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Northern Powerhouse

Brexit Weekly Digest 2 December

The BBC speculate what would happen under a Conservative majority at the General Election quoting under Mr Johnson's Withdrawal Agreement.

The existing arrangements between the EU and UK would temporarily continue, with goods and services being allowed to flow freely across the various borders with the continent. That arrangement is due to end on 31 December 2020.  If Boris Johnson wins a majority, he says he would negotiate a Free Trade Agreement with the EU ready to go into operation at the end of 2020.

According to the CBI’s latest economic forecast, GDP growth for over the next two years is set to remain modest at 1.3% in 2019 and 1.2% in 2020. For 2021, the CBI forecasts a somewhat brighter outlook, with growth picking up to 1.8%.  This is based on the assumption that the UK exits the EU by 31 January 2020 and has clear line of sight to an ambitious trade deal, involving alignment with EU rules where essential for frictionless trade along with protection for UK’s world-beating services sector within the existing transition period.

British manufacturers cut jobs last month at the fastest rate since 2012, pressures from Brexit and a global trade slowdown caused the sector’s longest decline since the financial crisis. The IHS Markit/CIPS manufacturing Purchasing Managers’ Index (PMI) sank to 48.9 in November from 49.6 in October, a slightly smaller decline than an initial flash estimate of 48.3. But the PMI stuck below the 50 level that divides growth from contraction for a seventh consecutive month, the longest such run since 2009, as the country headed for an early election on Dec. 12 intended to end a parliamentary logjam over Brexit. “November saw UK manufacturers squeezed between a rock and hard place, as the uncertainty created by a further delay to Brexit was accompanied by growing paralysis ahead of the forthcoming general election,” IHS Markit economist Rob Dobson said.

Prime Minister Boris Johnson's plan to "get Brexit done" by the end of 2020 risks creating "the biggest crisis of Brexit to date", former ambassador to the European Union, Sir Ivan Rogers has warned. The transition period is designed to give businesses and people time to prepare for life outside of the EU. During that time, the UK will continue to follow EU trading rules. Rogers, who resigned as the UK's most senior representative to the EU in 2017, said Johnson's "get Brexit done" approach meant a fresh crisis in 2020 was "virtually inevitable," as there won't be enough time to negotiate a new trade deal.

With an upcoming general election adding to Brexit-related uncertainty about the outlook, UK businesses report falling output and orders in November. The weak survey data puts the economy on course for a 0.2% drop in GDP in the fourth quarter, and also pushes the PMI further into territory that would normally be associated with the Bank of England adding more stimulus to the economy.

NHS drug prices, chlorine-washed chicken and secretive courts: What do US-UK trade documents tell us about life after Brexit?

The British car industry has delivered a bleak warning over the danger of a no-deal Brexit, saying it would devastate UK motor manufacturing at a cost of more than £40bn in lost production by 2024. About 1.5m fewer cars would be produced by British factories in the next five years, manufacturers warned, should the industry fall back on World Trade Organisation (WTO) rules – whether in a direct no-deal Brexit or at the end of the transition period in Boris Johnson's withdrawal deal. The Society of Motor Manufacturers and Traders said that new independent research showed tariffs could add £3.2bn a year to costs in Britain, equivalent to 90% of the industry’s research and development budget.


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