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Brexit live: Britain can expect to pay about €60bn to exit the European Union, says analyst

Brexit talks begin today in Brussels between the UK's key negotiator David Davis and the EU’s Michel Barnier
Brexit
Brexit negotiations have kicked off in Brussels

This thread on Brexit is closed but read back for all the latest on today's Brexit developments.

 

4.08pm: UK ill-prepared for for Brexit talks after general election, says analyst

Dennis de Jong, managing director at UFX.com, said Britain can expect to pay about €60bn to exit the European Union. 

“The EU, led by Chief Negotiator Michel Barnier, have made their position clear," he said.

"As well as non-negotiable stances on citizen’s rights and the Irish border, the EU expect Britain to pay every penny of what has already been committed to – a figure that could be around the €60 billion mark."

He added that Britain feel far less prepared after shock losses by the Tories in the general election.

“The UK government’s failure to secure a majority at the recent general election has weakened their hand significantly – while they may favour a ‘hard Brexit’, they have lost the mandate to deliver it," he said.

“There will be plenty of bumps in the road as both sides race to cover everything required before the March 2019 deadline, and with both sides likely to dig their heels in, there are long periods of political and financial volatility on the way across the continent – especially in Britain.”

 

3.12pm: Theresa May could be replaced as PM at later point, says Danske Bank

Theresa May is likely to stay on as Prime Minister for now but could be replaced at a later point in time, according to Danske Bank analysts.

The analysts said it is “not easy” for the Conservatives to get rid of May as Brexit negotiations begin and a leadership contest will only increase uncertainty.

“While, as expected, PM Theresa May is forming a minority government supported by the Democratic Unionist Party (DUP), the bigger question is whether she is a ‘dead woman walking’, as previous Chancellor of the Exchequer George Osborne put it,” they said.

A leadership contest could be triggered if 15% of Conservative MPs lose confidence or the Prime Minister resigns, the bank noted.

Danske Bank added that the European Union seems to be taking advantage of May’s weakened position after the general election resulted in a hung parliament.

“EU sources say it will take 12 months for the EU to change negotiating guidelines about the phased negotiations (first divorce bill, citizens’ rights and Irish border, second future relationship), which PM Theresa May has rejected, as she wants the talks about the withdrawal agreement and the future relationship conducted simultaneously.”

 

2.28pm: Michael Gove says economy must come first in Brexit talks

UK environment secretary Michael Gove has said the economy must take priority over the government's plans to cull immigration in the Brexit negotiations.

He told the BBC that no one wanted zero migration as “nobody wants to harm the economy”.

The government has promised to cut immigration to below 100,000 per year compared to 248,000 in 2016.

Gove’s remarks come as businesses urge the government to take into account their worries about losing access to Europe’s single market.

Chancellor Philip Hammond has called on a transition period for businesses to cushion the blow after Brexit.

 

1.47pm: Misleading politicians encourged Brexit vote, says BoE's Tenreyro

The Bank of England’s newest member, Silvana Tenreyro, has suggested Britain needs a new industrial policy to cope with Brexit, while blaming “misleading politicians” for encouraging people to vote to leave the EU.

In February she warned that Brexit would change many aspects of the UK economy.  She said: “There is still uncertainty about the scope and consequences that Brexit will have on the economy. (Let us not forget that Brexit has not happened yet!). I think the UK needs to think about industrial policy among many other policies. It is far from clear, however, that industrial policy will solve the problems the economy will likely face or that it will be enough to boost long term growth.”

Last July, Tenreyro said many of those who voted for Brexit were misled by politicians who blamed immigration for the UK’s issues.

“Immigration certainly played a role in the exit vote, and many voters (partly encouraged by misleading politicians) thought immigration was to be blamed for their problems, while those problems are more complex and date longer,” she said.

“Skill-biased technological progress, globalisation, and the fall of unions have created winners and losers, and the latter have not been compensated for their losses. They saw their standards of living deteriorate since the late 1970s, while at the same time salaries at the top of the distribution rocketed. Inequality is a critical issue in the UK and the West that needs to be addressed. Brexit was mostly an angry vote against the lack of progress of the bottom half.”

 

1.24pm:  EU offers to guarantee rights of Britons living in continent 

Theresa May has been urged by British nationals living in Europe to respond to the EU’s offer to guarantee their rights in Brexit negotiations.

The EU has officially offered to guarantee all the existing rights of Britons settled in Europe until Brexit but the British government is yet to respond.

Britons want the Prime Minister to agree to “repricocity” by allowing Europeans to stay tin the UK.

Jane Golding, the Berlin-based chair of British in Europe, said:

"The EU offer now gives us almost everything we need and abides by a core principle which both sides should respect – that the rights of citizens in place before Brexit (including the 3 million EU citizens in the UK) should remain unchanged. We applaud that, as well as the EU’s transparency in this matter.

“The EU offer gives plenty of detail and goes almost all the way to guaranteeing all our rights, but everything depends on how the UK decides to respond. We expect the UK, which has said it will be guided by the principle of reciprocity, to respond with similar magnanimity.”

 

12.39pm: European officials expect little progress on today's Brexit talks

European officials don’t expect much progress in Brexit talks today, The Independent reported, citing sources.

The meeting between Brexit Secretary David Davis and the European Union’s chief negotiator Michel Barnier is understood to be considered “window dressing”, according to the officials. 

WATCH: London Capital Group paints 'utterly complicated' picture as Brexit talks start

The officials suggested the progress on talks is likely to be held back by the government’s lack of clarity over its intentions.

Theresa May’s cabinet is said to be undecided over how to approach the talks with some urging a ‘soft Brexit’ and others threatening to resign if the Prime Minister abandons her plans for a ‘hard Brexit’.

Davis and Barnier will hold a press conference later with statements of an agreement on broad principle but one official told the newspaper: “The day will be a lot of window dressing, hand shaking and spoken words – but it’s not the day for real progress.”

 

 

11.56am: Investors to focus on tone of EU negotiators, says FXTM analyst

FXTM research analyst, Lukman Otunuga, said while Brexit talks will include the status of expats, the UK’s divorce bill, and Northern Ireland’s borders, investors may be more interested in the tone and stance of the European negotiators.

"Today could offer a rare opportunity for participants to gain further insight into the overall aim of European negotiators and if they plan to play hardball," Otunuga said.

"With political instability in Westminster placing the UK in a vulnerable position and Conservatives in a weaker position following the election, the outcome of the Brexit talks may heavily depend on what Europe wants.

"Although the prospect of a soft Brexit has the ability to support Sterling, I feel the currency remains vulnerable to further downside amid the confusion and ongoing uncertainty that Brexit presents.

"With Phillip Hammond sharing his concerns over the impact of having no deal, or even worse, a deal that drains the lifeblood of the UK economy, it will be interesting to see on what terms Britain will leave the European Union."

 

11.15am: David Davis and Michel Barnier begin Brexit talks

Brexit Secretary David Davis said he wants to work with the EU to build a “new, deep and special relationship” as he arrives in Brussels to begin negotiations with the EU’s chief negotiator, Michel Barnier.

In a statement to the press, Davis said his thoughts go out to the families and victims of the attack in London early this morning when a van driver ploughed into pedestrians near a Finsbury Park mosque, killing one person and injuring 10 others.

“It’s at testing times like these that we are reminded of the values and the resolve that we share with our closest allies in Europe,” he said.

“There is more that unites us than divides us. So while there will undoubtedly be challenging times ahead of us in the negotiations, we will do all that we can to ensure that we deliver a deal that works in the best interest of all citizens.”

Barnier said: “Welcome David. Today we are launching the negotiations on orderly withdrawal of the UK form the EU.

“Our objective is clear, we must first tackle uncertainties caused by Brexit. First for citizens, also for beneficiaries of EU policies and the impact on borders in particular Ireland. I hope that today we can identify priorities and the timetable that will allow me to report to the European Council later this week that we have a constructive start to negotiations.”

Davis and Barnier will first scope out a timetable for the negotations before taking an early working lunch. In the afternoon, officials from the UK and the EU will spend about two-and-a-half hours in working groups to creat a detailed plan in response to any agreement from Davis and Barnier.

A closing session between the two negotiators will start at 5.30pm before a press briefing. 

 

10.22am: UK may be able to secure 'soft' Brexit, says Germany's foreign minister

Germany's foreign minister Sigmar Gabriel has signalled that the UK may be able to secure a 'soft' Brexit that allows Britain to retain access to Europe’s single market.

Gabriel told Sunday's Welt am Sonntag newspaper in Germany that “maybe there is now a chance to achieve a so-called 'soft Brexit.'”

However, he said staying in the single market would require the UK to allow for the freedom of movement of EU workers.

Gabriel  also echoed the comments of French President Emmanuel Macron that the door remains open if the UK wanted to change its mind and stay in the EU.

IG's Josh Mahony said: "Comments from German Foreign Minister Gabriel has indicated that there is a ‘soft Brexit’ route for the UK, yet with free movement of labour required to enable access to the single market, it is clear that many would be left wondering whether this this is even a Brexit at all.

"The problem is that while the UK voted for Brexit, there is no clear structure of what were the most important elements that the negotiating team should aim to achieve. Certainly from the market’s point  of view, the ability to retain EU market access while allowing the UK to do global deals would be ideal."

 

09.35am: Brexit negotiations begin

Brexit Secretary David Davis starts negotiations in Brussels today almost a year after the UK voted to leave the European Union.

Davis will meet with chief EU negotiator, Michel Barnier, at the European Commission’s Barlaymont headquarters.

Subjects for the negotiations include the status of expats, the UK's divorce bill and the Northern Ireland border.

Neil Wilson, senior market analyst at ETX Capital, said: “The big question is what alimony is due, who gets to keep the house and car, and where the kids should live. It’s not you it’s me, Britain is saying.

“The EU will take its perfidious partner back any time, although with stricter rules. The trust is gone. Some think it’s better off without an unreliable spouse anyway.

“So it’s in this acrimonious environment that the process begins and that is going to make it tough going for investors looking for clues about whether we get a soft or hard Brexit, something that is between the two, or no Brexit. It would be easier for Britain if it knew what it wanted in the first place.”

 

08.59am: Philip Hammond calls for Brexit transition period

Chancellor Philip Hammond has called for a transition period for businesses in Brexit negotiations.

Hammond said there needs to be a buffer period to avoid a “damaging” outcome following demands from companies for a softer Brexit.

Five business groups have urged business secretary Greg Clark to “put the economy first” in negotiations. The BCC, the CBI, EEF, the Federation of Small Businesses and the Institute of Directors wrote a letter to Clark asking for continued access to the European single market until a final deal is secured.

“The most important ask from business – almost more important than what the end result looks like – is that we have a smooth path to get there. Because anything that created a cliff edge in 2019 would be very, very damaging to the UK economy,” Hammond said.

Hammond is due to speak at Mansion House in London tomorrow. 


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