What’s happening? London rejects the calculation made by Brussels detailing the Brexit settlement bill, and a transatlantic trade deal remains a long way off.
Bickering over the settlement is the biggest part of any divorce. It was no surprise that the U.K. government said it didn’t accept the European Union’s calculation that London owes the bloc 47.5 billion euros ($56.2 billion). The figures account for ongoing commitments to programs the U.K. still is using. Asked whether Britain would refuse to foot the bill, Prime Minister Boris Johnson’s spokesman told reporters, “We don’t recognize that figure.”
There’s still no sign of a transatlantic trade deal. In an interview with Bloomberg Television, U.K. International Trade Secretary Liz Truss said she was focused on getting the “right deal” with the U.S. rather than clinching a quick one. Reaching an agreement by the end of 2021 would be “a very rapid timeline” and “extremely fast.”
Liz Truss, U.K. international trade secretary, arriving in Downing Street.
Photographer: Chris J. Ratcliffe/Bloomberg
Despite warnings of a post-Brexit exodus from the City of London, finance job openings in the capital almost tripled in June from a year ago. That’s according to data from recruitment firm Morgan McKinley. The U.K.’s imminent exit from Covid-19 restrictions have stoked optimism about the economy.
To keep global trade flowing, G-20 finance ministers should pursue a policy of “robust openness,” Bank of England Governor Andrew Bailey said on a panel hosted by the OECD. His remarks followed an unexpectedly sharp slowdown in Britain’s economic recovery, driven by a microchip shortage that prompted one of the biggest drops in manufacturing output on record.
Another surprise was U.K. inflation jumping to the highest level in three years in June, lifted by widespread price increases that challenge the central bank’s argument that the surge will be temporary. This all adds up to support the BOE governor’s pessimistic outlook for the long-term future of the British economy: slow growth and low productivity.
Against a backdrop of tense relations between London and Dublin post-Brexit, the U.K. is preparing a new law ending prosecutions linked to the Troubles in Northern Ireland. The government plans to introduce a statute of limitations applying to all cases before 1998, the year the Good Friday Agreement largely ended three decades of violence in the province.
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
U.K. goods trade with the EU edged higher in May. Imports and exports both improved five months into the post-Brexit era. Total exports of goods, excluding precious metals, increased 4.9% in May. That was driven by an 8% rise in exports to the EU, the latest data from the Office for National Statistics showed.
“The effect of new Brexit visa rules will only become fully apparent when people start traveling again, so in that sense, maybe the delta variant has pushed things back a little bit,” said James Smith, an economist at ING.
Check out Bloomberg’s monthly trade tracker to stay on top of the official data.
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