What’s happening? Millions of voters head to the polls across the U.K. Meanwhile, London’s economy is suffering more than other regions.

National, regional and local elections take place Thursday across the U.K. It’s the first opportunity voters have to register their satisfaction — or lack thereof — in the government’s handling of Brexit and the pandemic. If First Minister Nicola Sturgeon’s Scottish National Party gains an overall majority in Scotland, pressure will mount on Prime Minister Boris Johnson to concede a second independence referendum. In the very long term, that could lead to Scotland rejoining the European Union.

Just when you thought Brexit couldn’t get any uglier, France suggested it could cut off electricity to Jersey, deepening a spat with the U.K. over fishing rights. The British island off the northwest coast of Brittany imports about 95% of its electricity from France through undersea cables. “I would regret it if we have to do it, but we’ll do it if we have to,” said Annick Girardin, the French maritime minister. The U.K. and French navies dispatched military patrol vessels as a precautionary measure.

Brexit and the pandemic have bruised the London economy worse than other U.K. regions, raising questions about the capital’s ability to power the country’s recovery. Migrant workers that staffed the once-booming hospitality industry have left in their tens of thousands, and new visa rules after Brexit will make it harder for many of them to return. The
financial district is also suffering after Britain’s departure from the EU ended the automatic right of banks to do business on the continent.

Harnessing its post-Brexit freedom, the Bank of England is weighing easier regulations on small lenders who don’t pose risks to the financial system and aren’t internationally active. The change could set the BOE on a collision course with the EU, which has warned the U.K. that divergence from its rules could further crimp the City of London’s access to the continent.

At least the “Global Britain” project is surging ahead. The U.K. and India pledged a “quantum leap” in their relationship and said they aim to double their trade by 2030, after a virtual meeting between Prime Ministers Boris Johnson and Narendra Modi. Britain has been sending emergency equipment and oxygen to help India tackle a surge in infections.

Brexit critic Edwin Poots is favored to take over as first minister in Northern Ireland after Arlene Foster vacates the post. The member of the pro-U.K. Democratic Unionist Party is a staunch critic of the trade deal with the EU and is polling ahead of Jeffrey Donaldson, who is also standing in an election to lead the DUP on May 14. A survey found 44% of Northern Irish voters oppose a united Ireland, while 35% were in favor.

— Lizzy Burden

We aim to keep you up to date on how the U.K. navigates the world after Brexit. Got tips or feedback? Email us at beyondbrexit@bloomberg.net

Chart of the Week

Less Competitive

Brexit has made manufacturers less competitive in the EU market

Source: Centre for Economic Performance

Brexit has caused difficulties for more than three in five U.K. companies. That’s according to analysis of real-time data from the CBI by the London School of Economics Centre for Economic Performance. It listed border delays, customs costs and regulatory checks as the biggest headaches. A third said the U.K. leaving the EU had affected their costs or prices. Small companies, especially manufacturers, were the worst hit. 

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