This Week in Brexit : 28th October
Greater Birmingham Chambers of Commerce
It’s been a relatively quiet week on the Brexit front, however there’s still plenty going on to put in our weekly Brexit blog post.
The Economy
There was positive news for the UK economy on Thursday as it was announced that GDP had grown by 0.5% in the 3 months after the EU Referendum. Although growth was slower than the 0.7% that was seen in the previous quarter, strong performance from the UK’s service sector saw the economy grow by more than analysts’ 0.3% estimates. You can read the GBCC’s reaction to the GDP figures here.
The FTSE 100 was buoyed on Thursday following the GDP figures however it has fallen steadily over the week, as has the FTSE 250 index.
The pound was also boosted slightly by the GDP announcement however the currency continues to perform poorly. It closed below 1.22 against the dollar and 1.12 against the euro.
This morning, the GfK Consumer Confidence Barometer recorded a measure of -17 for confidence in the economy over the next year. A negative score indicates that more people think things will get worse for the UK economy. Compared to this time last year, it has dropped a full 24 points.
The ONS revealed this week that the average wages for UK workers were less than they were 12 years ago with inflation is taken into account. Experts indicated that inflation caused by the weakened pound and economic uncertainty would keep real earnings low. However, following the introduction of the National Living Wage in April, earnings for the lowest paid rose by 5.9%.
Politics
A feisty Prime Minister’s Questions on Wednesday saw Jeremy Corbyn criticise Theresa May’s Brexit negotiations plan, likening her to Blackadder character, Baldrick, and quipping that her “cunning plan is to have no plan”. May responded by accusing Corbyn of trying to “frustrate the will of the British people” over the EU referendum. She also promised that there would be no return to “borders of the past” following Brexit.
Nissan provided a welcome boost for the Government this week as they released a statement on Thursday announcing that they will produce the next Qashqai and X-Trail models at its factory in Sunderland. This move protects 7,000 jobs. Colin Lawther, Nissan’s European senior vice president for manufacturing, purchasing, and supply chain management, said that they had taken the decision following assurances from Government that the UK’s automotive industry would be competitive at the end of the Brexit process.
Less reassuringly, International Trade Minister, Mark Garnier, warned on Wednesday that Global Banks were highly likely to lose their Passporting rights following Brexit. These legal rights currently allow banks to provide services anywhere in the single market. Retaining these rights through the Brexit negotiations has been highlighted as important if London’s attractiveness to financial firms is to be maintained.
Mark Garnier also strayed from the party line on Thursday when he commented that consumers would soon see rising prices because of the Brexit vote and that there was little the Government could do to prevent it. Downing Street has distanced itself from the comments and has said that people’s lives would be improved by a fundamentally strong economy.
Former Prime Minister, Tony Blair, stepped into the Brexit debate on Friday morning as he used a BBC Radio 4 interview to describe the Brexit vote as a ‘catastrophe’ and claimed that the 16 million people who backed Remain should not be ignored. He also said that a second referendum should not be ruled out but admitted that it would require a clear signal that the British people had changed their mind.
This Week at the Chamber
Meanwhile, it continues to be a busy time at the Chamber with plenty to keep us occupied.
On Tuesday we watched carefully as the Government announced the new runway at Heathrow. We were disappointed that there was no mention of Birmingham from Chris Grayling, Secretary of State for Transport, in his statement despite the strong case for regional expansion. You can read our full response here.
On Thursday our Chief Executive, Paul Faulkner, journeyed down to London to attend a private briefing with Mr Grayling on the Government’s infrastructure plans and priorities.
Earlier in the week the Department for Education released fresh Apprenticeship Levy & Reform details following its consultation. There were positive elements to the announcements however we remain concerned that Government is not doing enough to engage and inform the business community. More detailed commentary can be found here.
We’ve also been gearing up for the launch of our Birmingham Economic Review 2016 which goes live next Tuesday. This three-part report presents a detailed analysis of Birmingham’s economy and has been produced in collaboration with City-REDI (the City-Region Economic Development Institute) at the University of Birmingham. We will be launching the report at a breakfast event at the Birmingham Business School. You can find out more information and book your place here.
On Wednesday evening a number of Chamber colleagues attended the Birmingham Post Awards dinner at the ICC. The GBCC was shortlisted for the Sales and Marketing Award however was pipped to the post by the Connect Group.
