Greater Birmingham Chambers of Commerce
This Week in Brexit
The Brexit news just keeps on coming:
This Week in Politics
It’s been a slightly challenging week for the Government as rumours of cabinet divisions over a “hard” or “soft” Brexit persist:
This week saw closing arguments made in the High Court as the legal challenge against the Government’s right to activate Article 50 of the Lisbon Treaty without a vote in Parliament progressed. James Eadie QC, representing the Government, argued against a vote for activating Article 50, but indicated that it’s “very likely” MPs will get a vote on the final deal.
On Wednesday the House of Lords also challenged the Government’s preferred approach of keeping Brexit negotiations primarily behind closed doors. The House of Lords EU committee issued a report arguing that there should be “timely and constructive commentary” by parliament during the negotiations.
There was more criticism in store from European politicians, the chairman of the European Parliament's foreign affairs committee, Elmar Brok, alleged that UK Ministers have “"no idea of their plan".
Meanwhile, Chancellor Philip Hammond sought to alleviate concerns about a “hard Brexit” by offering assurances that employers would still have access to high skilled workers and a negotiating position pushing for favourable terms for the City of London remained on the table.
The Financial Times also reported that the Government are considering paying in to the EU budget in order to ensure access to the single market for city financial firms.
On Thursday Theresa May headed off for her first EU summit as Prime Minister (and first since the Brexit vote). While the summit is not explicitly about Brexit, there’s no denying it will be front of many leaders’ minds.
In other news, UKIP saw its second high profile resignation of the month. Following hot on the heels of Diane James’ announcement that she will stand down as UKIP Leader, expected leadership front runner Steven Woolfe quit the party on Monday. Following his altercation with fellow party member Mike Hookum, Woolfe issued a damming statement calling the party “ungovernable”.
This Week in the Economy
On Tuesday the latest Consumer Prices Index stats showed inflation rose to its highest level in two years in September. However, at 1%, this is still low. The ONS reported there was no evidence the fall in the value of sterling had caused this rise, leading many commentators to suggest that further rises are very much expected in coming months.
Meanwhile, the Producer Price Index revealed that input prices for manufacturers have risen for the third consecutive month, up 7.2% in the year to September, very much driven by the falling value of sterling.
According to predictions released this week by Credit Suisse, the pound still has further to fall.
While the volatility of sterling is a major concern for businesses (in our latest Quarterly Business Report, we saw the proportion of manufacturing firms citing the exchange rate as a concern double this quarter) the Bank of England has been focusing on the positives.
On Monday Ben Broadbent, the BofE’s Deputy Government, called it a “buffer” or “shock absorber” as the falling value of the pound has made investing in the UK and buying British goods and services more attractive to international investors who are now receiving more bang of their buck.
In other news, on Wednesday the latest Regional Labour Market statistics, that the West Midlands has seen a 1% increase in employment in the three months to August 2016, well above the national increase of 0.1%.
This Week at the Chambers
We’ve been keeping busy this week. On Tuesday we issued our response to the latest CPI and PPI data (click here) and our newly launched International Business Hub team took part in the Birmingham Commonwealth Trade Conference.
We have also been busily working away behind the scenes on our West Midlands Combined Authority Mayor elections activity (watch this space, we’ve got some interesting things planned with our partners Black Country Chamber of Commerce and Coventry & Warwickshire Chamber of Commerce) and “preparing for Brexit” activity.
We’ve also been putting the finishing touches to a fantastic new report examining the Economy of Birmingham with our partners City-REDI and Marketing Birmingham. The report provides a fascinating look at our city’s economic geography, demographics, key industries and opportunities and challenges. Join us for the official launch event on the 1st November (click here).