a "hard Brexit" – in which the U.K. leaves the EU's lucrative single market and instead reverts to World Trade Organization (WTO) rules – could prompt the U.K.'s gross domestic product (GDP) to fall dramatically, the newspaper said. "The Treasury estimates that U.K. GDP would be between 5.4 percent and 9.5 percent of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5 per cent," the leaked document noted.

'Hard Brexit' could cost UK government $81.1 billion a year: Report

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CS are estimating, in their base case, that CPI inflation will go from 0.7 per cent in 2016 to 2.3 per cent in 2017 and 2.5 per cent in 2018, with cable constant at 1.20. At parity? Well you can see the chart and won’t be terribly shocked, but we do wonder at what point the BoE finally gets nervous. As Simon Derrick at BoNYMellon has said, the UK’s policymakers have a track-record of allowing the currency to take the strain and act, in orthodox fashion, as a limited release valve.

GBP, inflation and the BoE, choose your own adventure edition | FT Alphaville

The Brexit vote clearly presaged an impending economic disaster. Hate crimes are up by 41%. A report from Euler Hermes, the world’s largest trade credit insurer, this week said hard Brexit would put more than 1,400 UK companies into insolvency. They argued that much of the damage would come from falling trade levels and lower consumer confidence.

A decline in UK living standards may be too high a price for Brexit | Business | The Guardian

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That's not to say the verdict, which is expected in mid-November, is set in stone. As legal commentator David Allen Green noted, the case is "finely balanced" and both sides articulated strong arguments. But, as Green later tweeted: "The government and Leavers should brace themselves for real possibility that court rules Article 50 needs parliamentary consent." This case is much more balanced than most people thought. But the judges' verdict is unlikely to be the end of the matter. The losing side is likely to launch an appeal to the Supreme Court, a process which will inevitably force May to delay the timetable for invoking Article 50 no matter what happens. Ironically, if the Supreme Court is unable to reach a decision, it will be obliged to refer the case to the European Court of Justice, meaning the EU's highest could end up deciding how Britain must execute its departure.

High Court Article 50 Brexit case summary and highlights - Business Insider

Actually, it is about more than just money. EU research funding usually comes with a condition that it be spent on projects in more than one country; this promotes the creation of international networks. Research is enhanced by looking at an issue from more than one perspective: more than half of papers by British academics are now co-authored with someone from outside the UK, and these papers tend to be cited more highly. So the real fear of universities, even greater than the anxiety about money, is that Brexit weakens these important links.

Britain has a proud academic record. We must not let Brexit devalue it | David Willetts | Opinion | The Guardian

Britain may end up with the most "extreme" version of Brexit because there may not be enough time to negotiate a good deal with Brussels, ministers have privately said. Senior ministers believe negotiations after Theresa May triggers Article 50 – which begins the formal process of leaving the EU - may not be completed by 2019 because they are "very complicated and this has never been tried". Under EU rules, if negotiations are not completed two years after Article 50 is triggered, Britain would simply crash out of the bloc and adopt World Trade Organisation rules, meaning that tariffs have to be imposed on trade between the UK and the EU. This would be seen as the "hardest" possible Brexit, with no access to the single market.

Britain may end up with the most 'extreme' version of Brexit because there may not be enough time to negotiate with Brussels, say ministers

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Britain’s biggest banks are preparing to relocate out of the UK in the first few months of 2017 amid growing fears over the impending Brexit negotiations, while smaller banks are making plans to get out before Christmas. The dramatic claim is made in the Observer by the chief executive of the British Bankers’ Association, Anthony Browne, who warns “the public and political debate at the moment is taking us in the wrong direction”. A source close to Brexit secretary David Davis said he and the chancellor Philip Hammond had last week sought to offer reassurance that they were determined to secure the status of the City of London.

Browne, whose organisation has been in intense negotiations with the government, further warns the EU that banks based in UK are currently lending £1.1tn, therefore “keeping the continent afloat financially”, and that this arrangement is at risk. Of Britain’s position, he writes that banking is the country’s biggest export industry by far, and that the current trajectory threatens not just tariff-free trade but the legal right of banks to provide services.

Brexit: leading banks set to pull out of UK early next year | Politics | The Guardian

Probably an episode in the series "It seemed a good idea at the time"

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There is a consensus that the EU’s integrated financial market is one of its great success stories. It makes it easier and cheaper for French farmers, German manufacturers and Italian fashion designers to secure funding. It helps EU citizens get better returns for their savings. And it also creates jobs, not least in the UK, where financial services as a whole employs more than a million people, two-thirds of them outside London. But it is now at risk. It is underpinned legally by the “passporting” system enshrined in EU legislation, which allows banks based in the UK to sell services to customers in Europe, and banks based in Europe to sell services to customers in the UK, and access the global financial centre that is London. It also allows banks based in one EU country to set up branches in any other EU country without going through local regulators.

Banking is probably more affected by Brexit than any other sector of the economy, both in the degree of impact and the scale of the implications. It is the UK’s biggest export industry by far and is more internationally mobile than most. But it also gets its rules and legal rights to serve its customers cross-border from the EU. Banker colleagues in other EU countries all agree that disrupting the free trade in financial services would be self-inflicted damage. The top regulators in the UK and EU also agree that we must retain the integrated financial market. If we left it all to the regulators, we would have a relatively quick and rational economic solution. But politics trumps economics and it will be the politicians who decide.

Brexit politicians are putting us on a fast track to financial jeopardy | Anthony Browne | Opinion | The Guardian

The case for European integration rests on the recognition of one’s own country’s growing irrelevance. But this simple insight remains a national taboo in Britain. A few important exceptions such as David Miliband aside, it seemed nearly impossible for most English politicians or pundits to say: look, seen from China or Brazil the difference between our country and Belgium is a rounding error; 0.87 per cent of world population versus 0.15 per cent.

Britain: narcissist nation | Prospect Magazine

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Theresa May is heading for a rebellion over her Brexit strategy after the high court ruled that the UK could not leave the European union without the permission of the British parliament. Three senior judges ruled on Thursday that the government could not press ahead with triggering article 50 of the Lisbon treaty, the formal process for beginning Brexit, without first consulting MPs and peers in the Commons and Lords.

The judgment ruled: “The most fundamental rule of the UK constitution is that parliament is sovereign and can make and unmake any law it chooses ... By making and unmaking treaties the crown [ie the government] creates legal effects on the plane of international law, but in doing so it does not and cannot change domestic law. It cannot without the intervention of parliament confer rights on individuals or deprive individuals of rights.”

Theresa May faces potential MP revolt following article 50 ruling | Politics | The Guardian

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Germany’s leading economists have urged the EU and Germany to try to halt Brexit or at least contain its fallout, saying the best outcome of the divorce talks would be for it not to happen. The German government’s independent council of economic advisers said in its annual report the worst of the impact of Brexit on both Germany and the EU would be political rather than economic.

Prevent Brexit or face political fallout, German economists warn EU | Politics | The Guardian

When the Guardian reported this week that Theresa May had privately made a passionate case for Britain’s continued membership of the EU shortly before the referendum, it didn’t look great. The problem wasn’t her opinion: she was saying the sort of things a member of the remain campaign was supposed to. The problem was that she wasn’t doing so in public – and the audience for her secret pitch was a select group of bankers from Goldman Sachs.

Why Theresa May shared her Brexit fears with Goldman Sachs | Business | The Guardian

Stephen Phillips, the MP for Sleaford and North Hykeham in Lincolnshire, stepped down on Friday with immediate effect. He was unhappy that the government had not planned to consult parliament before triggering article 50 – the issue that led to Thursday’s ruling. Former ministers warned that the febrile tone of media coverage, which included the judges who ruled against the government being condemned as “enemies of the people” by the Daily Mail, risked poisoning public debate. Dominic Grieve, the Conservative former attorney general, said reading hostile coverage in the Mail and the Daily Telegraph “started to make one think that one was living in Robert Mugabe’s Zimbabwe … I think there’s a danger of a sort of mob psyche developing – and mature democracies should take sensible steps to avoid that”.

Theresa May told to act to calm Brexit ‘mob’ anger | Politics | The Guardian

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“If you have a grounding based on Shakespeare, you never come across anything new,” is Michael Heseltine’s verdict on the shake-up of British politics triggered by the EU referendum. “Shakespeare knew it all, articulated it all, laughed at it all, exposed it all. Keep around in politics and the Shakespearean plot comes back and back…”

Interview: Michael Heseltine—Brexit was very scary before. It still is | Prospect Magazine

The basic position of all the institutions in Europe is very clear: the four freedoms are bound to each other. The internal market is based on four freedoms — not three, or two. Goods, services, capital, and the free movement of people. You cannot separate them. I think this is a perfectly firm and clear position for everybody. It's easy to say 'yeah, we want a special passport for people working in our services to go and work in Europe,' for example, but the opposite, like the possibility of Polish people to work on a construction site in London, is not possible. This just doesn't make any sense.

Guy Verhofstadt talks to BI about Brexit talks, the Leave campaign and his EU vision - Business Insider