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Category Archives: Brexit

Pound near two-week lows on fears of second virus wave, Brexit meeting eyed – Reuters

Posted: June 17, 2020 at 1:47 am

LONDON(Reuters) - Sterling steadied near two-week lows against the dollar and euro on Monday as fears of a second wave of coronavirus hit risk sentiment and global markets, with investors also nervous ahead of a key meeting on Brexit negotiations.

FILE PHOTO: UK pound coin plunges into water in this illustration picture, October 26, 2017. Picture taken October 26, 2017. REUTERS/Dado Ruvic

A fresh coronavirus outbreak in China and rising infection numbers in the United States even as major economies have begun lifting lockdowns put financial markets on the back foot at the start of the week, with selling of stocks and risk currencies across the board.

The pound also took a beating, falling for a third straight session to as low as $1.2455 its lowest since June 1 in Asian trading hours. It last steadied against the dollar at $1.2548 by 1604 GMT, up 0.1%.

It also rose 0.1% to the euro, at 89.80 pence.

The pound remains highly sensitive to changes in the external risk environment and is likely to continue trading on a corrective path lower, in line with cross-asset markets, said Viraj Patel, FX and global macro strategist at Arkera.

The curveball provided by intensified Brexit talks today is unlikely to offset the gloomy outlook however, we expect the pound to remain sensitive to any headline Brexit risks over the coming weeks.

Leaders from Britain and the European Union agreed on Monday that talks on their future relationship should be stepped up to clinch a deal, with Prime Minister Boris Johnson suggesting an agreement could be reached in July with a bit of oomph.

Earlier, after a video conference between Johnson, European Commission President Ursula von der Leyen and the leaders of the European Council and European Parliament, the two sides said they agreed ... that new momentum was required.

With a status-quo transition deal set to run out at the end of the year, Britain is seeking a free trade agreement with the EU, which it left on Jan. 31, but negotiators have so far made little progress.

We are sceptical that the two sides will find a breakthrough in the deadlocked negotiations especially on a possible extension of the transition period, which expires at the end of the year, said Lars Sparres Merklin, senior analyst, FX strategy in a note to clients.

This extension needs to be agreed upon before 1 July if the two sides should be able to extend the transition period at a later stage in the fall.

Speculators reduced their net short position on the pound in the week to last Tuesday, data from the Commodity Futures Trading Commission showed. [IMM/FX] [CFTC/]

This week, investors also will look ahead to the Bank of Englands meeting on Thursday, where it is expected to announce a fresh increase of at least 100 billion pounds ($126 billion) in its bond-buying firepower.

Bank of England Governor Andrew Bailey said the British central bank had to be ready to do more to help the countrys economy because of the risk of long-term damage caused by the coronavirus shutdown.

Reporting by Ritvik Carvalho; Editing by Catherine Evans

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EU and UK urged not to ‘indulge in a blame game’ over deadlocked Brexit talks – The Parliament Magazine

Posted: at 1:46 am

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EPP deputy Christophe Hansen is, alongside Kati Piri, co-rapporteur of a report on Brexit that will be debated in plenary on Wednesday and voted on by MEPs the following day. Brexit is also on the agenda of Friday's EU summit.

Speaking to The Parliament Magazine ahead of the vote and summit, Hansen also suggested that a new method should be found for the remaining rounds of negotiations between the two sides.

He says the current methodology has so far failed to bring about any success in breaking the deadlock on thorny issues like fisheries.

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Another key problematic area is the so-called level playing field on trade, which Hansen says is not some ideological concept but, rather, a pre-requisite for any eventual deal.

I think we need to be explicit about what level playing field actually means because there seems to be a lot of misunderstanding about it at the moment, he said.

The discussions so far have not been very constructive and everyone knows that. But that could be because there have not really been what I would call real talks. All we have had are the two sides camping on their original positions

The EU was seeking, in the talks, similar standards from the UK in areas such as environmental protection, financial affairs and labour rights.

But similar does not mean identical. It just means having a similar level of ambition.

He continued, The discussions so far have not been very constructive and everyone knows that. But that could be because there have not really been what I would call real talks. All we have had are the two sides camping on their original positions.

Mondays high-level conference between Boris Johnson and Ursula von der Leyen was, he said, a chance to take stock of the talks so far but he admitted, It is clear that, so far, there has been no significant progress.

The video conference agreed that new momentum needs to be injected into the discussions if a deal is to be agreed.

But Hansen questioned if the current way the talks are conducted was efficient.

It seems there are 11 or 12 parallel talks going on at the same time so, given the lack of progress, you have to ask if this is the right way to do things. I think we should consider a new modus of negotiating so that there are not 11 or 12 blocks of talks.

Hansen says the Parliament has to be at the centre of the talks because it must give the green light to any deal.

We do not want to be asked to merely sign a blank cheque.

It seems there are 11 or 12 parallel talks going on at the same time so, given the lack of progress, you have to ask if this is the right way to do things. I think we should consider a new modus of negotiating

He also says the details of any deal have to be agreed by the end of October so that there is time for the agreement to pass through the parliamentary legislative process.

It is clear, therefore, that there is still a lot of work to do.

He also believes EU chief Brexit negotiator Michel Barnier is the right man in the right place and adds, Remember, it takes two to tango - you cannot do this without the other side.

Calling for constructive discussions in the remaining rounds of talks over the summer, he wants both sides to find common ground.

But he warns, Lets be clear: our economies will suffer and there will be disruption, not least because of the Coronavirus pandemic, with or without a deal.

He also believes it would have been common sense and wise for the talks to be extended beyond 31 December, something the UK has now finally ruled out.

Hansen, one of 12 MEPs on the UK Coordination Group (UKCG), said, Now is not the time for blame games. The UK does not want an extension so we must now deal with the timeframe we have.

In the draft resolution going to plenary, MEPs regret that no real progress has been achieved so far and that the divergences remain substantial.

They warn against the UK governments current piecemeal approach and emphasise that a comprehensive agreement is in the interest of both parties. Having the UK cherry-pick certain policies and its access to the single market after Brexit is unacceptable for the EU, says the text.

Now is not the time for blame games. The UK does not want an extension so we must now deal with the timeframe we have

The draft resolution also reiterates Parliaments full support for the EUs chief Brexit negotiator Michel Barnier in his talks with the UK, based on the political mandate given to him by the EU Member States and Parliament resolutions.

The faithful implementation of the Withdrawal Agreement, including on citizens rights is a precondition to ensure the trust needed to conclude a deal on the future relationship, notes the text.

The text emphasises that Parliaments consent to any future trade agreement with the UK is conditional on the British government agreeing to a level playing field (common rules and standards) in the area of, among others, environmental protection, labour standards, and state aid, and on the conclusion of an agreement on fisheries.

The UK has so far not engaged in negotiations on the provisions ensuring equal competition, the draft notes.

The draft resolution, involving input from 17 specialised committees and Parliaments UKCG, was passed last Friday by 85 votes in favour, six against and 17 abstentions.

The six who voted against were Manu Pineda (GUE), Roman Haider, Lars Patrick Berg, Maximilian Krah, Harald Vilimsky (all four ID) and Demetris Papadakis (NI).

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Top British stocks to load up on before and after Brexit – Yahoo Finance UK

Posted: at 1:46 am

As we all know, the risks of a hard Brexit are extremely high. But it doesnt mean that investors should avoid Footsie shares. Instead, they should add purely domestic stocks to their portfolios.

It looks like the UKs government has taken a hard stance towards negotiations with the EU. There are certain points that the UK and the EU simply cannot agree on. For example, they cannot reach a compromise on fishing rights. It seems that the negotiations might go on for a long time. But the most serious problem is the December deadline, I think. The British government and Parliament simply do not want to extend it. So, I think the chances of a hard Brexit are quite high. But dont worry! You can hedge against this risk by buying some purely domestic companies shares. What do I mean by this? Well, these companies rely on the UKs consumers and not the EUs markets.

As my colleague Jonathan Smith pointed out, purely domestic shares should be bought as a hedge against a hard Brexit. I agree with him. Some of the stocks Jonathan mentioned seem to be less risky than others.

Taylor Wimpey is a housebuilding firm. Since it has little to do with the EU, it could look like it is less of a risk than many Footsie companies. However, there is a rather indirect link between the company and the Brexit. Many economists argue that a hard Brexit would lead to a long-lasting recession. If they are right, then a recession would lead to a dramatic fall in peoples incomes and savings. As a result, they would have much less cash available to spend on houses and flats. So, the demand for Taylor Wimpeys services would decline, leading to a significant reduction in the firms revenue and profits.

In my view, supermarkets are by far a much better alternative to housebuilders if a hard Brexit takes place. This is because supermarkets sell groceries and other essentials. Obviously, consumers have to eat and buy hygiene items regardless of their incomes. Moreover, this type of goods also takes a relatively small proportion of peoples incomes. So, they will not significantly reduce their spending on the goods sold by largest UK supermarkets. Finally, supermarkets like Tesco and J Sainsburyare not overexposed to the EUs markets either. All this makes this sector a rather risk-free bet in case of a hard Brexit. But the question is whether to choose Tescos or J Sainsburys shares.

I think that Tesco is a better alternative to Sainsbury. First of all, the former is much larger. Sainsburys sales revenue in 2019 was a little bit above 28bn as opposed to Tescos sales of over 63bn. Moreover, Tescos net profit margin, a key efficiency indicator, is 1.5% compared to Sainsburys net profit margin of 0.5%. Then, Sainsburys price-to-earnings-before special-items ratio is 33 as opposed to Tescos 23. This means that Sainsbury is more overvalued than Tesco.

So, my choice among these British shares is definitely Tesco. However, I dont think that an investor should only focus on purely British shares. There are many other FTSE 100 companies that can surely survive and flourish even during a tough recession.

The post Top British stocks to load up on before and after Brexit appeared first on The Motley Fool UK.

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Anna Sokolidou has no position in any of the shares mentioned in this article. The Motley Fool UK has recommended Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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Letter: Brexit transition period extension needed before we end up with No Deal Brexit – On The Wight

Posted: at 1:46 am

OnTheWight always welcomes a Letter to the Editor to share with our readers unsurprisingly they dont always reflect the views of this publication. If you have something youd like to share,get in touchand of course, your considered comments are welcome below.

This letter from Joanna Minchin. Ed

I am perplexed as to why the Tory Government are not willing to extend the transition period for their discussions over Brexit? Surely it is in everyones interest to reach a deal?

We are at a critical time for our country.While the Government is occupied with Covid-19, the end of the Brexit transition period is drawing nearer.

There is now less than one month for the UK and the EU to agree an extension.

Heading towards a No Deal Brexit If no agreement is reached, we risk a No Deal Brexit that would alter our economy, way of life, and NHS forever.

We should tackle one problem at a time. We need to extend the transition period.

Image: dullhunk under CC BY 2.0

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Marcus Rashford and Brexit deal feature on varied front pages – ITV News

Posted: at 1:46 am

Brexit is back on the front pages on Tuesday, along with a range of other topics including schools and racial inequalities.

The Financial Times says Boris Johnson and the EU have pledged a revival in talks to seal a post-Brexit deal.

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And the Daily Express says Mr Johnson has vowed there will be a Brexit deal by July.

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The Daily Telegraph leads with William Hague saying the lockdown has been a disaster for society.

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And the Daily Mail splashes with a story on claims of a cash for favours case involving Tory minister Robert Jenrick and a property tycoon.

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Elsewhere, the Daily Mirror backs footballer Marcus Rashford, in no uncertain terms, in his call for Mr Johnson to reverse the Governments decision not to extend free school meals during the summer holidays, calling it a battle of hero versus a zero.

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The Times says children are missing out on education during the coronavirus crisis, with an average of just two-and-a-half hours a day spent on schooling during the lockdown, according to The Times.

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The Guardian leads with a story saying the Downing Street adviser who is setting up the Government commission on racial inequalities has denied institutional racism exists.

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While The Independent reports on calls for more decisive action on inequality in asking: Does Britain need yet another race review?

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Metro and the i report on crowds flocking to shops on Monday.

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And the Daily Star says there could be as many as 36 alien races in our galaxy.

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Marcus Rashford and Brexit deal feature on varied front pages - ITV News

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Government urged to divert Brexit festival money to funding free school meals over summer – The New European

Posted: at 1:46 am

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PUBLISHED: 13:38 16 June 2020 | UPDATED: 15:15 16 June 2020

Adrian Zorzut

Boris Johnson's government has been accused of syphoning off funds that could go towards continuing school lunches over the summer to a Brexit festival; PA Photo, Yui Mok/PA Wire

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Almost four years after its creation The New European goes from strength to strength across print and online, offering a pro-European perspective on Brexit and reporting on the political response to the coronavirus outbreak, climate change and international politics. But we can only continue to grow with your support.

The Liberal Democrats have accused Boris Johnson of being callous and heatless after going ahead with plans to divert 120 million that could feed hundreds of thousands of disadvantaged children during the summer holidays on a party to commemorate Brexit.

Lib Dems education spokesperson, Layla Moran, made the intervention ahead of an opposition debate today on calls to extend free school meals during the coronavirus outbreak.

Downing Street recently confirmed that the Festival for Brexit will be going ahead in 2022, with 120 million of taxpayers money earmarked for the event.

This is the precise amount it would have cost to extend free school meals to all eligible pupils over the six-week summer holiday.

The government has since backtracked on its commitment not to fund school lunches during the holidays in an announcement over the last hour.

Speaking on the issue, Moran said: Leaving children hungry while ploughing millions into Brexit propaganda is callous and heartless. This appalling waste of money shows where the governments priorities lie.

Its not rocket science. If the government can spend 120 million on a Brexit festival, they could easily spend the same on ensuring the most disadvantaged children have enough to eat over the summer holidays.

She added:It is about time that the education secretary went to the training ground with Marcus Rashford to take some lessons on how best to support the most vulnerable pupils.

Almost four years after its creation The New European goes from strength to strength across print and online, offering a pro-European perspective on Brexit and reporting on the political response to the coronavirus outbreak, climate change and international politics. But we can only rebalance the right wing extremes of much of the UK national press with your support. If you value what we are doing, you can help us by making a contribution to the cost of our journalism.

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‘Let’s Get It Done,’ Johnson Says of Brexit Trade Deal – The New York Times

Posted: at 1:46 am

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transcript

transcript

The faster we can do this, the better. We see no reason why you shouldnt get that done in July, and the issue is very clear. We fought an election based on these ideas, the manifesto was very clear, no role for the court of justice, we cant follow E.U. law I dont think people understand that we cant leave the E.U. and remain somehow controlled by E.U. law. That isnt going to work. But there is a good deal to be done. I didnt think Id want to see, I certainly dont want to see it going on until the autumn, winter, as I think perhaps in Brussels they would like. I dont see any point in that. So lets get it done.

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UK Government must stand up to their Brexit commitments Arlene Foster – Belfast Telegraph

Posted: at 1:46 am

Northern Irelands First Minister has urged the UK Government to stand up to their Brexit commitments.

rlene Foster conceded she does not like the Northern Ireland Protocol, which will see UK authorities apply EU customs rules to goods entering the region, but has accepted it is a legislative reality.

However she said the UK Government must stand up to commitments made in its command paper.

Some unionists have expressed concerns that the protocol creates a border down the Irish Sea.

We must make sure that there is unfettered access, as it says in the UK Government command paperArlene Foster

Mrs Foster was challenged over accepting the protocol, at Stormont on Tuesday, by Traditional Unionist Voice party leader Jim Allister.

Does she no longer fear or think that it will create constitutional and economic damage of a catastrophic nature, he said.

The First Minister responded: There is not much point in standing and saying we dont accept the protocol, when the protocol is legislative reality.

I may not like it, I dont like it, lets be very clear about that.

But my job now as First Minister is to try and make sure that we minimise any checks between Great Britain and Northern Ireland, because obviously there are checks at the moment, SPS checks between Great Britain and Northern Ireland, but we have to make sure that those are kept to a minimum.

We must make sure that there is unfettered access, as it says in the UK Government command paper.

We will, very much, want to see the Government standing up to what their commitments are in the command paper.

Mrs Foster also responded to a question from Sinn Fein MLA Catherine Kelly, asking for an update on the implementation of the protocol.

She said that work is under way on aspects within Stormonts remit, such as agri-food requirements.

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Swindon ‘likely to be among hardest hit’ by Covid and Brexit – Swindon Advertiser

Posted: at 1:46 am

SWINDON may be among the places hit hardest by the fallout from a combination of coronavirus and Brexit, it has been suggested.

One report, by the international Organisation for Economic Co-operation and Development, says the UK's economy will be one of the most affected by the shutdown introduced to stop the spread of Covid-19.

A separate report, by the Social Market Foundation think-tanks, puts Swindon is in the top 10 council areas in the UK which could most vulnerable to a combination of the lockdown and the impact of the UK leaving the EU.

The OECD report into the world economy in June says Italy, France and the UK could all suffer a 12 per cent decline in gross domestic product, with that increasing to 14 per cent if there is a second wave of the virus.

It said: The United Kingdom has been relatively hard hit by the Covid-19 crisis. Transmission within the UK was first documented on February 28 and the virus has spread rapidly.

"As a service-based economy, the UK is heavily affected by the crisis. Trade, tourism, real estate and hospitality are all hard hit by confinement restrictions.

The Social Market Foundation report says the places most likely to be badly affected are those with an economy more reliant on manufacturing and finance, baking and insurance.

It says 56 per cent of Swindons Gross Value Added a measure of a places net economic contribution is dependent on a combination of manufacturing and finance and insurance.

The town is home two significant car plants at Honda and BMW-Mini and is the headquarters for major financial institutions like Zurich and Nationwide.

The think-tank says 37,400 jobs 34 per cent of the total in the borough are in manufacturing or the finance and insurance sector. It says these have been impacted by coronavirus and will particularly feel the force of a no-deal Brexit.

The leader of the council's Labour group Jim Grant said: Swindon faces an economic challenge bigger than the one it faced in the 1980s when the railway works closed. At that time, we had a council with the vision and courage to make decisions which transformed the economic base of the town.

The time has come for a council with equal vision and courage to regenerate Swindon based on a green economic future. It will need not only to solve these immediate problems but also start to combat those future ones which will be caused by climate change.

Swindons recovery from the pandemic in a post-Brexit future will require activity from local government in the education sector as well as action from the national government to help local governments, such as Swindons, to protect their local economies and jobs.

"The Labour group will continue to press for the widest possible engagement between ourselves, the public and the administration in the post Covid-19 recovery process.

Council leader David Renard has taken responsibility for the towns economic recovery.

He said: There is no doubt the coronavirus pandemic will have a major impact on economies and countries across the world.

Our focus at the council is to ensure that here in Swindon we bounce back as quickly as possible. The signs so far are incredibly positive with companies already identifying our town as the ideal place to invest and create jobs.

"Only last week developer Panattoni was granted planning permission to invest 400m at our new employment site at Symmetry Park, creating more than 2,000 jobs. This is in addition to the 17m Whitbread plans to spend on a new Premier Inn and restaurants in the town centre and Zurichs new 35m office block which will ensure one of our major employers remains in Swindon for years to come.

We also have exciting plans for Kimmerfields and the town centre, not to mention more than 100m that is already being invested in major infrastructure projects across the borough, including at junctions 15 and 16 of the M4, consolidating Swindons fantastic location and connectivity, unlocking homes and jobs in two major urban extensions.

"Swindon has shown great resilience to economic shocks in the past and I am confident it will do so again. This includes the work the council is doing with the government to develop 50m worth of scheme proposals to reinvigorate the town as part of the Swindon Town Deal and Future High Streets Fund submission.

A different report by the Centre for Cities is more optimistic for the town.

It says of 805 towns in the UK Swindon is likely to be only the 467th most affected. In its analysis of the share of jobs affected, Swindon is no more at risk than Milton Keynes, Manchester and Birmingham.

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Preparations for no-deal Brexit part of programme for new Dublin government – The Irish News

Posted: at 1:46 am

PREPARATIONS for a possible no-deal Brexit are included in the programme for a new Irish government agreed by Fianna Fil, Fine Gael and the Greens.

The British government has ruled out seeking an extension to the transition period which allows continued access to the EU single market while trade talks take place.

But with just six months left to negotiate the complex deal, failure to secure agreement on future arrangements could have a massive economic impact on Ireland north and south.

A draft programme for government agreed by the leaders of Fianna Fil, Fine Gael and the Green Party has now been put to party members.

If approved, Michel Martin would become taoiseach at the end of June and serve until December 2022, when the post would be rotated to Leo Varadkar.

Sinn Fin, which won the popular vote in February's general election but finished one seat short of Fianna Fil, described the prospect of an unprecedented coalition between the two civil war parties as an "attempt to deny change".

The draft programme for government includes a recovery plan to repair the economic damage of the coronavirus crisis, with proposals to increase the state pension age to 67 deferred and no increases in income tax or the Universal Social Charge.

The Greens have been brought on board with a series of environmental concessions.

The document also pledges to "work towards a consensus on a shared island" in which all traditions are mutually respected, including establishing a dedicated unit within the Department of the Taoiseach.

And it says the coalition will work to protect the island from the worst effects of Brexit, including ensuring all sectors are "prepared for all possible outcomes".

This would include prioritising support for vulnerable sectors and "work to ensure the essential UK landbridge remains a viable and efficient route to market for Irish goods".

"In the absence of a trade deal, Brexit may be a significant further strain on businesses already struggling with the challenges brought by Covid-19."

British prime minister Boris Johnston said yesterday he believed a deal could be concluded by the end of the year, as both sides agreed "new momentum" was needed to get negotiations back on track.

However, European Council chief Charles Michel warned that the EU would not be pressured into buying a "pig in a poke".

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