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Brexit weekly digest 8 April

After the continued political Withdrawal Deal deadlock in the Commons and a slight marginal adoption of the Cooper amendment, the Prime Minister has been faced with little choice but to return to the EU and ask for a further extension (or ‘flextension’ as the media have coined the phrase).

The extension is expected to be until the end of June but the EU have suggested they want to offer a longer extension term, up to a year. The UK government has also entered into talks with the opposition party to see where there are opportunities for alignment in order to break the stalemate. This means continued uncertainty for businesses with no immediate sign of a deal to leave the EU. The chances of leaving without a negotiated deal are ebbing, but the alternative arrangements are still to be decided. 

CNN summarise ten dire warnings from business leaders that the EU divorce deal must be completed immediately  with CEOs from Citigroup, Siemens and Airbus adding their views. 

Britain recorded its worst productivity performance in five years in 2018, deepening a problem that has plagued the economy since the financial crisis. Output per hour increased less than 0.5 percent, half the pace of 2017 and the poorest reading since 2013, according to Office for National Statistics data published Friday. One explanation for the weakness is that Brexit uncertainty is prompting companies to take on workers instead of investing in capital equipment, as hiring decisions are easier to reverse if there is an economically damaging departure from the EU. Productivity growth was faster in services than in manufacturing last year. 

Despite the possible extension to Article 50, BMW, which builds just over 15 percent of Britain’s 1.5 million cars, will continue with its movement its annual summertime shutdown to April  to “minimize the risk of any possible short-term parts-supply disruption in the event of a no-deal Brexit.” 

The New York Times report a harsh Brexit review from Peter Dixon, global financial economist of Commerzbank AG, “Multinational companies came here with a clear understanding that Britain would offer a stable place to do business in exchange for access to the European Union,” said Peter Dixon, a global financial economist at Commerzbank AG in London. “The Brits have reneged on that contract. It’s destroyed, if you like, the sense that Britain is such a great place to do business. It’s a credibility hit. It’s a deep wound.” 

Ford Auto are also still reflecting on their plans to remain in the UK. Ford Europe chairman Steven Armstrong said, “We love being in Britain, but it has to be competitive and if it’s not competitive then we’ll have to take whatever actions we’ll need to take to protect the business,” Armstrong told Reuters at an event in the Netherlands. 

The  NHS Wales is said to have stockpiled £4m worth of disposable supplies at an undisclosed warehouse location, enough to last 8 week, in case of disruptions to supply if no deal is reached in the coming weeks. 

The BBC has outlined ‘what could happen next’ at Brexit - next steps

Source: BBC at 05/04/2019



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