‘Sterling tumbles to two-year low as market fears grow over no-deal Brexit’ (Financial Times)

  • The pound dropped 1.3% to $1.2230, a level not touched since mid-March 2017 when the UK triggered Article 50 and began the formal process of leaving the EU. It has been the worst performing major currency against the US dollar over the past one, three and six months.
  • Boris Johnson insisted an abrupt exit was ‘absolutely not’ the government’s assumption, and that a no-deal Brexit was a ‘million to one’ possibility…provided there is sufficient goodwill.’
  • However, Michael Gove, the minister in charge of no-deal planning, said that leaving without an agreement was now the government’s working assumption. Dominic Raab, the foreign secretary, told Sky News that European officials had been ‘pretty stubborn’ throughout the Brexit negotiations. 
  • Currency strategists at ING said: ‘With the new government rhetoric on the hard Brexit firming and the rising likelihood of early elections, sterling should remain under pressure.’

‘How Brexit uncertainty is weighing on UK manufacturing’ (Financial Times)

  • From British Steel’s collapse into insolvency and planned closures by Honda and Ford, through to Bombardier putting its Belfast aerospace operations on the block, there are fears that UK manufacturing is about to enter a period of decline akin to the 1980s, when the laissez-faire policies of Margaret Thatcher’s Conservative government allowed ailing industries to shrink or fold.
  • A no-deal departure from the EU, resulting in tariffs and customs checks, would be a serious problem for many manufacturers, who rely on frictionless trade to source components and export goods. PSA, the French owner of Vauxhall, has warned it will pull all production from Ellesmere Port if Brexit renders the plant unprofitable.
  • UK manufacturing output witness its sharpest monthly slump since 2002 in April – a drop of 4.1% – as carmakers implemented maintenance shutdowns to coincide with the original departure date of March 29th, and so avoid any hold-ups at borders.

Leo Varadkar invites Boris Johnson to Dublin’,  (BBC  News)

  • The pair have had their first phone conversation today, during which Mr Varadkar maintained there could be no reopening of the withdrawal agreement.
  • Mr Johnson wants to change the Brexit agreement and get rid of the Irish border backstop – the insurance policy to maintain an open border unless and until another solution is found. However Dublin and the EU have refused to consider this.
  • Mr Johnson reaffirms that any deal must be one that ‘abolishes the backstop.’

Sinn Féin repeats call for border poll if no deal (BBC News)

  • Sinn Féin President Mary Lou McDonald has said that if there is a no-deal Brexit and hard border, Boris Johnson must order an Irish border poll. She has also called on the Irish government to appoint a Minister tasked with preparing for Irish reunification.
  • Mrs McDonald said the party would meet with Mr Johnson during his visit to Ireland and remind him of ‘his obligations under the Good Friday and subsequent agreements including the provision for a unity referendum.’

Boris Johnson says farms will thrive as PM visits Wales’ (BBC News)

  • Mr Johnson is set to meet with Wales’ First Minister Mark Drayford who will tell him Brexit will be ‘catastrophic’ for Wales. It follows the Farmers’ Union of Wales president warning of ‘civil unrest’ in rural areas if the UK leaves the EU without an agreement.
  • Mr Johnson has said that making Brexit work for Britain’s farmers will mean ‘scrapping the Common Agricultural Policy and signing new trade deals.’ The farming industry is worth more than £6bn to the Welsh economy.
  • Welsh lamb will face at least 40% tariffs in a no deal scenario, and up to 30% tariffs on dairy products. Helen Roberts, development officer for the National Sheep Association in Wales, stated that this will be ‘absolutely catastrophic even if just for a few months.’
  • Agriculture and what will replace CAP farming subsidies are devolved to the Welsh Government, with Ministers proposing a grant scheme to replace EU funding – farmers are to be offered cash to carry out work that protects and enhances the environment.
Author

Jessica's practice focuses on international trade and anti-bribery work, encompassing customs, export control and sanctions matters. Jessica's trade work includes advising international clients on fast-moving and evolving EU and UN sanctions, notably in respect of Iran and Russia, and on compliance with UK and EU export controls. Her trade experience also includes advising on tariff classification and customs valuations. Jessica's anti-bribery experience includes assisting with investigations, and advising clients on compliance with anti-bribery laws. Jessica has also taken a lead role in monitoring Brexit-related developments; analysing how they will affect the UK's trading position generally, and clients' businesses specifically. She has helped clients begin to conduct risk assessments of how Brexit will impact their businesses, and has assisted them in developing tailored Brexit strategies. Jessica also presents at various seminars, webinars, and conferences on the complexities of Brexit. Jessica advises global clients on complex issues arising from international transactions and works with clients across a number of sectors including pharmaceuticals, defence, finance, aviation, energy, and telecommunications. Jessica has also worked previously in Paris, and is fluent in French.

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