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#Brexit and weak global demand to hurt UK in 2020, industry warns

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Brexit pressures and political uncertainty have prompted the Confederation of British Industry and a manufacturing trade body, Make UK, to downgrade their growth forecasts for next year, writes David Milliken.

Official figures have shown that Britain’s economy is growing at the weakest annual pace since 2010, and industry leaders see little or no improvement in 2020, even if Prime Minister Boris Johnson wins re-election and secures a Brexit divorce deal by a 31 January deadline.

The CBI on Monday predicted economic growth of 1.3% this year and 1.2% in 2020, followed by a pick-up to 1.8% in 2021, assuming Johnson reaches a trade deal with the EU that leads to no tariffs and little divergence from EU rules.

“Alongside perennial Brexit uncertainty, (businesses) are also contending with softer global demand,” CBI chief economist Rain Newton-Smith said.

Back in July, the CBI forecast growth of 1.4% this year and 1.5% next.

Make UK halved its forecast for manufacturing growth next year to 0.3% from 0.6%, though it kept its forecast for growth in the overall economy in 2020 unchanged at 1.4%, up from 1.3% this year.

“Export orders have increased slightly this quarter, indicating greater confidence from foreign customers about purchasing UK goods as concerns about an end of year no-deal Brexit fade,” Make UK’s chief executive, Stephen Phipson, said.

Britain’s economy has slowed since the June 2016 referendum decision to leave the European Union, with manufacturing especially hard hit due to concerns about disruption to supply chains, on top of pressures from the U.S.-China trade war.

Johnson’s Brexit plan - which he was unable to pass through parliament before he called an early election on 12 December - sees Britain leaving the EU on 31 January, and then negotiating a new trade deal to take effect at the end of 2020.

Johnson has said he will not allow transitional arrangements to continue beyond the end of 2020, but many trade experts say this leaves too little time to negotiate a good deal.

If a post-EU transition deal expires at the end of 2020 without an agreement settled for future trade ties, the CBI predicted a sharp slowdown in growth in 2021 to just 0.4% - the weakest since the financial crisis.

“A no-deal Brexit would put the brakes on UK growth and realize businesses’ worst fears,” Newton-Smith said.

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UK sends two navy boats to Jersey after France threatens blockade

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The Mont Orgueil Castle is seen behind an island flag at Gorey Harbour in Jersey, in this February 26, 2008 file photo.  REUTERS/Toby Melville

Britain is sending two navy patrol boats to the British Channel Island of Jersey after France suggested it could cut power supplies to the island if its fishermen are not granted full access to UK fishing waters under post-Brexit trading terms, write Richard Lough and Andrew Macaskill.

Prime Minister Boris Johnson pledged his "unwavering support" for the island after he spoke with Jersey officials about the prospect of the French blockade.

Johnson "stressed the urgent need for a de-escalation in tensions," a spokesperson for Johnson said. "As a precautionary measure the UK will be sending two Offshore Patrol Vessels to monitor the situation."

Earlier, France's Seas Minister Annick Girardin said she was "disgusted" to learn that Jersey had issued 41 licences with unilaterally imposed conditions, including the time French fishing vessels could spend in its waters.

"In the (Brexit) deal there are retaliatory measures. Well, we're ready to use them," Girardin told France's National Assembly on Tuesday (4 May).

"Regarding Jersey, I remind you of the delivery of electricity along underwater cables ... Even if it would be regrettable if we had to do it, we'll do it if we have to."

With a population of 108,000, Jersey imports 95% of its electricity from France, with diesel generators and gas turbines providing backup, according to energy news agency S&P Global Platts.

Jersey's government said France and the European Union had expressed their unhappiness with the conditions placed on the issuance of fishing licences.

Jersey’s external relations minister, Ian Gorst, said the island had issued permits in accordance with the post-Brexit trade terms, and that they stipulated any new licence must reflect how much time a vessel had spent in Jersey's waters before Brexit.

"We are entering a new era and it takes time for all to adjust. Jersey has consistently shown its commitment to finding a smooth transition to the new regime," Horst said in a statement.

The rocky island sits 14 miles (23 km) off the northern French coast and 85 miles (140 km) south of Britain's shores.

The French threat is the latest flare-up over fishing rights between the two countries.

Last month, French trawlermen angered by delays to licences to fish in British waters blocked lorries carrying UK-landed fish with burning barricades as they arrived in Boulogne-sur-Mer, Europe’s largest seafood processing centre.

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Brexit barriers in focus as Northern Ireland's DUP kicks off leadership contest

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Democratic Unionist Party's (DUP) Edwin Poots makes a statement to the media outside Stormont Castle in Belfast, Northern Ireland June 28, 2017. REUTERS/Clodagh Kilcoyne/File Photo

Northern' Ireland's biggest party was set for its first ever leadership election after its Westminster chief Jeffrey Donaldson threw his hat into the ring, promising to focus on the divisive issue of post-Brexit trade barriers.

Donaldson will stand against Edwin Poots to lead the Democratic Unionist Party at a time of heightened instability in the British province and unionist anger over the installation of a customs border in the Irish Sea.

Both Donaldson and Poots, Northern Ireland's agriculture minister, stopped short of making detailed campaign promises. But Britain, Ireland and the rest of Europe will be watching for any hardening of stances on Brexit or social issues including abortion that could alter the political balance ahead of elections next year.

The DUP currently leads Northern Ireland in a power-sharing government with its Irish nationalist rivals Sinn Fein.

Donaldson or Poots will take over the leadership from Arlene Foster who announced last week she was stepping down as Northern Ireland's First Minister at the end of June, bowing to pressure from party members unhappy at her leadership. Read more

Her departure has added to instability in the region, where angry young pro-British loyalists rioted in recent weeks, partly over the barriers that they feel have cut them off from the rest of the UK.

"I will develop and swiftly implement an agreed programme of meaningful reform and clear policy direction on key challenges like the protocol," Donaldson said in a video announcement, referring to the post-Brexit trading arrangements.

Like Foster, Donaldson, 58, is a former member of the more moderate Ulster Unionist Party. He was part of the negotiating team that stuck a deal to prop up the government of former British Prime Minister Theresa May in 2017.

Once the DUP's support was no longer needed, May's successor Boris Johnson broke the party's "blood red line" and agreed to erect the trade barriers.

Poots, 55, is one of a number of DUP ministers who have protested against the Brexit arrangements by refusing to attend meetings with Irish counterparts established under the 1998 peace deal that ended 30 years of violence in Northern Ireland.

Poots, a young earth creationist who rejects the theory of evolution, announced he was standing last week.

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Statement by Commission Vice President Maroš Šefčovič following the conclusion of the EU-UK Trade and Co-operation Agreement

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European Commission Vice President Maroš Šefčovič warmly welcomes the ratification of the EU-UK Trade and Co-operation Agreement, which will now be fully applicable as of 1 May 2021. This comes after an overwhelming vote of consent by the European Parliament on 27 April and subsequent Council decision today, thereby concluding the ratification process. The EU and the UK will exchange letters to that effect.  

"The ratification of the Trade and Co-operation Agreement is good news for European citizens and businesses. It provides a solid foundation for our longstanding friendship, co-operation and partnership with the United Kingdom on the basis of shared interests and values.

"In practice, the Agreement helps avoid significant disruptions, while protecting European interests and upholding the integrity of our Single Market. It also ensures a robust level playing field, by maintaining high levels of protection in areas, such as climate and environmental protection, social and labour rights, or state aid. Moreover, the Agreement includes effective enforcement, a binding dispute settlement mechanism and the possibility for both parties to take remedial measures.

"Democratic scrutiny will continue to be key in the implementation phase of the Agreement in order to ensure faithful compliance. Unity among EU institutions and member states will remain a cornerstone during this new chapter in our EU-UK relations." 

Vice President Šefčovič reiterates that the European Commission looks forward to a strong, constructive and collaborative partnership with the United Kingdom, based on mutual trust and respect. We have far more in common than that which divides us. He will reach out this week to Lord David Frost, co-chair of the EU-UK Partnership Council, to prepare the launch of its work, including the work of Specialized Committees.  

Finally, the Commission will continue to work tirelessly for joint solutions so that the Withdrawal Agreement, and the Protocol on Ireland / Northern Ireland in particular, is also fully implemented and works for the benefit of everyone in Northern Ireland.

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