Brexit: Five things we learnt this week
A round up of this week's biggest Brexit news.
1. UK could continue paying into EU budget to secure post-Brexit market access
The UK may continue to pay billions of pounds into the EU budget following Brexit to secure continued access to the single market, it has been reported.
The continued uncertainty surrounding the UK government’s position on future trade deals has caused anxious investors to begin looking at moving their money out of the UK if single market access was to cease.
However, the Financial Times has reported that Prime Minister Theresa May has not yet ruled out continuing to contribute towards the EU budget in order to secure access to the single market for the City and various other sectors.
This would mean that the UK could potentially keep access to EU markets while holding sovereignty on areas such as immigration.
2. SME finance and Brexit
Brexit presents both challenges and opportunity for small business. There is a lot of potential for SMEs to expand into emerging finance markets such as crowdfunding, invoice financing and peer-to-peer lending.
Although the recent fall in the value of the pound does present positives for the exports industry, many SMEs won’t benefit from this, as they often operate exclusively on a domestic level.
There is the possibility that SMEs could receive state aid, but this will remain unknown until negotiations surrounding single market access are completed.
Source: CA Today
3. Brexit takes back seat at EU summit
Theresa May attended her first EU summit in Brussels this week, but the topic of Brexit was not seen as a priority for the other 27 members of the bloc.
The agenda for the two-day summit focuses on a myriad of issues including the migrant crisis, a backlash against globalism and what should be done about Russia’s aggression in Ukraine.
The influx of migrants into Europe from the Middle East and north Africa has caused tension between the 28 member countries as they disagree on how to relocate the refugees.
With the French, German and Italian elections fast approaching, the issue of mass migration is one the leaders of those countries will be paying close consideration. The way they choose to broach the issue could win or lose them their elections.
4. Bank of England will retain independence over monetary policy
Chancellor Philip Hammond has insisted that the Bank of England will maintain its independent oversight over monetary policy post-Brexit.
Speaking to the Commons Treasury Select Committee, Hammond attempted to row back on statements made by Theresa May at the Conservative Party Conference when she said that there had been “bad side effects” from low interest rates and quantitative easing.
“Monetary policy is independently determined, that will continue to be the case,” he said.
He also made comments which suggested that banks may not have be affected by future migration controls when moving staff into the UK from Europe.
“I cannot conceive of any circumstances in which we would be using those controls to prevent banks, companies, moving highly qualified, highly skilled people between different parts of their businesses,” Mr Hammond said.
These statements could point towards a scenario where controls are only imposed on individuals trying to enter the UK who do not have a job.
Source: The Telegraph
5. Don’t expect new UK trade deals anytime soon – WTO
Robert Koopman, chief economist of the World Trade Organisation (WTO), has said that it could take the UK “many years” to secure new trade deals with fellow members of the trading body.
Leaving the EU will mean that Britain will need to submit its own tariff schedule to the WTO. These tariffs will need to secure unanimous approval from trade partners before any deals can be made.
However, as Robert pointed out at a conference in London on Monday, WTO members can raise issues at any time which would bring about a series of talks that could “take a long time” to resolve.
Until such time as these tariffs are agreed on, the UK will be subject to an average WTO levy of 5.3% which could more than double on items such as clothing, cars and spirits.
Source: The Independent