LEADING THE WAY OUT OF THE EU

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Friday 2 August 2019 

It’s on. Donald Trump promises a mega trade deal with the UK that has the EU shaking. Talks are also underway between the UK and America’s northern neighbour. At home, the economy continues to shine. Consumer confidence is robust and rising, as is employment. Most importantly, the new government is planning like never before for No Deal Brexit.

BBC – Trump: US and UK working on ‘very substantial’ trade deal

Boris Johnson’s barnstorming arrival at Number 10 has won the Trump seal of approval. Speaking days after the massacre of Theresa May’s old cabinet, the US President vowed to secure a trade deal “five times bigger than what we’re doing” (see below). He revealed trade talks have already begun.

“I think it’s going to be sensational,” said the US ambassador to the EU, Woody Johnson.  “The UK is our most important ally, both in security and also in prosperity so you’re very important, and he [Trump] knows that. He’s made some comments about a free-trade agreement, and putting the UK at the front of the line… I think that’s what he’s focused on.” Meanwhile, Canada has pledged to smoothen transition towards a bilateral deal from the existing trade arrangement with the EU.

“When we’re out of the EU we’ll be ready to negotiate [with the United States] from the get go,” Britain’s trade commissioner for North America, Antony Phillipson told Bloomberg, adding that the UK has always been prepared for No Deal Brexit…

BBC – Sajid Javid tells HMRC: Make no-deal Brexit planning top priority

…Prepared before, better prepared now as newly installed chancellor, Sajid Javid has marked No Deal preparations down as the Treasury’s “absolute top priority”, making an extra £2.1bn available to hire more border force officers, upgrade infrastructure and stockpile medicines.

Telegraph – Britain’s EU contribution rises by 20 per cent in year, as UK’s booming economy props up Brussels’ budget

Britain’s already humungous payments to the EU’s wasteful coffers have risen by a whopping 20%. In the year ending March 31 budget transfers amounted to £15.5bn, a £2.7bn increase on the previous year, enough money to put 50,000 more police officers on the streets or fund 81,000 social care beds. The increase was brought about by rising British output, especially compared to the rest of the EU – the UK is the highest performing economy among the EU’s top four.

BBC – Consumers ‘more upbeat’ despite Brexit uncertainty

The improving performance of the British economy is being felt by consumers too. Market research firm GfK has recorded rising optimism on the back of ever-increasing employment and wages. “Consumers are marginally more bullish this month – with improvements in levels of confidence across most measures,” said Joe Staton, client strategy director at GfK.

Bloomberg – Brits Flock to Ferries as Brexit Delay Drives Surge in Demand

The Doomsayers would have you believe the fall in the pound has killed Britons’ appetite for travel overseas. Not so. Brittany Ferries observed a 15,000 hike in passenger numbers during the first two weeks of July compared to the same period in 2018. “We think there was a lot of late demand in the market.”

The Guardian – UK employment rate resilient despite Brexit uncertainty

Recruitment is on the up. A survey of more than 6,500 businesses by the British Chambers of Commerce has found that 60% of UK firms tried to recruit new staff during the second quarter of this year compared with 53% in quarter one.

Comment

Forbes – The Ever-Political IMF Meddlers Give Boris Johnson Unsolicited Advice

Esteemed US economist, professor Steve Hanke takes the IMF to pieces in a must-read column on the monetary fund’s interfering ways following a typically unnecessary and dismal economic forecast for the UK.

“Such meddling is nothing new for the IMF. Indeed, a bipartisan Congressional commission (The International Financial Advisory Commission, known as the Meltzer Commission) concluded in 2000 that the IMF interferes too much in the domestic politics of member countries.

Hanke cites exhaustive research by fellow economist Robert Barro.

“His damning evidence finds that a higher IMF loan participation rate reduces economic growth. IMF lending lowers investment. A greater involvement in IMF programs lowers the level of the rule of law and democracy. And if that’s not bad enough, countries that participate in IMF programs tend to be recidivists. In short, IMF programs don’t provide cures, but create addicts.”

Like a dealer prowling the streets for potential addicts to enfeeble, the IMF therefore has a huge incentive to assess countries’ economic prospects pessimistically.

“About all we can do is realize that the IMF is a political hydra with an agenda to serve the wishes of the political elites who allow it to grow new heads.”