UK: Brexit breakthrough – Lloyds Bank
|The breakthrough in Brexit talks on separation issues finally arrived and EU citizens’ rights and the financial settlement had already been agreed, but the main sticking point had been the Irish border after Brexit, according to analysts at Lloyds Bank.
Key Quotes
“The agreement guarantees no “hard border” in Ireland, even in the event of no future EU-UK trade agreement, but it also provides sufficient assurances for Northern Ireland’s unionists, including “no new regulatory barriers” with the rest of the UK without consent. The European Commission will now recommend at this week’s summit of EU leaders (Thu/Fri) that “sufficient progress” has been made and that negotiations should move on to a transitional deal and a new trading relationship. Discussions are expected to begin in the early part of next year, although it remains to be seen how quickly a transitional deal will be agreed in order to provide certainty for businesses.”
“Data wise last week, November UK services PMI dropped back to 53.8 from 55.6 in October, although the average so far for the quarter (54.7) is still above Q3 (53.5). The British Retail Consortium reported a 0.6%y/y rise in the value of like-for-like sales in November, led by higher food sales. Non-food sales, however, were down 1.2%y/y over the latest three months. The BRC said that Black Friday sales failed to shift underlying spending trends.”
“For this week’s official November retail sales figures (Thu), we have pencilled in a monthly fall of 0.4% in the volume of sales (excluding fuel). UK consumer price inflation (Tue) and labour market statistics (Wed) are also due. We expect headline CPI inflation to be unchanged at 3.0% in November and to start drifting gradually lower thereafter. Meanwhile, the unemployment rate for the three months to October is forecast to edge down to 4.2% from 4.3%, while annual average earnings growth is predicted to rise to 2.5% from 2.2%.”
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