FARMERS & LOCAL AUTHORITIES NOW WORRY THAT EU FUNDING WILL NOT BE REPLACED FULLY

After many farmers supported Brexit, some of them seem to be getting cold feet. Lord Sandwich, speaking in a House of Lords debate (HERE) is quoted as saying the majority of people in his home of west Dorset, particularly in the agricultural community, had voted to leave and were now worried about how Brexit would work, and the financial impact it would have on UK farms.

And BuzzFeed are reporting the Local Government Association is warning that up to £5.3Bn in regional funding could be lost by 2020. The LGA said it was seeking “urgent guarantees from the government that local areas will receive every penny of EU funding they are expecting by the end of the decade”.

My own conservative controlled local district council voted enthusiastically to leave the EU.  I wonder what they will be saying in 2020 if this funding is lost?

STOP LOOKING FOR BAD NEWS SAYS BREXITEER

Daniel Hannan, the MEP and prominent Brexiteer has written a column for The Telegraph (HERE) claiming that remoaners (for that is what he calls us) are determined to find bad news to blame on Brexit.  He cites the Lloyds bank announcement about 3000 jobs being lost and 200 branches closed as being one example. Lloyds say this was planned before June 23rd and perhaps this is true, however Mr Hannan seems to think this is "good" news, because it isn't directly connected to Brexit.

FORD CONSIDER FACTORY CLOSURES

Both the Mail (HERE) and the Independent (HERE) are reporting that Ford are considering factory closures following the Brexit vote which, they say, will cost them $400-$500m each year until we leave the EU. The articles don't explain precisely where these costs come from except that it seems to be connected with the sharp drop in the value of the pound.

There is no indication which factories might be affected. Ford does not make cars here but have engine plants at Bridgend and Dagenham employing 3800 people.  The Mail story implies that Ford are only blaming Brexit because its convenient and the closures are being considered for other reasons.  But then this is what we've come to expect from the Mail.

ALARMING RISE IN RACIST INCIDENTS

The Independent has a couple of articles about the rise in racist incidents in the aftermath of the referendum vote (HERE) and (HERE).  Boston seems to be one of the worst places in the UK but it certainly isn't limited to Lincolnshire.

There has been a huge rise in the number of immigrants to agricultural and fruit canning areas like Boston and one can imagine there might be an increase in tension because of added pressure on local services - but this is not an EU problem, this is down to government spending cuts and exiting the EU market may have the effect of cutting government revenues further.

CONSUMER POST BREXIT CONFIDENCE PLUMMETS

The market research company GfK has released its latest survey on consumer confidence following the Brexit vote a month ago.  It shows the biggest drop since 1990 (see HERE).

I am sure some will argue this is a result of the government's relentless forecasting of economic problems before the vote and this may be true. Nonetheless it is worrying, especially following a survey by the Engineering Employers Federation (HERE) showing manufacturer's confidence is also sharply down.

RISKS TO NORTHERN IRELAND

Northern Ireland is a huge issue in the Brexit negotiations with so many implications for the Union and for security in the province. The New Statesman has an article (HERE) asking if this is the beginning of the end for Northern Ireland's position in the UK while InFacts (HERE) runs another piece suggesting that unification of Ireland is now thinkable.

None of this should be any comfort to the Conservative and Unionist party.

TRADE COMPLEXITIES

The Politico story of Spanish fruit (HERE) demonstrates how difficult and complex trade deals can be. It took eight years for the Spanish to become Europe’s first licensed exporter of stone fruit to the huge Chinese market. This may offer some salvation for Spain’s peach and plum growers, who took a bruising in the EU’s trade fight with Russia.

I hope David Davis and Liam Fox read this article.

IMMIGRATION NOT SUCH A BIG ISSUE POLL FINDS

A poll carried out for a study of post-Brexit opinions by the British Future thinktank found that only a quarter of leave supporters named immigration as the main reason for their vote, with 54% citing “taking power back from Brussels” as their main voting incentive according to The Guardian (HERE).

If true, this would mean the hard-line proposed by UKIP and others may not have anywhere near the support assumed and perhaps shows a Norway style arrangement would have quite a bit of popular appeal.

CAR INDUSTRY ASSOCIATION WARNS OF BREXIT RISKS

The Society of Motor Manufacturers and Traders - the SMMT -  (HERE) report a strong increase in demand for cars in the year ended June 2016 but warns that future prospects depend on maintaining tariff free access to the single market.  It says the 10.4% growth was driven by decisions to invest on the basis of demand from its biggest market, the EU.

"These decisions were based on many factors but, primarily, on tariff-free access to the single market, economic stability and record levels of productivity from a highly skilled workforce," said Mike Hawes, SMMT chief executive.

LAST HURRAH OF THE BREXITEERS?

The Spectator has an opinion piece (HERE) suggesting, as usual, that everything is rosy.  I expect nothing less of a magazine that was once edited by Boris Johnson and was one of the main cheerleaders for Brexit.  It accuses remainers of ignoring encouraging economic news while itself ignoring the far more widespread economic doom and gloom.

EU NEGOTIATOR APPOINTED

The appointment of Michel Barnier as lead Brexit negotiator for the EU Commission has been greeted with some trepidation (HERE) with him being described as a tough negotiator and Tom Newton Dunn of The Sun describing him as anti-British.  But since The Sun is proudly anti-EU he shouldn't let this bother him.

However, the Independent say he will meet his meet his match in David Davis (HERE) while Vince Cable has tweeted that M Barnier is "Suave, clever, wise, vast knowledge. Will run rings round UK Minister".  Let's see how they get on but since David Davis (HERE) thought we could negotiate trade deals bigger that the world's entire economy, M Barnier seems to have a head start.

LLOYDS PLANS MORE JOB LOSSES

In anticipation of continued low interest rates, Lloyds have announced 3000 job losses and a doubling of the branch closure programme (HERE).

PUBLIC EXPLANATION ABOUT EUROPE NEEDED SAYS THE GUARDIAN

The Guardian has quite a thoughtful editorial (HERE) about the tensions inherent in the debate about the kind of UK-EU relationship we want in future.  This is going to take some negotiating and there are bound to be plenty of disappointed and even angry people when the dust settles.  What the article does call for is a better public explanation of the EU.

Theresa May's, "diplomatic efforts must be combined with a commitment to public explanation on a scale never before seen with regard to the EU. Whether a wider understanding of how the project works would have made a great difference to the referendum campaign is unknowable. It is safe to say that in-depth understanding was scarce".

I agree with this.  While some wise people made the decision to leave too many people of my acquaintance voted for Brexit with all sorts of misconceptions, mainly pedalled by the anti-EU press. It would help a lot if we had a seriously pro-EU leader who could persuade greater numbers of the merits of EU membership.

GDP FIGURES SHOW UK GROWTH OF 0.6% IN Q2

GDP figures released yesterday showed a healthy growth rate of 0.6% in the second quarter up to the end of June (HERE).  However, by more or less common consent this was the last hurrah (see HERE) for the UK economy before Brexit problems begin to show through.  The exception to this was The Daily Express which today has a headline about Booming Britain (HERE).

GSK TO INVEST £275M IN UK

The BBC (HERE) are reporting the news that Glaxo Smith Kline are going ahead with a £275m investment in the UK despite the Brexit vote.  This is good news but it shouldn't be taken as a sign that all is well.  Remainers never thought that all investment would stop - it really would be cataclysmic if that were to be the case - rather that some investments would be cancelled or postponed, enough to cause serious problems for a fragile economy.

UK WAGE GROWTH LOWEST IN OECD SINCE 2007

The TUC has published a report showing that wage growth in the UK between 2007 and 2015 declined by more than 10% between 2007 and 2015, the joint lowest in the 29 country OECD (HERE).  We are actually equal with Greece.

German wages grew by 14% and French by 11%.  So much for the EU "failing" ordinary people. Prosper like never before.

UKIP REJECT SEVEN YEAR EMERGENCY BRAKE ON FREE MOVEMENT OF PEOPLE

UKIP's candidate for the leadership, Steven Woolfe has dismissed talk of the EU offering us a seven year emergency brake on free movement of people (HERE) which is I suppose only to be expected. However, he also said:

“The people voted for the UK to leave the single market, control its own borders, sign a free trade deal with Europe and take back control of its fishing waters.”

We don't really know what people voted for only what they voted against. The ballot paper only asked if we wanted to remain in the EU or leave.  It didn't mention anything about controlling borders, free trade deals or fishing waters. This is only what UKIP think voters want.

DIGBY JONES SAYS BREXIT TO HAVE TINY ECONOMIC IMPACT

We are beginning to see a move by the enthusiastic leavers to claim that all of the economic bad news, much of which was forecast by the remain campaign, before the referendum, is actually nothing to do with Brexit.  The latest is Digby Jones (HERE) former director of the CBI (and a man who often comes across as a bit of an idiot).

He says, "There's not going to be any economic pain. If there are job losses, they will be very few" and, "One of our customers was thinking last week that they might not do a certain deal. Today they've said they won't and the reason is Brexit. It's got nothing to do with Brexit - but it's a very convenient thing to blame.".

So amazingly, even when told by the actual investor that Brexit was the reason an investment will not now go ahead, he says it isn't!  Even if the country suffers a huge economic reversal and the date it began can be traced back to is precisely June 23rd Mr Jones would claim it was a coincidence.

LIAM FOX SAYS UK WILL SEEK FREE TRADE AGREEMENT

In the US for talks, Liam Fox has given an interview to the Wall Street Journal, reported in The Guardian (HERE). In it he says we "would probably seek to enter a free-trade agreement with the EU rather than a closer “customs union” that could restrict its ability to negotiate lower tariffs with other trading partners".

Since we cannot negotiate a FTA as a member of the EU (see HERE), this means we will have to exit, become a third country in EU parlance and operate under WTO rules for a number of years before a trade deal can be negotiated.  There seems no question of the UK entering the EEA even for a limited period while we work out what our trade relationship with the EU is.

And ITV are reporting (HERE) the USA have confirmed to Mr Fox that they won't enter into talks with us on a US-UK free trade deal until our deal with the EU is clear or clearer.  None of this seems quite a easy as John Redwood claims (HERE). 

UPDATE 27th July

We now learn Liam Fox has been "slapped down" by Downing Street (HERE) for suggesting a FTA on the basis that having no customs union would mean goods shipped across the Irish border would have to be checked and this means a "hard" border - something Theresa May has already said she doesn't want. It really does look like they're making it up as they go along.

REDWOOD SAYS TARIFF FREE TRADE ACHIEVABLE WITHOUT FREEDOM OF MOVEMENT

In a rather strange interview with Reuters, John Redwood (HERE) makes some remarkable comments.  He wants to exit the EU "within months" by repealing the 1972 European Communities Act and just notifying the EU we are leaving. He thinks it really is that simple and he may be right although I haven't read of anyone else suggesting anything like this.

THE IRISH BORDER PROBLEM

After telling us during the referendum campaign that it would be "inconceivable" that border controls would not have to be introduced between the Republic and Northern Ireland, Theresa May now says she will support the Irish government's position that a "hard border" will not be needed (see HERE).

What was inconceivable must now become conceivable - but as yet no one knows how.  Yet another Brexit conundrum to resolve.

IS IT A CASE OF WELSH BREGRET?

The Independent (HERE) has published a report about a poll carried out by ITV Wales and Cardiff University since the referendum which appears to show that if another vote was held now, the result would be different.  It seems while 97% of remainers would vote the same way, only 86% of leavers would do the same and this would be enough to change the result from a narrow leave win to a narrow remain win.

All of this is of course depends on how accurate the polling is but I think the trend will grow as the months go by and the effects of Brexit show up in people's day to day lives.

LEGAL CHALLENGE TO ARTICLE 50 TO BE HEARD IN OCTOBER

The various legal challenges (about seven so far) were given a preliminary hearing at the High Court on 19th July in front of Sir Brian Leveson and Mr Justice Cranston.  They heard some legal arguments (HERE) and set a provisional date of October 17th for a full hearing .  If the losing side decides to appeal, the Supreme Court will hear the appeal before the end of December 2016 to keep with the governments timetable of triggering article 50 by the end of the year.

THE MAJORITY PROBABLY WANT A NORWAY STYLE DEAL

An author, Mr John Lanchester (HERE) has written an essay on Brexit and makes some very good points. He says of the 330,000 migrants that came to the UK last year, 169,000 were actually students who came to study.  I hadn't realised the figure was as high as that and I don't believe it was widely publicised.  These cannot surely be thought of as long term migrants.

And he also thinks the most likely outcome is a Norway style arrangement to avoid damaging the economy and because the majority would prefer this:

it will be a profound betrayal of much of the Leave vote. If we do anything else, we will be inflicting severe economic damage on ourselves, and following a policy which most of the electorate (48 per cent Remain, plus economically liberal Leavers) think is wrong. So the likeliest outcome, I’d have thought, is a betrayal of the white working class. They should be used to it by now.

ONCE AGAIN SQUARING THE CIRCLE SEEMS IMPOSSIBLE

Mark Littlewood, Director of the think tank, The IEA and prominent Brexiteer, writing in the Mail (HERE),  says:

We need immigrant labour. Those of us who backed Brexit but believed that immigration can be an enormously positive force always understood that. Those who just wanted to wave around absurd targets and numbers on immigration really do have to wake up to economic reality.

Meanwhile, The Telegraph (HERE) in an article entitle "Tory MPs react with fury as EU leaders consider emergency brake on free movement", Steve Baker MP for Wycombe, says this:

“If we end up with the Government doing things that don’t end the supremacy of EU law, don’t leave us able to control our own migration policy and leave us in the EEA, then there will be a great deal of dissatisfaction.”

There is almost as big a gulf in thinking between Brexiteers as there is between Brexiteers and Remainers.

ADAM SMITH INSTITUTE'S CASE FOR THE EEA

The Adam Smith Institute has made a strong case for using membership of the EEA as a sort of staging post to full exit (HERE).  This is mainly on the grounds of speed and protecting most of our access to the single market during the long, protracted negotiations for a new trade deal and complete separation.  I think its helpful in some ways but it may not be enough for some people who want a quick clean break and don't care what damage is done to the economy.

SETTING OUT A COMMON POSITION BEFORE ARTICLE 50 LOOKS ALMOST IMPOSSIBLE

Theresa May, sooner or later, is going to have to square the circle. Industry will be pressing hard to retain tariff free access to the single market that accepts 44% of our exports with some even arguing for continued freedom of movement of people.  The vast majority of economists warn that falling back on WTO rules risks massive damage to our economy.  The City of London worries that it will be diminished with huge loss of tax revenues to the exchequer.

On the other hand hard liners like Bill Cash, the MP says we must sever all ties (HERE).  But Keith Vaz, another MP and select committee chairman, says we need to be involved in anti-terrorism measures (HERE). This is going to take the wisdom of Solomon to resolve, if it can be resolved at all.  One side or the other is going to be severely disappointed.

My personal opinion is that in the long term nothing of substance will change. We will be marginally poorer with less influence but those who thought our problems were all down to the EU are in for a surprise.

LIAM HALLIGAN CALLS FOR AN END TO "NEGATIVITY"

Liam Halligan has written yet another article telling remainers to shut up, accept the result and move on (HERE). It is in fact a rehashing of several articles (see HERE) claiming everything is "fine" and urging us all to stop the "ceaseless attempt to talk the UK into a recession that we’re actually pretty well-placed to avoid".  I assume this is as opposed to the ceaseless attempts by Mr Halligan and others to talk us into economic decline by remaining inside the EU?  

He seems like the captain of the Titanic trying to convince himself all that is needed after a brush with an iceberg is a tin of touch-up paint.  Personally, I think he is softening up the future line-to-take as being any recession is not due to Brexit but our own "negativity" about it.

REVOKING ARTICLE 50

Following an earlier post (HERE) there is more legal opinion about the revoking of article 50 with some arguing that we can do so even though it is not explicit in the article text (HERE).  This might be good news for those of us who do not want it to be triggered at all but I fear this will turn out to be a false hope.

Article 50 is designed to give most of the weight in any negotiations to the EU. If it can be revoked at any time we could simply drag out the process, and all the uncertainty that goes with it, for ever, giving us all the power back.  To be fair the article says the government should seek clarification from the EU Court of Justice before invoking article 50.  I think the earlier posting, that it will be a political decision for the other 27 members voting by unanimity is more likely to be right.

BRITAIN'S DECLINING INFLUENCE

In the light of the many bad omens about the future direction of the economy, we shouldn't overlook the loss of influence Britain will suffer in the coming years. The Independent has an article about this HERE.  It talks of US focus already turning to Berlin and the inescapable fact that increasingly decisions will be made in discussions with the USA, China and the EU.  Britain will, for the first time since 1973, be on its own forced to rely far more on our own economic and military power.  As the author says:

Yes, Britain is free of one of the most complicated institutional structures in history. But political freedom can also mean political isolation. Just ask Russia.

BOJO TELLS US FINANCIALS THEY "WILL" KEEP EU PASSPORTS AFTER BREXIT

Boris Johnson has apparently assured US financial organisations (HERE) that they will still be able to maintain access to the EU through the passporting arrangements that their London based subsidiaries enjoy at the moment.  The French finance minister says we can't.

What makes Boris think we can still set the rules after we leave he doesn't say. He simply thinks it wouldn't be in the EU's interest. In other words it would be irrational. But surely no more irrational than a vote to withdraw from the EU that he encouraged?  Since he has already been accused, in a press conference with John Kerry, of telling outright lies it is not clear if any of the financial organisations believed him.

LONDON MAYOR CONCERNED ABOUT LOSS OF BUSINESSES TO EUROPE

Sadiq Khan is becoming worried that European cities are vying with each other to attract financial businesses out of London (HERE).  He is right to be concerned.  The government is in a difficult position, unless we accept freedom of movement of people we will lose the passporting arrangements that allow financial institutions in the UK to trade across Europe.  If we lose this right there will certainly be an exodus. Our friends have become our competitors.

The latest government figures estimate the FinTech industry - financial technology - alone generates about £20bn in annual revenue.

CONSUMER SPENDING

Alastair Heath in The Telegraph has said (HERE) that "Commentators and economists are poor at understanding the relationship between consumer behaviour and big political events at the best of times; after the referendum, a shell-shocked pro-Remain City appears to have got it especially wrong" adding, "The risk in the immediate aftermath of the Brexit vote was never consumer spending".

Now have a look at this (HERE) in The Independent.  Four charts show how consumer spending patterns closely follow the fortunes of the pound and consumer confidence.  The pound is well down on pre-Brexit figures and consumer confidence has also fallen sharply.  We'll see what happens to spending later - and perhaps remind Mr Heath what he said in July

THE TWO YEAR ARTICLE 50 PROCESS IS "IMPOSSIBLE"

Reuters (HERE) quotes some unnamed EU officials saying the two year process for Brexit is basically impossible.  Greenland took three years to extricate itself and it had just one substantive issue and that was fishing rights. Because the UK's relationship is far more complex they believe at least six years are needed.

THE PRESS - A TALE OF TWO SIDES

Yesterday was very interesting. The huge fall in the PMI index prepared by Markit, which said in the accompanying report, "July saw a dramatic deterioration in the economy," marked a turning point. The index, a measure of sentiment rather than hard data as the chancellor was quick to point out is the first real measure of business activity since the referendum. It is usually a good indicator of what is happening in the real economy and it seems to presage a 0.4% contraction in the third quarter.

DRAMATIC DETERIORATION IN UK BUSINESS ACTIVITY POST BREXIT

This morning the PMI flash figures for July were released and they show the purchasing manager's index down to 47.7 from 52.1 in June.  Any figure above 50 shows an expansion while figures less than 50 point to a contraction and the drop between June and July is the biggest since the height of the financial crash in 2009.

The pound dropped a cent within a few minutes of the information being released.

The PMI figure is an important first real indicator of sentiment in the UK business sector following the Brexit vote. The Telegraph has an odd schizophrenic page in the business section. Alastair Heath has a piece entitled - So far so good for the post Brexit economy while on the opposite side of the page the Live Blog has - Pound tanks and FTSE erases losses as UK economy contracts at steepest pace since 2009.  Poor Mr Heath, he should read his own paper more.

EUROPEAN INDUSTRY IS CLOSELY INTERWOVEN AND CANNOT EASILY BE UNPICKED

The Guardian has a useful article (HERE) about how intertwined UK and German industry has become and cites an example of Dräxlmaier, a company I had never heard of before but employs 55,000 people worldwide and has a plant in Tamworth to supply car parts for the Mini as well as Jaguar and Land Rover. 

JEREMY WARNER FROM THE TELEGRAPH

Jeremy Warner writes in The Telegraph but there is an odd thing about his two most recent columns. The first one (HERE) suggests we are going to struggle with trade deals saying:

"The brutal truth is that the only FTAs that have a lot of impact in terms of trade and investment flows are those between geographically proximate partners. The most important of these are NAFTA and the EU. Those between distant countries tend to be far less effective. Let’s have more trade with the rest of the world by all means, but best not to be naïve about it; there is no pot of gold at the end of the free trade rainbow".

AMSTERDAM LOOKS TO GET A SLICE OF BREXIT CAKE

There is an article on Bloomberg (HERE) about Amsterdam starting an attempt to lure away some very specific types of financial trading like clearing, financial technology and high frequency trading 

that it believes it is most suited to.

Kajsa Ollongren, the Dutch city’s deputy mayor in charge of economic affairs, said, "Within that financial sector, there are parts, niches, clusters that will move to Europe and for which Amsterdam is really good,” She admitted they are not going to get all the big banks over to Holland.  This is exactly the death by a thousand cuts that will damage The City over the next few years.

A survey by The Centre for Financial Studies at Frankfurt's Goethe University (Bloomberg HERE) found that "securities trading in Frankfurt will probably experience an upswing in the wake of Britain’s decision to leave the EU, with Germany’s banking capital emerging as one of the main beneficiaries in the changing landscape".

MORE LEAVERS JOIN THE HAPPY CLAPPY CHORUS

Another Spectator columnist, this time Liam Halligan, tries to convince himself (HERE) that because the UK did not become instantly poorer after 23rd June everything is OK.  In fact, Mr Hallligan uses the same arguments that Fraser Nelson did a few days ago (HERE) even down to quoting the same Reed Employment Agency figures.  But I think he is still wrong.

I get the impression they are doing the opposite of what this blog does. They scour the papers for positive news about Brexit.  However, negative stories abound and positive ones are like hen's teeth so their task is so much more difficult and they have to use the same bit of "evidence".  No one said the apocalypse was coming at all, let alone over the first few weeks. As this blog title suggests this is a slow motion earthquake and the effects will take years to play out.

Mr Halligan wrote a piece in similar vein on 2nd July (HERE) making positive noises and suggesting it is Europe that is now on the backfoot!

TRADE DEALS - HOW DIFFICULT ARE THEY?

There has been much talk of the UK rapidly signing up trade deals with all and sundry but in practice they are far more complex than the leaver optimists think. The Telegraph no less has a measured piece (HERE) setting out some of the problems.  Firstly, we will not be able to quickly adopt the 50 or so FTAs that the EU already has in place with a delete and replace exercise. We are 65m people while the EU is 500m - quite a difference.

MORE CALLS FROM A LEAVER TO ACCEPT OUR FATE

Alastair Heath has called on the nation to adopt a can-do attitude to Brexit and stop whining and claims the optimists are now in the ascendancy (HERE) saying they (the optimists) are not deluded but, "they relish the challenge and are convinced that we now have a once-in-a-generation opportunity to change our country and economy for the better".

The corollary of his argument is that the EU was preventing the UK making itself better. Optimists may not be deluded but Mr Heath is.  We could have changed our country for the better at any time without leaving the EU. About Remainers he says this:

Some are Remainers who still believe Brexit to be an epoch-defining catastrophe, who continue to plot and scheme to overturn the result, who cling to the deranged, insulting notion that those of us who voted Leave are either stupid, racist or evil, who scour the news for every negative data point and who, in a few isolated and extreme cases, would actually like a recession “to prove them right”.

I assume he won't mind if we behave like Nigel Farage who believed the EU was an epoch defining catastrophe.

NO INFORMAL TALKS BEFORE ARTICLE 50

A few days ago Phillip Hammond, when he was still foreign secretary told us (HERE) European leaders would be happy to hold informal talks on Brexit despite “strident noises” from Brussels banning such discussions,

Yesterday Theresa May went to Berlin for talks with Angela Merkel and we are told she took a firm line with Britain saying there could be no informal talks before Article 50 was triggered (HERE). Reality is becoming clearer.

UK SCIENCE ALREADY AFFECTED BY BREXIT

The BBC (HERE) has gathered quite a lot of anecdotal evidence that our scientific research base is already being impacted by the vote even before negotiations begin or Brexit actually happens. Seven national academies have called on the government to ensure that research is protected in Brexit negotiations; the President of the Royal Society has told the BBC that the future prosperity of the UK is at stake.

InFacts gives more on this aspect of Brexit (HERE) calling academia a jewel in the crown.

THE DAFTEST COLUMN EVER WRITTEN

Sean O'Grady, a journalist on the Indendent, has written (HERE) what I think must rank as the silliest column written so far about Brexit. Mr O'Grady at least concedes that Brexit has damaged the UK economy but says he was still right to vote leave. Fair enough.

DAVID DAVIS THINKS SOUTHERN IRELAND IS PART OF THE UK

Our new Brexit Minister, in another gaffe, seems to believe that the border between Northern and Southern Ireland is an internal border of ours.  Speaking on Sky News, he does not seem to realise The Republic gained independence in 1922 - see HERE.

A contributor to The Guardian thinks this border will dominate Norther Ireland politics for years (HERE)

FRASER NELSON THINKS EVERYTHING IS FINE

Fraser Nelson, the Spectator columnist, says in a blog post (HERE) that of course Britain is open for business and "the only people who thought that Brexit would somehow not mean being open for business were Osborne, Sadiq Khan and others advocating Project Fear".  He even believed the jobs market, far from being impacted is actually flourishing, quoting the recruitment agency Reeds to support this view.

He thinks that the Brexit vote was a "move to break free of EU parochialism and to do more business with the rest of the world". Mr Nelson ignores all of the expert opinion and data from many reliable sources that we are in for a slowdown at the very least.  And in common with all the other enthusiastic leavers he does not explain why it was necessary to leave the EU to do more business elswhere.

BORIS SAYS UK WILL STILL PLAY LEADING ROLE

After attending his first meeting of EU foreign ministers Boris has claimed we will still play a leading role in Europe. InFacts dismantles the idea HERE if dismantling were needed, which it isn't.

The idea you can leave an organisation of which you have been a leading member for many years, and still continue to play a leading role is farcical. We may be consulted before a decision is reached but we will not be in the room to argue our case, more often than not we will be informed after a decision is made. Sometimes one wonders which audience BoJo's comments are directed at. The EU will I am sure be unimpressed.

COULD A SECOND REFERENDUM BE HELD?

Vernon Bogdanor argues (HERE) that a second referendum could be held if the EU itself becomes a different organisation to the one we have just voted to leave and he says there is evidence some leaders get the message British voters have just sent.

The British contribution to Europe was always to insist that rhetoric is subordinated to reality. Realism is now desperately needed if the European project is to be rescued from the elitist and technocratic establishment which currently dominates it, and which is losing it the support of its people. Perhaps if EU leaders listen to what citizens are saying, it might even be possible to persuade the British public to have second thoughts in a second referendum.

GLOBAL GROWTH WILL SUFFER SAYS IMF

The actual IMF forecast is now available (HERE) and shows global growth forecast downgraded by 0.1% this year and next.  But while world growth slows UK growth will be worst hit suffering a 0.2% cut this year and 0.9% next.  We seem to have shot ourselves in the foot and give the world a flesh wound at the same time.

Sky TV says the IMF report paints an unflattering picture of the UK economy (HERE).  The BBC's take is HERE.

ARM HOLDINGS TAKEOVER A SAD DAY

The founder of ARM Holdings Hermann Hauser has told the BBC (HERE) he believes its imminent sale to Japanese technology giant Softbank in a £24bn ($32bn) takeover which was announced on Monday morning. is "a sad day for technology in Britain".

The new chancellor Phillip Hammond welcomed the news and said it showed Britain was open for business.  In the Telegraph Alastair Heath, an enthusiastic leaver, said Theresa May was right not to block the takeover (HERE) and said it was a step along the road to make us a successful, high skills, prosperous economy.  He goes on, "It is also becoming increasingly clear that leaving the EU doesn’t signify economic doom for the UK (not that those of us who have always backed Brexit ever thought it would)".  Well let's wait and see what happens.

Actually, I think the founder is right, it's sad day for us and a step on the road to making Japan a more successful, high skills economy. They will own the company, the intellectual property rights and all the future profits of a really fantastic UK business.

The USA, Germany and Japan did not become wealthy by selling their best companies. This is also one of our problems and is nothing to do with the EU.

IMF TO SLASH UK GROWTH FORECAST

The Telegraph reported yesterday (HERE) that the IMF is preparing to slash their growth forecast for the UK to below 1.7% this year (from 1.9%) and to below 1.4% next year (from 2.2%). This is all in keeping with the IMF's declared position that Brexit would deliver a “negative and substantial” blow to the UK economy.

The Telegraph's position has altered considerably. Before the referendum it, or at least all their columnists, would have dismissed such a claim as scaremongering. Now it's reported as fact.  Amazing.

THE POUND - A MATTER OF TIME

The pound has rallied slightly after the catastrophic fall following the referendum and this morning is trading around $1.32260 (7:00 am) but Bloomberg are forecasting that this is on borrowed time (HERE).  Because there are still so many unanswered questions about our relationship with the EU and also because the Bank of England is expected to introduce more stimulus measures in a few weeks, the pound will continue to slide.

ARTICLE 50 CAN IT BE REVOKED ONCE TRIGGERED?

InFacts has a posting by Sir Alan Dashwood, a man with a 40 year career in EU law about Article 50 (HERE). Essentially, he says the question of revocation once the withdrawal process has started will be a political decision.  If they want us back Article 50 will be revoked, if not, it won't and he says it would be hard for the European court of justice to go against this.

DAVID DAVIS IN FREE TRADE AREA GAFFE

David Davis says Liam Fox is going round the world and will be signing up free trade deals all over the place so Britain will have deals with an area much bigger than the EU - in fact "10 times the size of the EU".  The problems with this is that the EU has about 17% of world trade and even taking out our 2.3% this leaves the EU responsible for 14.7%.  

So, for Mt Fox to sign up an area 10 times the size we are talking about an area 47% larger than the world!  People are asking he if has other planets in mind.  See BuzzFeed HERE.

David Davis is the minister for Brexit.. Prosper like never before, eh.

COULD SCOTLAND BLOCK BREXIT?

Theresa May has said she will not trigger article 50 until a UK wide approach has been agreed and some people think this puts Nicola Sturgeon in a strong position not to agree an approach (The Independent HERE).

Asked by the BBC’s Andrew Marr whether this meant Scotland had now effectively been given a veto on the UK leaving the EU, Scottish First Minister Ms Sturgeon said: “That appears to be an interpretation that some people put on the Prime Minister’s remarks. Certainly from what she said after the meeting that puts us in a very strong position".

However, the new Brexit secretary, David Davis, insists Scotland cannot have a veto, despite the prime minister suggesting all of the UK should agree a unified approach.

BUSINESSES EXPECT CAPITAL SPENDING CUTS IN NEXT YEAR

In a survey carried out by Deloittes, the big accountancy firm, some 82 percent of chief financial officers from FTSE 350 and large private companies expect to cut capital spending in the next year, the biggest proportion on record and up from 34 percent in the first quarter. (Reuters HERE)

PARLIAMENT SHOULD VOTE ON ARTICLE 50 SAYS DOMINIC GRIEVE

Former Attorney General Dominic Grieve, in a TV interview (see The Independent HERE) says he thinks as a matter of convention parliament must have a vote on the triggering of article 50 because it is such a big decision.  I think this is right even if the legal case is arguable.  The first challenge to the government's legal advice that a parliamentary vote is not needed is to have a preliminary hearing in the High Court tomorrow.  

If a vote is required and takes place later this year when more real information is available about the economy then MPs will have to take a view about how good or bad Brexit will be for their constituents.

FIRST FORECASTS FOR THE ECONOMY EXPECTED THIS WEEK

The Telegraph is reporting (HERE) that the Ernst & Young ITEM (Independent Treasury Economic Model) Club is to release today the first economic forecast following the Brexit vote.  It downgrades growth this year to 1.9% (was 2.3%) and for 2017 it says we will grow by just 0.4% (was 2.6%).

BOJO REAFFIRMS UK COMMITMENT TO GIBRALTAR

In one of his first few announcements as our new foreign secretary, Boris Johnson has reaffirmed Britain's commitment to Gibraltar (HERE) according to Reuters.

How much this will be worth in practice remains to be seen.  Gibraltarians are concerned that leaving the EU will see a return to border controls and restrictions on the movement of people across the border (both ways) with Spain. Brexit is not good news for them at all, no wonder they were over 90% to remain.

WALES CONCERNED IT IS BEING EXCLUDED FROM EU TALKS ALREADY

The Welsh government is worried that they are already being frozen out of talks with the EU commission about regional grant spending according to the BBC (HERE).

I.m not sure why they're surprised, I think we can expect more of the same in the coming months.

CHARLES MOORE SAYS WE SHOULD LEAVE - DEAL OR NO DEAL

Charles Moore, a columnist in The Telegraph (HERE) and biographer of Margaret Thatcher, a man I used to admire, has written another piece for yesterday's issue that looks like the ravings of a lunatic foaming at the mouth.

EUROPEAN CAR SALES SLOWDOWN AS BREXIT WEIGHS ON CONSUMER CONFIDENCE

European car sales growth slowed in June, with registrations dropping to +6.5% the weakest since March (Bloomberg HERE).  Worryingly, UK registration dropped by 0.8%.

Peter Fuss, an automotive analyst at consulting firm EY, said in a report, “Drastically reduced consumer confidence in the U.K. following the Brexit vote will probably result in a significant hit to sales,”  adding,  “Not least the German car makers will see an impact in the form of lower exports to the U.K., as cars made in Germany get more expensive for British buyers because of the weak pound.”

MORE BOND YIELDS MORE NEGATIVE - BARCLAYS

Bloomberg have an article showing how bond yields have changed since June 2008 (HERE).  The figures are from Barclays and a chart show the global aggregate yield distribution of £47 Trillion of investment grade debt sold in 24 different currencies across the world. Up until Mid 2014 none of these gave negative returns - even in the financial crash.

Now more than a quarter yield less than zero. Something is definitely happening.

DAVID DAVIS OUR BREXIT NEGOTIATOR DOESN'T EVEN UNDERSTAND THE ISSUES

David Davis, our newly appointed Brexit negotiator, apparently shows a worrying lack of understanding of how trade deals with the EU actually work (HERE).  He seems to think we can negotiate separate deals with individual EU countries beginning with Germany and has embarrassingly sent out tweets to this effect during the referendum campaign.  This is impossible, when you join the EU you lose the right to negotiate your own deals so even if Germany wanted to do it they cannot.

Mr Davis, who I used to admire, also thinks the "economic benefits" of Brexit will be felt by December 2018 (HERE) but this is seemingly at odds with the Bank of England monetary policy committee that expects a weaker housing market, rising inflation and significantly lower growth in the coming years (HERE).

Mrs Leadsom thinks Brexit will have "no impact" on the economy while Mr Davis thinks the benefits will be felt in two years.  Neither of them are economist so we wait to see if they are right.

LONDON LUXURY HOME SALES SLUMP

According to Bloomberg (HERE) sales of luxury homes in london fell by 18% in the 12 days after the referendum compared to the 12 days before, and by 43% compared to the same period in 2015.  I think this shows the market was already cooling but has cooled much more quickly after June 23rd.

Some may welcome a fall in house prices but overseas buyers provide an important source of the foreign direct investment that is vital to our economy at the moment.

CONSTRUCTION FELL SHARPLY IN MAY

The Office for National Statistics (ONS) is reporting a sharp fall in construction output in May (HERE). Figures show a fall of 2.1% in May following an increase of 2.8% in April.

Apparently, to avoid being a drag on the economy in the second quarter, construction needs to expand by 1.9% in June but the Financial firm Markit has already said the construction industry suffered its worst contraction in seven years in June as concern grew about the EU referendum.  Prospering like never before.

ARE UNIVERSITIES SEEING A BREXIT EFFECT ALREADY

Aberystwyth University is reporting that EU students are withdrawing their applications to study in Wales with around 100 students pulling out after the brexit vote with around half doing so on the 24th June (HERE).  Overseas students provide a valuable source of income for UK universities and if the numbers fall significantly the shortfall will have to be found elsewhere or the university sector will shrink.

EU CAPITAL MARKETS UNION

Lord Hill, who resigned as our EU Commissioner recently, as a final act, has unveiled a plan to launch an EU wide capital market (HERE).  At present capital markets in Europe are fragmented and banks are having difficulty lending so the EU plan is to use private capital markets to plug the gap and get Europe moving again.

Ironically, this would have been of huge benefit to London which would have dominated it, bringing in wealth and tax revenues. Brexit has put paid to it.

WHAT DOES THE UK HAVE TO TRADE WITH?

I have argued for some time that we are not in the position that Brexiteers think we are with regard to manufacturing.  My own 50 year experience of many different industries, both here and across Europe is that we are essentially hopeless at manufacturing.  Now Anthony Hilton has written an article (HERE) that gets right to the heart of the problem.

BOJO SAYS EUROPEAN RELATIONS WILL INTENSIFY

In his first speech to foreign office staff Boris Johnson said we will play a greater role in Europe even though we voted to leave the EU (HERE). 

"There's a massive difference between leaving the EU and our relations with Europe, which if anything I think are going to be intensified," He said, adding that John Kerry the US Secretary of State agreed with this. I assume that's why they were urging us to stay in the EU!  BoJo takes us for fools.

UK WILL LEAVE THE SINGLE MARKET SAYS NEW CHANCELLOR

Philip Hammond has told LBC listeners this morning (HERE) that the UK will "come out of the single market as a result of our decision to leave the European Union".  I assume he was being careful, as he usually is, and making a factual statement.  This means we will have to adopt WTO rules for a period after Brexit and before the new agreement on trade is in place.

There does not seem to have been any noticeable impact in the financial markets so perhaps I have misunderstood but if we "come out" banks will lose access to the EU market for financial services and this will have a huge effect on the City.

GOVERNMENT BONDS SOLD AT ALL TIME LOW RATE

The government's debt management office last week sold £1.25Bn of 10 year index linked gilts at a record low interest rate of -1.578% (HERE).  People are actually paying money for the privilege of lending the UK government money.  This is not unique to us, German bond are also being sold at negative rates of interest.  What does this mean?  I'm not sure, but commentators suggest it is a flight to safe havens in preparation for hard time ahead.

GERRY ADAMS ON IRISH UNITY

Gerry Adams has written a piece for the New York Times (HERE) calling for a referendum on Irish Unity following the referendum where the people of Northern Ireland voted to remain in the EU.  If Brexit does not bring about tangible improvements and instead, as most experts believe, a mild recession or worse with ongoing financial problems for the UK, the pressure for such a referendum may well increase.

WETHERSPOONS CHAIRMAN STILL ATTACKING DOOM MONGERS

Tim Martin, CEO of pub chain Wetherspoons, has attacked (HERE) the Bank of England Governor Mark Carney, IMF head Christine Lagarde, the Treasury, investment banks Goldman Sachs and Morgan Stanley, accountancy giant PWC and many FTSE100 chiefs saying they are either dishonest, or "have a poor understanding of economics".

He is not an economist himself but obviously, like Michael Gove, he has had enough of experts.

I assume he thinks because all of the difficulties (recession, house price collapse, increased taxes, pound sinking) that these organisations warned about didn't happen on 24th June they aren't going to happen.  We shall see.

WILL HUTTON THINKS WE'RE HEADING FOR A CLIFF

Will Hutton, the left wing economist and commentator has written a piece for The Huffington Post (HERE) explaining why he thinks the Norway style solution is the least worst option for us.  He is more pessitmistic than me and thinks the risk of another first order banking collapse cannot be ruled out. 

He believes if Theresa May/David Davis try to control immigration and exit the single market "the policies could trigger at best a deep economic recession and at worst a second financial crash and depression. I have never been so fearful for the British economy in my career as an economic commentator".

He quotes the words of futurist Parag Khanna, “EU countries are functionally inseparable, an egg that cannot be unscrambled. Their monetary system, transportation routes, energy grids, financial networks and manufacturing supply chains are all heavily integrated.”  We are going to try unscrambling an egg back to its original state.

OUR PRODUCTIVITY PROBLEM

The productivity gap  between us and the G7 average has risen to 18% the largest since records began in 1990 (HERE).  Worse, we are 36% behind Germany and 31% behind France, countries inside and apparently "shackled" by burdensome regulations.  Figures are from 2014.

GLOBALISATION AND BREXIT

Martin Schultz says the EU is not to blame for globalisation (HERE) and now Bloomberg have an article reiterating the point and saying Brexit won't stop globalisation happening (HERE).

The article says, "anyone who thinks globalization is dead misreads what’s really happening. While there are pockets of resistance, much of the world is still forging tighter links between countries, companies, and communities. Rather than retrenching, globalization is deepening and expanding—whether angry Trump supporters or British Leave voters like it or not".

The writer argues that politicians should stop pandering to workers and help to prepare them for new and different jobs. If we try to retreat from the world we will be the losers.

BOJO - THE WORLD'S TAKE ON OUR FOREIGN SECRETARY

The Washington Post today carries an article about Boris Johnson's undiplomatic gaffes (HERE) and is in keeping with other articles in serious newspapers. The Guardan's is HERE and the Independent HERE.

It is almost impossible to find anyone who does not view it with incredulity and not a little hilarity. What are we doing to ourselves?

UK RETAIL SALES GROWTH FELL SHARPLY AFTER THE REFERENDUM

The British Retail Consortium (BRC) has reported that annual sales growth fell from +0.5% in May to -0.5% in June in the run up to the vote (HERE).   Research constancy Capital Economics said we will have to wait a bit longer before a clear picture of the referendum’s impact on the sector emerges.

“June’s BRC sales data – which cover the days both before and immediately after the EU referendum – show the retail sector faltering,” it said. “But as both surveys cover only the especially-turbulent few days after the vote, we are wary of reading too much into them. We will have to wait until late July for the first surveys covering more than just the few days after the referendum.”

BUSINESS OPTIMISM EVAPORATES POST BREXIT

The Telegraph campaigned mercilessly for Brexit but now reports (HERE) that business optimism has deteriorated out of all recognition according to a survey by Credit Suisse, with the balance of companies surveyed expecting corporate spending to increase versus decrease falling to "unprecedented" levels.  UK figures reached record low of -52%.

The paper reports this as if they had nothing to do with it.

MAIL COLUMNIST REALISES BREXIT IS BREXIT IS MEANINGLESS

Stephen Glover, long time columnist on The Daily Mail, has written a piece (HERE) in this morning's paper and has apparently just realised, "that 'Brexit is Brexit' is actually a pretty meaningless statement. It would make about as much sense to say 'Blue is Blue'. But what sort of blue? Cambridge or Oxford? Cobalt or sapphire? There is a world of difference; an almost infinite number of variations".

BOJO FOREIGN SECRETARY - THE WORLD LAUGHS AT US

Boris Johnson's appointment as foreign secretary has made him appear like a latter day Lazarus and made Britain a laughing stock around the world.  The BBC (HERE) are running a piece today about international press reaction.  German television presenters and Obama's press spokesman were both apparently unable to stifle laughter on announcing the news of BoJo's elevation to one of the highest offices in the land.

The most telling comment came from Carl Bildt, former Swedish PM who tweeted "I wish it was a joke, but I fear it isn't".

Either it is Theresa May's masterstroke or a catastrophe in the making. Let us hope she has provided him with all the rope he needs.

ENERGY COSTS SHOW SIGNS OF RISING

Comparison website uSwitch has some dual-fuel deals had been replaced since the referendum, with new offers costing up to £105 a year more for the average customer (HERE). It said wholesale energy costs had been rising for the past three months, and that the UK’s position as a net importer of energy meant the falling pound was pushing up prices.

POUND REACHES PARITY WITH THE EURO AT AIRPORTS

Bureaux de Change at some UK airports are offering exchange rates with the Euro at close to parity (HERE). At Bristol holiday makers and business travellers were getting just €1.0008 per pound and Scots flying from Edinburgh will get a similarly low rate of €1.007. Those flying from London airports get the best deal, receiving €1.07

MARTIN SCHULZ PRESIDENT OF THE EU PARLIAMENT SOFTENS ATTITUDE

The president of the EU parliament, Martin Schulz, has given an interview to The Guardian (HERE) and offers a more conciliatory tone to the UK which I think will be welcomed.  However, he reminds the government that they have to consider the EU parliament because they must approve any deal. I assume this means if we drag our feet or try to blackmail the EU there may be difficulties ahead.

HOUSE PRICES SURVEY SHOWS SLUMP IN DEMAND

The Royal Institution of Chartered Surveyors (Rics) has carried out a survey that suggests the supply of homes on the UK market fell at its sharpest rate to date and buyer demand hit an eight-year low after Brexit was confirmed (HERE).

The report, based on data collected after the EU referendum result, found that a net balance of 45% more surveyors saw a fall rather than an increase in homes being put on the market during June. This is the sharpest fall that the institution has recorded since it started gauging opinion on it in 1998.

UK SCIENCE AT RISK FROM POST BREXIT FUNDING FEARS

A survey of Russel Group universities has shown they are already coming under pressure to stand down from collaborations or abandon leadership roles because of fears that funding would not be guaranteed after the UK leaves the EU (HERE).

The 24 universities in the group are seen as the UK's leading scientific research institutions.

And in the Science & Technology Select Committee, the chair, Nicola Blackwood told Science Minister Jo Johnson (brother of Boris) that separating from the EU could threaten Britain's position as a scientific superpower (HERE). This was not just because of funding issues but also making it more difficult for EU citizens to come and work here,

TATA REFUSES TO GUARANTEE PORT TALBOT

Tata Steel have refused to guarantee the future of Port Talbot following their decision to merge its European steel operations with another steel business and following talks with Thyssen-Krupp, a hige German conglomerate (HERE). 

Of course, not guaranteeing is not the same as closing it down but it's obvious there is a lot of over capacity in European steel making and some plant closures must be a possibility.  This would have happened with or without Brexit.

DAVID DAVIS IS HOPELESSLY OPTIMISTIC ON TRADE

David Davis is full of optimism in a post on the Conservative Home website (HERE) but I think he is living in a fantasy world. He talks about our economy needing to move towards a more export-led growth strategy, based on higher productivity employment but doesn't explain why we needed to leave the EU to do it.

TELEGRAPH SAYS SIEMENS IN POST BREXIT U TURN

The Telegraph this morning is running a story about Siemens CEO Joe Kaeser saying they are committed to the UK (HERE) reversing an earlier report about a newly built wind turbine plant in Hull.  But in keeping with much that has been written since the referendum it is not quite right.

Firstly, Mr Kaeser says it's far too early to reach any conclusion about the Hull site and at the bottom of the piece about Siemens plans to build a factory for railway rolling stock is the key concern:

"Less clear is whether any trains would be for the export market, and exports are what the UK vitally needs to plug a current account deficit of 7pc of GDP". 

No one doubts we will still attract business to satisfy the domestic market but unless we export a lot more than we do we will be in serious trouble paying for imports.

UK MAY FACE EARLY EJECTION FROM EUROPOL

Lynne Owens, Director General of the National Crime Agency says we face being kicked out of Europol, Europe's cross border information sharing body when our membership comes up for renewal in May 2017 (HERE).

This would apparently mean we lose all access to a huge database of information on suspects, guns, cars and phone numbers linked to serious crime and terrorism and this might have an impact on our security.

1000 LAWYERS WRITE TO PM - REFERENDUM NOT BINDING

News organisations are reporting (HERE) a letter signed by 1000 lawyers saying the EU vote was not binding on the government and that parliament should debate it and set up a commission to examine the pro's and con's of EU membership before deciding.

They say the margin was too narrow and followed a lot of mendacious claims that might have swayed the result.  Also, if it was to be absolutely binding on the government a minimum of a two thirds majority should have been written into the rules for such a profound change.  Since it wasn't, the government is not bound by it.

RACISM IN THE AFTERMATH OF BREXIT

There has been a huge increase in reports of racial hatred and nowhere more than in Boston which has a substantial immigrant population. A report in the New York Times (HERE) shows how migrants are now being targeted by some local residents.

STOP TALKING THE COUNTRY DOWN SAYS SIMON HEFFER

Simon Heffer, a newspaper columnist, writes in the Telegraph that we've made the right choice and we should now stop talking the country down (HERE).  He is another one who thinks the remain camp "cheated and lied", Mark Carney is torpedoing the markets  and really everything in the economy is rosy after the Brexit vote.

Mr Heffer has spent virtually the whole of his adult life talking the country down and is in fact paid handsomely to do it.  We wait to see if he's right or not.

HOW AMERICA SEES BREXIT

The Washington Post yesterday (HERE) had an item entitled "The men who gave us Brexit have all destroyed themselves in two weeks flat". It explains, or tries to, how Boris, Gove, Farage have all disappeared after the cataclysmic events they started calling the events "The betrayals and the backstabbing. The revenge and the retribution".

Another article (HERE) is headed, "Once British politicians stop double-crossing each other, a tougher foe looms" referring to negotiations with the EU.

And finally, the same paper notes how Europeans have suddenly lost their appetite for referendums (HERE).

This is how the rest of the world sees us.

CROSS PARTY GROUP DISCUSSES LOOSENING UK TIES

A cross party group of parliamentarians are said to be discussing a new arrangement for the UK so that it becomes a more federal structure with each country becoming completely sovereign with full control over its own affairs (HERE).

They argue a radical solution is needed to prevent break-up of the UK after the Brexit vote.

BANK OF ENGLAND MEET ON THURSDAY

The pound began this morning drifting around $1.2960 and doesn't look as if it will recover much anytime soon. The BoE policy committee meets this week for the first time since the referendum and there is speculation that an announcement to cut interest rates or begin more quantitative easing (money printing) will affect the future direction of the pound - Bloomberg HERE

FRESH STARTS TRADE POLICIES

Andrea Leadsom's Fresh Start website has a number of policy documents including one on trade (HERE) which they call green papers although they are not official government documents at all.

The trade one is interesting because it reviews several options like the Norway and Swiss models as well as trading on WTO rules, the back stop if we trigger Article 50 and fail to get a trade agreement with the EU settled in two years and the other 27 members do not give us an extension.

SINGLE MARKET NO LONGER RELEVANT SAYS LEADSOM

Mrs Leadsom, in an interview with The Times (HERE), says the UK will just continue trading tariff free with the EU after Brexit - in spite of any number of warnings from senior politicians across the EU that we won't.  She is either quite brilliant or a complete fool. My money is on the latter.

More amazingly, Penny Mordant, in the same piece in The Independent claims, "... the unique selling point of Andrea is, that the other candidates haven't got anywhere near, is that she understands the single market and the free movement issue...."

An almighty awakening is coming.  Norman Tebbit has said he is backing Mrs Leadsom because Theresa May, widely seen as the best Home Secretary in years, hasn't been successful at the Home Office.  His premise seems to be because an extremely well respected and able politician has failed to solve the very difficult immigration issue, let's try a complete novice!  This is madness.

IMMIGRATION NOT TO BLAME SAYS UNIVERSITY PROFESSOR

A professor at Oxford university writing in the British Medical Journal has claimed that austerity rather than immigration was the reason so many voted to leave the EU (HERE).  He argues persuasively that European countries have a far better social model with less inequality and better health and living standards than we have.  I think this is right.

Professor Dorling writes: "The UK has been systematically underfunding education and training, increasing student loans and debt, tolerating increasingly unaffordable housing, introducing insecure work contracts, and privatising the services the young will need in future."

LONDON GENERATES 30% OF UK TAX REVENUE

A report by the Centre for Cities emphasises the importance of London to the UK.  It claims 30% of all UK tax revenues are raised in the city and between 2004/5 and 2014/15 the amount increased by £28Bn while tax generated from other cities like Birmingham, Glasgow and Leeds declined (HERE).

Given the importance London has, it will be interesting to see how any negotiations on future trade will protect it.  Unless the UK has unfettered access to financial services in the single market London will be damaged.  And while we are in the EU our partners had some incentive to help protect it. Once we begin negotiations to withdraw they will have every incentive to do the opposite and steal some of London's wealth.

POLL SUGGESTS EU MARKET ACCESS MORE IMPORTANT THAN IMMIGRATION

A poll carried out for The Independent suggests voters think retaining access to the single market is more important than controlling immigration (HERE).

However, as usual the headline masks the reality.  Remain voters think so by 76% to 12% but 67% of leavers believe controlling immigration is worth it whatever the consequences.  Amazing!

Apparently some people are prepared to sacrifice their own livelihoods in order to keep a few EU immigrants out.

JOHN LEWIS SAY POUND'S SLUMP COULD BE "BIG ISSUE"

The retailer John Lewis says the slump in the value of the pound could become a big issue next year. They import about two thirds of their goods and one third is purchased in dollars so prices will rise but not until the second half of 2017 because they are hedged for the next year or so (HERE).

SUPPORT FOR THE EU RISES IN MAINLAND EUROPE

According to Nigel Farage and Michael Gove, the EU referendum result was supposed to spark some kind of popular revolution in the EU with moves to demand referendums leading to an exodus of countries from the EU.

Polling carried out in Germany, Austria, Finland and Denmark and Italy all show increased levels of support for staying in the EU (HERE).

UK COSMETICS FIRM PLANS GERMAN FACTORY MOVE

Lush cosmetics, a British luxury cosmetics brand is giving UK employees the opportunity to move to a new factory in Dusseldorf according to Reuters (HERE). Staff at the Poole plant - which has 1,400 workers of 38 nationalities - are being offered the chance to fill vacancies in the Dusseldorf factory.

The German plant aims to supply most mainland European markets by the end of the 2016.

"We can now offer them jobs in Germany within the euro zone. We will certainly be moving some production. We were always planning to move European production there, but now we could make it much bigger than we had ever intended, if Brexit means we have to do that," said Director Hilary Jones.

GOVERNMENT RESPONDS TO ON-LINE PETITION

The government has given a response to the petition to hold  2nd referendum, as follows:

POUND BEATS ARGENTINE PESO TO BECOME WORST 2016 PERFOMER

Bloomberg are reporting that the pound this week overtook the Argentine peso as the biggest loser versus the dollar among 31 major peers in 2016 as investors continued to digest the fallout from Brexit (HERE).  They helpfully provide a bar chart to illustrate the embarrassment.

Prospering like never before.

GERMANS WOO BRITISH COMPANIES

As I have mentioned before, when (or if) we leave the EU, our former friends will become competitors and they will try to persuade banks and other companies to abandon the UK for cities in the EU.  Hanover is planning mailshots and advertisements to attract British businesses who may be concerned about an uncertain future to relocate (HERE).

FIRST ARTICLE 50 LEGAL CHALLENGE SCHEDULED FOR JULY 19th

The first legal challenge to whether article 50 needs parliamentary approval before it can be triggered is set for a preliminary hearing on July 19th in the high court (HERE).  The challenge has been brought by a British citizen Deir Dos Santos. Another challenge, on similar grounds, is being prepared by Mishcon de Reya.

A criminal barrister at Church Court Chambers in London, has posted an opinion arguing that politicians supporting the Vote Leave campaign might have opened themselves up to legal action for alleged misrepresentations over claims that quitting the EU would allow an extra £350m to be spent on the NHS. It claims politicians might have committed offences of misconduct in public office.  If anyone takes this up it will be interesting.

BBC REPORTS WE ARE IN TRADE TALKS WITH INDIA

The BBC is claiming this morning (HERE) we are in trade talks with India.  I hope people are not getting the impression this is about a trade deal because it's nothing of the kind.  Free Trade Agreements (FTAs) are the exclusive competence of the EU and if we unilaterally sign up to one we are in breach of the treaties we have signed up to.

Vote Leave Watch campaign launched to keep an eye on all the promises made

Some MPs and others have launched a campaign called Vote Leave Watch to hold pro-leave politicians to account for all the promises made during the campaign (HERE).  This is precisely what I intended when launching this blog.  It is clear to me that not everybody was taken in by the massive exaggerations and even outright lies, and many would have voted to leave come what may.

However, we are talking about a couple of percent of votes who, had they voted the other way, would have changed the result. If the lies influenced them, they should be exposed.

And as the economic and political problems begin to accumulate surely more people will realise what a huge mistake it was.  Also, as I have said before, as older people die and younger, pro Europe voters grow up, we will inevitably see a majority for rejoining.  Incidentally a new paper the New European is coming out and I've ordered a copy.

More property fund turmoil

Aberdeen Fund Management has announced it is halting trading in its property fund for 24 hours and devaluing it by 17% (HERE). Meanwhile, Legal & General, Foreign & Colonial and Dutch-owned Kames cut the value of their property funds. L&G cut the value of its £2.3bn fund by 10% – following a 5% cut last week – while F&C and Kanes both cut by 5%.

Presumably, this is all having a dire effect on the commercial property market and foreign direct investment into the UK. Prospering like never before.

Andrea Leadsom

There is some strange stuff coming out about Mrs Leadsom, one of the candidates for PM, on Buzzfeed (HERE).  Her charities are effectively bankrolled by her own brother-in-law (who also funds Open Europe an anti-EU website) and were started in 2012 as if it was an attempt to raise her profile as an MP.  She was elected in 2010.

Also, when starting a company  to purchase three properties in 2004 she describes herself as an "investment banker" something she now claims she is not.

All very odd.

Van Rompuy says freedom of movement not negotiable

Herman Van Rompuy, former president of the European Council, speaking to The Guardian (HERE) has made some astute observations as well as reconfirming that freedom of movement is not negotiable.  He said that Europe doesn't have any great powers any more, only middle ranking ones and there is no future for them to stand alone in a globalised world.

He also said David Cameron was warned about the referendum because the voters will always answer a different question to the one on the ballot paper.  I think we know what he means - now.