Monthly Archives: June 2020

As the world economy experiences its biggest downturn for a century (Gopinath 2020), it is widely agreed that the policy response to Covid-19 must be decisive and coordinated (Baldwin and Weder di Mauro 2020). Meanwhile, in the UK, where 50% of companies reported a fall in business in April 2020 relative to the past three months, the government continues to negotiate its exit from the EU its biggest trading partner aiming to complete the transition by the end of the year.

Both Covid-19 and Brexit will have a profound impact on economic activity in the UK, but there may be big differences in terms of which sectors they affect. In this column, we show new evidence that the sectors that have been initially most negatively affected by Covid-19 are generally different to those that are affected more by Brexit (De Lyon and Dhingra 2020).

To measure the effects of Covid-19, we use firm-level survey data for April 2020 made available to us through the Confederation of British Industry (CBI). We aggregate this to the sector level to compare with measures of the economic effects of Brexit across UK sectors taken from previous work.

Table 1 shows that there is a negative, if any, correlation between changes in business volumes in April 2020 and the ongoing and expected impacts of Brexit as captured by three different measures. This means that generally the sectors hit by Covid-19 in the first month of lockdown have been different to those expected to be affected by Brexit. This is true regardless of which Brexit measure is used, despite each varying in the time period covered and nature of the specific effect caused by Brexit.

The first of the Brexit measures captures each industrys exposure to the sharp depreciation in the value of the pound on the night of the EU referendum in June 2016. The world trading system has developed over recent decades so that now the majority of world trade is in intermediate goods and services that are used as inputs into production by businesses. Therefore, the devaluation of the pound meant that companies with a high share of imported inputs faced increasing costs to production (Costa et al. 2019). This measure therefore captures effects of Brexit that occurred immediately following the referendum.

The second measure Brexit uncertainty captures business responses to the Decision Maker Panel conducted by the Bank of England concerning uncertainty due to Brexit and the ongoing negotiations in the period following the referendum (Bloom et al. 2019). This measure is contemporary and broad, although it is restricted to highly aggregated industry categories.

The third measure is the outcome of a state-of-the-art trade model and captures the predicted long-term impact of the expected trade relationship between the UK and EU after Brexit (Dhingra et al. 2017). It ignores adjustment effects and focuses only on trade omitting other factors such as foreign investment and migration. It is similar in nature to the governments own economic model but, crucially, contains more detailed industry predictions, allowing for a more thorough comparison with the effects of Covid across sectors.

Table 1 Correlation coefficients for changes in business volume in April with three measures of the current and future effects of Brexit

Notes: The net change in volume of business is the percentage of businesses reporting an increase in volumes in April 2020 relative to the past three months minus the percentage reporting a decrease. The measure is then de-trended by subtracting the corresponding measure for 2019 to account for pre-existing trends. Responses are weighted by firm-size according to employment. We correlate this variable with three measures of Brexit effects. First is the intermediate import value-weighted measure of depreciation on the night of the referendum (Costa et al. 2020). Second is the long-term industry-level forecast of the CEP trade model (Dhingra et al. 2017) and third is the measure of Brexit uncertainty reported by firms (Bloom et al. 2019). Correlations are weighted by industry size and use the relative rankings of each industry. In all cases but one, the weighting and de-trending of the Covid measure does not affect the sign of the correlation.

To explore these cross-industry correlations in detail, Table 2 presents the full ranking of industries according to how positively (top) or negatively (bottom) they have been performing in April 2020 relative to the past three months and their trend of business volumes a year before. We colour each row according to the predicted long-term effect of Brexit with green being the least negatively (or positively) affected sectors and red being most negatively affected with blue being those in between.

One obvious difference that emerges from the list is that Covid has hit hard domestic services such as recreation, hotels and restaurants, which are a large employer in any developed economy, while these are less likely to be directly affected by Brexit policy except through knock-on changes in demand and labour services. Most manufacturing sectors and transport have been less negatively affected, although again there are exceptions within these sectors. The table highlights the double impact that Brexit and Covid can have on the economy. Sectors that have not yet been hit by the lockdown are generally expected to be hit negatively by Brexit.

Table 2 Change in business volume in April and predicted effect of Brexit by industry

Notes: Industries are ranked in terms of net increase in business volume in April 2020 (see notes of Figure 1 for details on this variable). The rows are shaded according to the predicted long-term effect of Brexit (Dhingra et al, 2017): green for top, blue for middle, and red for most negatively affected. Sectors with fewer than 5 businesses in the data in April 2020 are omitted. Industries are ranked from least negatively affected (1) to most negatively affected (20).

In many ways, this is not surprising. The rapid spread of Covid-19 has caused countries across the world to enter lockdown. This has had a huge impact on the functioning of economies on both the demand and supply sides (del Rio-Chanona et al. 2020). Some sectors, such as in-person services, have ceased completely while others, like distribution and some manufacturing, have needed to step in to meet urgent needs arising from the pandemic.

Brexit, on the other hand, will mainly affect the UK economy and will introduce new barriers to trade, migration, and investment with the EU, and a change in its relationship with other countries outside the EU (Baldwin 2016). Tariff and non-tariff barriers that may arise in sectors like automotive, food and professional and financial services could significantly affect the structure and size of the UK economy in the long run, as well as create costly short-term adjustments.

Our analysis highlights the importance of granular economic analysis during these extraordinary times.

As early as 2017, the government had announced that Brexit negotiations would be guided by granular impact assessments across sectors. Sound impact assessments are crucial for good policy design and this is what the government had rightly put forward. Yet the most detailed quantitative impact analysis available from the government to date gives details for just ten broad sector categories.

For example, all of services is split into just three categories. This makes the evidence too scant to adequately guide policymaking and it isnt a surprise that the new policies that the government has announced in its Brexit plans, such as the tariff schedule published recently, have little justification on why certain policy objectives have been chosen.

The changed circumstances due the pandemic make the need for detailed sectoral analysis even more important. It is clear that some sectors are going to see a reduction in market access after the UKs exit from the EU. While they may have withstood a bit of a setback in trade with the EU, a much harder hit at a time of a national and a global slowdown may push them towards being unviable. The current conditions in these industries will be useful in drawing up Brexit plans that are informed by existing circumstances.

The large negative hit from the pandemic has reduced the capacity of the UK economy to take further shocks. The UK is highly integrated with Europe and these linkages are likely to be even more important throughout the pandemic (Baldwin and Freeman 2020). The slowdown of the world economy has also cast another shadow on the idea of a global Britain making up for reductions in EU market access by pursuing opportunities outside the EU.

Our analysis shows that the sectors that will be affected by Brexit and those that are suffering from the Covid-19 pandemic and lockdown are generally different from each other. Rushing Brexit through this year without a new deal in place would therefore broaden the set of sectors that see worsening business conditions.

The EUs Brexit negotiator Michel Barnier has suggested that an extension to the transition period would be possible. The UK Government should think carefully about its policy priorities now; adding Brexit to the table only increases the importance of getting these policies right. Beyond the economics, the EU offers opportunities to help deal with the spread and response to the virus, such as the large-scale scheme to obtain personal protective equipment, which the UK reportedly missed the opportunity to join on three occasions.

As the Covid impacts continue to become clearer over time, the government must move beyond its broad assessment of Brexit impacts to much more finely tuned plans that account for the differences in market conditions and constraints faced by UK businesses in the biggest slowdown of our lifetime.

Authors note: The views expressed in this column are those of its authors and not those of the CBI.

Baldwin, R (2016), Brexit Beckons: Thinking ahead by leading economists, a VoxEU.org eBook, CEPR Press.

Baldwin, R and R Freeman (2020), Trade conflict in the age of Covid-19, VoxEU.org, 22 May.

Baldwin, R and B Weder di Mauro (2020), Introduction, in Mitigating the COVID Economic Crisis: Act Fast and Do Whatever It Takes, a VoxEU.org eBook, CEPR Press.

Bloom, N, P Bunn, S Chen, P Mizen, P Smietanka and G Thwaites (2019), The Impact of Brexit on UK Firms, NBER Working Paper 26218.

Costa, R, S Dhingra and S Machin (2020), Trade and Worker Deskilling: Evidence from the Brexit Vote, CEP Discussion Paper.

De Lyon, J and S Dhingra (2020), How is Covid-19 affecting businesses in the UK?, LSE Business Review, 7 May.

del Rio-Chanona, R M, P Mealy, A Pichler, F Lafond and F Doyne (2020), Predicting the supply and demand shocks of the COVID-19 pandemic: An industry and occupation perspective, VoxEU.org, 16 May.

Dhingra, S, H Huang, G Ottaviano, J P Pessoa, T Sampson and J Van Reenen (2017), The costs and benefits of leaving the EU: trade effects, Economic Policy 32(92): 651705.

Gopinath, G (2020), The Great Lockdown: Worst Economic Downturn Since the Great Depression, IMG blog, 14 April.

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Covid-19 and Brexit: Contrasting sectoral impacts on the UK | VOX, CEPR Policy Portal - voxeu.org

The French President is said to have claimed failure to reach a quick agreement over the blocs pandemic rescue fund could see talks complicated by trade negotiations with Britain. He added that market sensitives required EU leaders to accelerate the process towards a face-to-face showdown next month. Brussels sources said the Frenchman said the fund must include at least 500 billion in grants made available to pandemic-stricken industries and regions.

Mr Macron's efforts to broker a deal were echoed by Angela Merkel, who warned EU leaders that they face the worst recession since the Second World War.

The German Chancellor is said to have expressed concern that her EU colleagues hadnt yet come to terms with the grave situation they find themselves in.

Sources said the veteran leader said the EU faces very, very difficult times in the coming months, and should have the recovery fund in place by the summer.

She added that leaders must organise an in-person summit as soon as possible.

Ahead of the video summit, European Commission President Ursula von der Leyen pleaded with EU leaders to back her recovery plans.

She said: This proposal is ambitious and it is balanced.

Im convinced that for common success, we must stay focused on the big picture. We must all pull together, we cannot afford any delay.

Under the Germans blueprint, eurocrats will borrow 500 billion on international markets before distributing the money as cash grants to the worst-hit countries, regions and industries.

A further 250 billion will be dished out in the form of low-cost loans.

The fund will leave the blocs taxpayers saddled with the debt burden of the coronavirus recovery, with the borrowing expected to be paid back over the next 38 years.

The Commission also wants to introduce a series of new EU taxes, including a level on single-use plastics, a digital tax or a tax on multinationals, to help foot the bill.

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The so-called Frugal Four Austria, Denmark, Sweden and the Netherlands have questioned whether cash should be distributed in loans and not grants.

Austrian chancellor Sebastian Kurz said the recovery fund could create a backdoor to a debt union.

He said the proposed recovery fund must not be a backdoor entry into a debt union.

He added: There must be a time limit.

There must also be a discussion about who pays how much, who benefits most and what conditions are attached to aid.

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In a bid to unlock the talks, Mr Macron suggested he could support cash rebates for the biggest contributors to the EUs long-term budget.

But the French President said he would only back the plan if it is absolutely necessary to get a deal on the recovery plan, according to an EU official.

Italian prime minister Giuseppe Conte took aim at the frugal states, insisting the Commission plan is fair and well balanced it would be a serious mistake to fall below the financial resources already indicated.

The combination of loans and grants is also well constructed. This combination will help us make investments and reforms in order to strengthen the convergence and resilience of the whole Union, he added.

At the start of the video conference, European Parliament President David Sassoli the proposed recovery fund only scratches the surface of what needs to be done.

He said MEPs would not support the deal if aid is offered solely in the form of loans.

He added: "Time is a luxury we cannot afford. We need to act urgently and courageously, as EU citizens, businesses and economies need an immediate response. Our citizens expect bold action. Now it is time for us to deliver."

Continued here:

EU FURY: Macron unleashes new Brexit threat in bid to force through 750billion bailout - Express.co.uk

Former Brexit Party MEP Ann Widdecombe attacked the EU's stance in the Brexit trade talks with the UK. While speaking on Youtube channel Brexit Watch, Ms Widdecombe insisted the EU was afraid of the UK becoming a financial powerhouse, similar to that of Singapore. She argued the EU is negotiating with the intention of protecting itself for the future.

She added the British Brexit negotiators should be aware of this and refuse to bow down to these demands to ensure the UK gets the best deal for itself.

Ms Widdecombe said: "I will tell you exactly what the EU has been afraid of.

"I will tell you what the EU has been terrified of throughout Brexit even before coronavirus.

"They are terrified of a Singapore on their doorstep.

DON'T MISS:EU MUST cave: Expert hits out at Brussels 'extreme' stance on fishing

"They are afraid of a Singapore right on the doorstep of the EU."

Ms Widdecombe expressed how she felt about the EU's demands for a level playing field agreement by the UK.

She said: "Because they are afraid that is why they are insisting on a level playing field.

"Level playing field my foot, we have left and we are not on a level playing field.

"That is why it is trying to insist on that, they are trying to ensure that we are not going to be able to compete on unequal terms."

She added: "They want to protect their own position, what it is all about, protecting the EU.

"Well frankly no, I want to protect Britain."

READ MORE:

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The Brexit trade negotiations between the UK and EU have been a standstill for the past few weeks with no major leeway being made.

However Prime Minister Boris Johnson has insisted he intends for the talks to speed up.

He has claimed both the UK and EU must ramp up discussions to keep to the current timetable and ensure an agreement is made.

Despite this, it still remains clear when breakthroughs will come during the talks as both sides remain firm on their demands and expectations.

The rest is here:

EU 'terrified' of successful UK 'on its doorstep' says Widdecombe in brutal Brexit warning - Express.co.uk

TheConservative MP for Great Grimsby told Express.co.uk there will be red lines regarding UK fisheries during negotiations over a post-Brexit trade agreement. Ms Nici added the UKwants to be able to decide who can and cannot fish in British waters.

Ms Nici said: "We do have red lines with our fisheries and coming from the Great Grimsby constituency that is absolutely vital for us.

"We want our quotas back, we want to be able to decide where our quotas go and who may or may not fish in our waters.

"I am sure there are ways and means of doing that which will work for everyone."

She continued: "The fact of the matter is we have less quota from our own UK owned fisheries than they do in EU owned fishing vessels.

READ MORE:Brexit bombshell: Chance of no deal 'higher than ever'

"We need to address that balance.

"We have been working on the common fisheries policy which was set up in the 1970s.

"We need to make sure we are getting that rebalance so we can rebuild our own fishing industry in our own waters."

During the same interview with Express.co.uk Ms Lici told Michel Barnierto "wind his neck in" and get on with sensible negotiations over a post-Brexit trade deal.

TheConservative MP stated thatMr Barnier is full of bluster and threats regarding Britain's fishing waters.

Ms Nici also warned the EU's chief Brexit negotiator that the UK holds the cards during the trade talks.

The Conservative MP said: "Mr Barnier is full of bluster and threats.

"We have the cards, we are a sovereign nation and we have our fishing waters.

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"At this point the EU fishing vessels are able to fish in our waters but that doesnt have to continue if we cant get on with a sensible deal.

"In my Grimsby words, Mr Barnier needs to wind his neck in and get on with some sensible negotiations."

In June 2016 the UK voted to leave the European Union. The UK officially left the European Union at the end of January this year.

Britain is currently in a transition period until the end of 2020 with the EU while the government negotiates a free trade deal with the bloc.

The transition will come to an end at the end of 2020. Boris Johnson has ruled out extending the transition period, despite the ongoing coronavirus crisis.

More:

Brexit warning: Conservative MP outlines red lines for UK fishing industry in EU talks - Express

Issued on: 18/06/2020 - 15:49Modified: 18/06/2020 - 15:49

As Europe focuses on reopening its economies after the peak of the Covid-19 crisis, there are other dark clouds on the horizon as the UK and the EU look ever more divergent over the type of relationship they want in future. We speak to the prime minister of the EU's wealthiest member state, Luxembourg. Xavier Bettel tells FRANCE 24 he sees the British government as going back on agreements it put into the Political Declaration, which was meant to form a basis for the final deal.

Bettel also explains why he believes that when it comes to coronavirus,"we haven't won the fight yet, but we've won the first round".

Meanwhile, on the proposed 750 billion EU Recovery Plan, the Luxembourgish prime minister explains why he believes the proposal is "balanced".

Produced by Isabelle Romero, Mathilde Bnzet, and Perrine Desplats

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Talking Europe - Luxembourg's PM on Brexit talks: 'Boris Johnson is disagreeing with his own position' - FRANCE 24

In a mass show of support for British farming and food production, over one million people have signed NFUs petition urging the Government to secure future trade deals in favour of the countrys growers and producers.

The petition comes as Government failed to secure a deal with the European Union that would uphold the standards of British farming and food production. Currently, deals look likely to lead to an increase in low-quality food imports that would be deemed illegal to produce in the UK.

In just two weeks, NFU amassed an overwhelming amount of support for its petition. Whats more, 78,000 people have written to their MP also urging them to support the introduction of a Trade, Food and Farming Standards Commission to review trade policy and create solutions that would hold all imported foods to the UKs high standards.

NFU President Minette Batters said: It has been overwhelming to see this volume of support. The fact that more than one million people have signed a petition urging the government to put into law rules that prevent food being imported to the UK which is produced in ways that would be illegal here is a clear signal of how passionate the British public feel about this issue.

It is now clear that it is simply not credible for the Government to continue to just pay lip service to this issue, when there is such public support for action. They must now give guarantees to the British people that they have listened to their concerns and will make firm commitments to address them.

Trade policy is complicated, but what the public is telling us is quite simple: they care deeply about their food, where it comes from and how it is produced.

They do not want to see chlorinated chicken or hormone-fed beef on their supermarket shelves, nor do they want to see food imported which has been produced in lower welfare or environmental systems than is legally allowed in this country. Farmers, animal welfare groups, environmentalists and now the public have made their voices clear.

There is a simple solution that we are presenting: the introduction of a Trade, Food and Farming Standards Commission. This would be an independent body that can review trade policy and ensure all of our food imports are held to the same standards expected of British farmers.

Given the clear commitments in the Conservative Party manifesto that they will not compromise British farmings high standards, is it not a logical next step to put in place a panel of experts that can carry out that direction?

These are decisions that will leave a legacy for decades and generations to come. It is so important that we get this right. Access to safe, traceable, affordable and nutritious food produced to the highest standards should be a right for all. We must not throw that away in the pursuit of free trade.

Link:

Farmers and producers receive overwhelming support from British public ahead of Brexit | News - Speciality Food

Brexit negotiations have not been materially influenced by Scotland, Wales or Northern Ireland and any consultation by Westminster has served only as window dressing, devolved leaders have claimed.

In a scathing attack, Europe minister Jenny Gilruth said there had been no meaningful input from the devolved administrations in talks, and on fisheries she claimed Whitehall had ruled out keeping the Scottish Government in the loop.

The comments come just days after the UK Government rejected calls from the Scottish and Welsh first ministers to extend the Brexit transition period.

Nicola Sturgeon and Mark Drakeford argued in a letter to Boris Johnson that a delay was needed in order to support businesses through their recovery from the coronavirus pandemic.

But Michael Gove confirmed there would be no extension beyond December 31.

Ms Gilruth, appearing at an Institute for Government event, said an extension would give business time to plan.

Well do the best we can, but we are being hampered by not knowing what we need to implement because its still being negotiated, and its being negotiated at ridiculously tight timescales.

She added: I think, from a Scottish perspective, it should be said that we have paused our work on independence to focus on the coronavirus crisis; its really deeply regrettable that the UK Government has not paused their work on Brexit to focus on saving lives.

The minister said that the Scottish Government wanted to reboot the way cross-governmental discussions were held.

Were asking for a reboot in the way the UK Government involves the devolved governments in the Brexit process; were not looking for read-outs, we need to have more of a proactive and meaningful discussion, she said.

Our view is that engagement between the UK Government and the devolved governments has often only served as window dressing rather than playing any meaningful role.

Citing fisheries specifically, she said: We tried to get movement on fisheries and requested that our officials were in the room, that has been ruled out.

Its really worrying that these talks are now going to go into detail without us being in the room on that matter.

Welsh Europe minister Jeremy Miles, appearing before the same panel, said: The promise was that once we got beyond the withdrawal agreement, that we would be in the sunlit uplands of closer engagement.

If anything, engagement has become worse and certainly worse jobs under the Johnson government than under the May government.

However this negotiation turns out, for good or ill, it will have been the UK Governments negotiation, theres no sense in which it has been materially influenced by the devolved governments.

The UK Government was contacted for comment.

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Westminster's actions mean devolved governments have had 'no meaningful input' in Brexit trade talks - Press and Journal

The Prime Ministers attempts to show his understanding of Aussies and New Zealanders fell flat this week as have his attempts for post-Brexit trade

While campaigning to become leader of the Conservative Party last year, Boris Johnson made a fascinating and telling remark in an interview with the Spectator that was largely missed at the time.

Brexit, he said, had been informed byloads of people in parts of Oppidan Britain [having] a sense that their lives and their futures werent important.

Before you start reaching for Google, let me explain.

At Eton, Johnson was a Kings Scholar one of the 70 boys who make up the elite within the elite of the most gifted and thus entitled pupils in arguably the most exclusive private school on Earth. Kings Scholars call other boys Oppidans from the Latin word oppidum meaning townie. At other public schools, that derogatory term is used to refer to the local people who dont attend the institution. At Eton, it is used by the academic crme de la crme to describe those who they deem to be intellectually if not socially inferior.

Now of course when Johnson used the word he was not referring to Old Etonian Brexiters. He was using Oppidan in its broader sense to suggest that the Conservative Party had to reach out to the working people of Britain who had voted to leave the European Union. His use of the term is telling because it suggests that our Prime Minister views this 52% and perhaps all of us as little more than townies.

This week, the Prime Minister addressed us Oppidans directly in two films that set out the Governments plans for free trade agreements with Australia and New Zealand.

It was classic Johnson. The nation may have lost 42,000 lives to COVID-19 according to the Governments figures and be facing down the real possibility of a catastrophic no deal Brexit. But there is always time for frivolity.

The first broadcast kicked off with Johnson waving a packet of Aussie Tim Tam biscuits while helpfully informing us that we already trade with Australia and even drink their wine. The address was light on detail and big on absurdity. The humorous contempt in which public schoolboys hold townies is as nothing compared to that which they reserve for Antipodeans.

The Prime Minister is an unserious man at the best of times, but in his hands this deal was reduced to a series of crude tropes and caricatures. His reference points conjured up images of a Crocodile Dundee Australia, dotted with lovable idiots in dangly cork hats, drinking VB and tossing shrimps on barbies.

Then he turned to New Zealand and things got even worse. Its exports to the UK included orcs and hobbits and Oyster Bay wine, he said, before claiming that there is so much more that we could do together.

No mention of any detail was made in either video and there was a reason for that.

The Tim Tams and the Orcs were for domestic consumption a desperate attempt to divert from two deals that have all the substance of a packet of fairy cakes.

The Brexiters always claimed that we would only be able to trade with the rest of the world and reconnect with the Commonwealth if we broke free from the clutches of the EU, but it was a lie.

Since 2018, the EU has been negotiating FTAs with both New Zealand and Australia and talks are fairly advanced. By quitting the EU, the UK has removed itself from those negotiations to begin again from a weaker position, further back in the queue.

That presents a massive headache for New Zealand and Australia. Both nations want to prioritise a deal with the much larger EU but now have to go through the unnecessary rigmarole of more negotiations, simply to satisfy Britains imperial vanity.

Johnsons patronising tone and Tim Tam waving wont have helped matters. Twitter users in Australasia, including the veteran New Zealand actor Sam Neill, took offence at the British Prime Ministers condescending tone which seemed to sum up all the very worst excesses of British colonial arrogance.

The Brexit Conservatives are desperate. Desperate for good news and desperate to sell the line that a deal with our old Commonwealth friends is a replacement for our relationship with the EU. Unfortunately, the numbers simply dont add up. However it is spun, there is no equivalence to be made.

Total UK exports to the EU are worth 297 billion a year. Total UK exports to Australia and New Zealand are worth just 6.5 billion. The UK does 10 times more trade with Ireland than it does with New Zealand. And, while all trade is to be welcomed, FTAs dont always benefit both parties equally. In the case of New Zealand, the UK probably wont benefit economically at all. A Government commissioned strategic outline has suggested that, while benefitting the Kiwis, a UK-NZ FTA will have close to zero effect on British GDP and might even make it shrink.

A deal with Australia would fare slightly better, perhaps adding as much as 900 million to the UK economy, in a best-case scenario. That sounds great until one works out that this is an increase of just 0.03% in GDP roughly akin to the turnover of Harrods department store in Knightsbridge.

There is anyway little appetite for increased trade with the UK in either Australia or New Zealand. Both nations now see their destiny in trade with east Asian nations and the EU FTA promises to open up a far larger market than anything the UK can offer. The Ladybird libertarians who set out the case for Brexit were so busy staring at their navels and dreaming of Cecil Rhodes statues that they forgot to ask the members of the Commonwealth if they were on board with the whole Empire 2.0 plan. And they clearly are not.

Brexit was always based on shoddy economics and sold by a wealthy elite to people who didnt understand numbers. None of it or any of these deals are rooted in logic or even common sense. But, as Boris Johnson flies about the world in his Brexit jet surveying the Oppidans beneath him, one has to wonder if he really gives a f*ck. Hes head boy now and thats all that matters.

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Johnson & Brexit Patronising Etonian Alienates the World Byline Times - Byline Times

I NOTE the concerns of Michael Knox (Craven Herald Letters, June 11) - about our economy after the end of the Brexit transition period, but I must challenge him on his impartiality over us leaving the EU.

He places great emphasis on the findings of reports from 'Best for Britain' and the 'Social Market Foundation' about the impact on trade post Brexit. Yet he should make clear that Best for Britain is a campaign group that was against Brexit, it's chaired by a former Labour minister and was co-founded by Gina Miller.

The Social Market Foundation, a 'think tank' is supposed to be entirely independent, but is chaired by someone with close links to the Guardian and Observer, prominent opponents of Brexit and aligned to the Liberal Democrats.

I agree, as I'm sure we all do, that forging a way forward as an independent state, in trade especially, has been made more difficult on the back of a pandemic, but business needs 'certainty' more than ever, to recover the economy, as agreed by the CBI; extending the transition period any further will make matters so much worse.

Moreover, we will need every penny of public money we can muster to prevent the collapse of our economy. For instance, we shouldn't be paying any more 'fees' to the EU, and still bound by its rules eg. on state aid, which has been, and will continue to be, vital for pandemic recovery.

Of course a fair trade deal, like Canada's, that recognises our competitive independence, would be ideal, but the EU seems determined not to allow a new 'sovereign state' to prosper.

We are slowly, but securely and safely, overcoming the coronavirus crisis and many economists predict that we may well 'bounce back' with new energy, innovation and job creation. Let's not let that 'rehabilitation' be compromised by any further unnecessary political interference from the EU.

D. Brooks

Embsay.

Excerpt from:

Letter: Let's not let post Brexit 'rehabilitation' be compromised by any further unnecessary political interference from the EU. - Craven Herald

Pound to US Dollar (GBP/USD) Exchange Rate Hit by Coronavirus, BoE, Brexit

The Pound Sterling to US Dollar (GBP/USD) exchange rate is on track to end this week lower. It comes as a variety of factors weigh on the Pound (GBP). Meanwhile, the US Dollar (USD) finds support in global coronavirus concerns.

After opening this week at the interbank level of 1.25, GBP/USD trended higher for a few days. Since yesterday though, GBP/USD has come under fresh pressure.

GBP/USD shed over a cent yesterday alone, tumbling to the interbank level of 1.24. This was the lowest level for the pair since the beginning of the month.

At the time of writing on Friday, GBP/USD continues to trend in the 1.24 region.

This morning saw the publication of Britains May retail sales results. The data showed a bigger than expected rebound in activity. Retail sales jumped 12% in May following the 18% contraction in April.

Analysts noted that this optimistic monthly reading still contrasted with a gloomy 13.1% yearly-reading. This figure was also much better than forecast, however.

Other factors continue to weigh on Sterling (GBP) too.

The Pound was hit yesterday, by news that the Bank of England (BoE) was hesitant to do whatever it takes to support Britains economy. The bank has also still not ruled out negative interest rates.

The US Dollar (USD) seems on track to register gains this week. Fears of a potential second wave of coronavirus infections are rising, and investors are looking for safer assets as a result.

The US Dollar is traditionally a safe haven currency. While its appeal has been softened by concerns over how the US economy will be impacted by the coronavirus pandemic, it is still benefitting from safe haven demand today.

There has been a rise in infections in major economies this week.

According to Analysts from Commerzbank:

Even if we do not see a second wave, a renewed rise in infection numbers illustrates that things are not going to return to normal for a long time

The bad news just keeps stacking up on the Pound (GBP) lately. As a result, its unlikely that the British currency will find much ground next week unless upcoming UK data is highly impressive.

Britains June PMI projections will be published on Tuesday. If the data beatsforecastsit could bolster hopes that Britains economy is rebounding from the coronavirus pandemic.

However, due to criticism over the government and Bank of Englands (BoE) handlings of the pandemic, Sterling could remain weak even if data impresses.

On the other hand, weak UK PMI data could knock Sterling down even lower.

The US economic outlook remains filled with coronavirus concerns as well.

However, if global second wave fears continue to worsen, investors may be more and more eager to buy safe havens.

US PMI data and growth results due next week could also influence the Pound to US Dollar (GBP/USD) exchange rate.

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Bank of England and Brexit Weigh on Pound Sterling to US Dollar (GBP/USD) - TorFX News