Brexit weekly news digest 25 February

Amidst the news that Honda has announced its intent to close its Swindon production line and pull out of the UK over Brexit concerns, in contrast Aston Martin have revealed that they are pushing on with the construction of their new plant in Wales.  Aston Martin are stockpiling parts with concerns about supply but, “Aston Martin CEO Andy Palmer said “I still have to believe that we’ll get to a proper and right decision because a no-deal Brexit is frankly madness”. 

Recent CBI survey data shows manufacturing output volume growth slowed in the three months to February.  Anna Leach, CBI head of economic Intelligence, said: “UK manufacturing activity has moderated at the same time as headwinds from Brexit uncertainty and a weaker global trading environment have grown.

“The time for Brexit compromise to support the UK manufacturing industry is now. The clock is ticking quickly towards crisis point. It is of critical importance that politicians of all stripes and on both sides of the channel come to agreement on the terms of a Brexit deal as soon as possible, to allow our manufacturers to continue to create, make and trade their goods with certainty.” 

England’s High Court on Tuesday gave Aviva, Britain’s second largest insurer,  approval to transfer around £9 billion in assets to a new Irish company. The High Court in London approved the transfer of policies after a hearing on Aviva’s application last week to move life insurance assets. It had previously secured court approval to move around £1 billion in general insurance assets. The move is part of a wider withdrawal of business and money by financial companies seeking to keep contracts and policies within the EU after Brexit. 

On Friday, alongside reports that a deal will not be done next week, Sterling took a dip against the Dollar once again. The dip is reported to be as a result of an unnamed official in Brussels said EU leaders would not complete a deal with Theresa May during an EU summit with the League of Arab States in Sharm el-Sheikh, scheduled for Sunday and Monday.  “There will be no deal in the desert,” the official said. 

The time is running out for bilateral trade agreements to be completed before the UK leaves the EU.  The UK won't be able to roll over an EU trade deal with Japan in time for a no-deal Brexit, Trade Secretary Liam Fox has said.  The trade department also said it would not be able to roll over the EU's customs union deal with Turkey on time.

Whereas Airbus senior vice president Katherine Bennett told the BBC’s Andrew Marr “There is no such thing as a managed ‘no deal’, it’s absolutely catastrophic for us” and that “some difficult decisions will have to made if there’s no-deal (...) we will have to look at future investments.”  Airbus have reported they have spent millions analysing their options for Brexit but fear the no deal scenario will not play out well for their business.

Whilst Royal Bank of Scotland has reported profits of £1.62bn for 2018, RBS chief Ross McEwan  said the UK economy faced "a heightened level of uncertainty related to ongoing Brexit negotiations".  He outlined that Brexit could have a bigger impact on the economy than the Bank of England has suggested. Mr McEwan said: "Larger corporations are pausing on their investments. And this cannot be good for the economy long-term because those large corporations then employ smaller businesses and individuals.

Islabikes, an SME, reports their stockpiling plans but their Director reports that ‘“Even if (Brexit) goes smoothly, we will end up with a drastically reduced operating profit at the end of the year because we had to spend all this extra money on warehouse space. And that’s money that we can’t invest in the future of the business.”

Whilst the issue of trading through the Irish border still appears to be one of the dividing issues, the group of MPs that are responsible for investigating the technological solutions  for frictionless border trade report that the process of implementation and adjustment to trade systems could take ten years in complete.