Brexit risks to UK economy in focus as Hammond, Carney speak

[webfact]

Brexit risks to UK economy in focus as Hammond, Carney speak

By William Schomberg

 

FILE PHOTO - Britain's Chancellor of the Exchequer Philip Hammond leaves 11 Downing Street, London, March 14, 2017. REUTERS/Toby Melville/File Photo

 

FILE PHOTO - Bank of England Governor Mark Carney speaks during the central Bank's quarterly Inflation Report press conference at the Bank of England in the City of London, Britain May 11, 2017.REUTERS/Adrian Dennis/Pool

 

LONDON (Reuters) - The two men in charge of Britain's economy are expected to spell out on Tuesday how they plan to prevent a further hit to its already weakened growth prospects following the launch of the country's historic Brexit talks.

 

A day after British and European Union negotiators met for the first time in Brussels, Chancellor of the Exchequer Philip Hammond and Bank of England Governor Mark Carney will deliver speeches they postponed last week because of a deadly fire in a London housing block.

 

Britain went from being one of the fastest-growing economies among the Group of Seven nations in 2016 to its slowest in early 2017 as the fall in the value of the pound after the Brexit referendum pushed up inflation and hit consumer spending.

 

While the drag from inflation on the world's fifth-biggest economy is likely to fade next year, Hammond and Carney have both stressed the importance of avoiding a so-called hard Brexit in 2019.

 

At the weekend, Hammond revived his opposition to an abrupt departure from the EU, calling for a phasing-in of Britain's new trade and regulatory relationship with its main trading partner.

 

"If we are going to radically change the way we work together, we need to get there via a slope not via a cliff edge," he told BBC television on Sunday.

 

His tone was less confrontational than that of Prime Minister Theresa May, who repeatedly said no deal with the EU was better than a bad deal before she was weakened by failing to win a parliamentary majority in an election this month.

 

Hammond had looked set to lose his job until May's election flop. He has now re-emerged as big business' leading proponent in government and might provide more details on Tuesday on how he thinks the two-year Brexit process should run.

 

Hammond may also give more details of his budget plans after saying on Sunday that he was "not deaf" to the weariness of voters to nearly a decade of spending cuts for many services and tight controls on public sector pay.

 

The combination of rising prices and slowing wage growth represents a challenge for the Bank of England and its top policymakers, three of whom voted last week to raise interest rates to head off the acceleration of inflation.

 

They were outvoted by five rate-setters, led by Carney, who kept borrowing costs at their record low. But the unexpectedly close vote spurred a brief surge in the value of the pound <GBP=> and government bond yields <GB10YT=RR>.

 

Investors want some clarity from Carney on Tuesday about whether he shares the concerns about inflation or is putting more weight on the hit to spending power of consumers which would suggest he sees no rush to raise rates.

 

The Confederation of British Industry on Tuesday raised its growth forecasts for 2017 to reflect the economy's strong end to 2016, but said quarter-on-quarter growth would be stuck at around 0.3 or 0.4 percent until the end of 2018, roughly half the average seen since 2013.

 

The speeches by Hammond and Carney are expected to be published at 0730 GMT.

(Writing by William Schomberg; Editing by James Dalgleish)

 

-- © Copyright Reuters 2017-06-20

[Khun Han]

Phasing in is fine, so long as it's just that. We need to get off the German teat, and soon. Said teat won't be even remotely comforting once we've reached the point of no return. Ask Greece.

[boomerangutang]

I think the primary sentiments among Brit voters (re the Brexit vote) was runaway immigration into the UK.   Yet, now the primary concerns seem to all revolve around money issues.   Message to my Brit brethren who voted for Brexit;  be careful what you wish for.  It's kinda like the Brit pensioner who comes to Thailand, finds a darling brown-skin bar girl, and chooses to marry her - thinking the rest of his life will now be great sex and contentment.   Realities are most often a lot different than best laid plans (pun intended).

[Yann55]

I would say 'som nam na' ... if it weren't for the fact that Britons who voted against  Brexit will be as sorely affected as the bigoted, xenophobic and deluded nicompoops who supported it.

[Laughing Gravy]

14 minutes ago, Yann55 said:

I would say 'som nam na' ... if it weren't for the fact that Britons who voted against  Brexit will be as sorely affected as the bigoted, xenophobic and deluded nicompoops who supported it.

Oh dear not that old, you have a different political opinion from me so you are bigoted, xenophobic etc etc. Very tiresome, false and truly shows any understanding of why people voted for Brexit. May I kindly suggest you go to the 'drawing board' with some real reasons people voted for brexit and not the left wing, liberal media rubbish that you are sprouting.

[evadgib]

Secretary of State David Davis' statement following the opening of EU exit negotiations

[Jonnapat]

To all you pro Brexiteers, let me say, just wait a few more years when the divorce is settled and you will then see the true folly of it all.

As for the person who talked about left wing liberal media, it's actually hard to find much in the UK. Everything is lead by the Mail, Sun ,Express and Telegraph, all right wing, xenophobic outlets as anyone could see during the election campaign. 

Europe will sail along while the UK, with the worst cabinet in living memory , will be left floundering

 

[pegman]

From best performing G7 economy to worst in a single year. Well done Brexiters!

[Laughing Gravy]

7 minutes ago, pegman said:

From best performing G7 economy to worst in a single year. Well done Brexiters!

I suggest you look at the facts and do some research. The forecast you mention is for the 3 months this year. lets see what it is like in two years time.

 

Brexit started yesterday so how can it be Brexits fault? It was sunny yesterday in the UK. That was due to brexit was it.  Look at the rest of the G7 and you will see the cycle of economies and the UK is doing quite well thank you.

 

 

[the guest]

Trouble is most of  'UK' industry is run and owned by foreigners, so it will be interesting to see the outcome of the negotiations. I think if these do not go well (as anticipated) then Britons will be exposed to the truth of the 'real' condition of the country. Lest not forget who runs the country, the 1%, who after all caused the 'great' sell-off  which managed to con the public in convincing privatization was a far better option than the former. It also tells the story of how weak and uninformed the British public really are, hence the Brexit. Either way its not looking good for the country as a whole.  

[dick dasterdly]

"While the drag from inflation on the world's fifth-biggest economy is likely to fade next year, Hammond and Carney have both stressed the importance of avoiding a so-called hard Brexit in 2019."

 

This pretty much says it all - the media and 'the establishment' are determined to ensure that 'the established authorities' remain in charge - despite any cost to ordinary brits.....

[Baerboxer]

5 hours ago, boomerangutang said:

I think the primary sentiments among Brit voters (re the Brexit vote) was runaway immigration into the UK.   Yet, now the primary concerns seem to all revolve around money issues.   Message to my Brit brethren who voted for Brexit;  be careful what you wish for.  It's kinda like the Brit pensioner who comes to Thailand, finds a darling brown-skin bar girl, and chooses to marry her - thinking the rest of his life will now be great sex and contentment.   Realities are most often a lot different than best laid plans (pun intended).

 

Indeed. The Guardian have some good articles going on this at the moment. A great many deliberate lies were told and false promises made to entice people to vote to leave.

Now the stark reality is people are getting better informed and seeing through lies and realizing those making the promises have buggered off or simply ignoring them.

 

A buggers muddle has been created in good old British farce tradition. Only the outcome is likely to be very different from that imagined.

[dunroaming]

The true cost of Brexit will not be known for some considerable time.  It is good that May has been put on the sideline with her stupid approach.  It is going to be a long two years though and I have no faith in the UK's negotiators at all.

 

 

[Retiredandhappyhere]

7 hours ago, Yann55 said:

I would say 'som nam na' ... if it weren't for the fact that Britons who voted against  Brexit will be as sorely affected as the bigoted, xenophobic and deluded nicompoops who supported it.

Your arrogance in labelling the 52% of those who voted for Brexit as "bigoted, xenophobic, and deluded nincompoops" says much more about you as it does about them. Clearly (and mistakenly) you believe you are an absolute genius being part of a minority living amongst a majority who are clueless.  You must be absolutely devastated that your genius was not fully recognised by the plebs at the Brexit referendum and that in this unfair world, you now have to share the consequences along with them.

[Retiredandhappyhere]

7 hours ago, Yann55 said:

I would say 'som nam na' ... if it weren't for the fact that Britons who voted against  Brexit will be as sorely affected as the bigoted, xenophobic and deluded nicompoops who supported it.

I am glad to see that the people who voted to eventually become citizens of the proposed  "United States of Europe"  will be affected in the same way as those who voted against it. It is called democracy and there is not too much of that about in the way the EU is run, and I suspect there will be even less of it when Macron and Merkel speak for all 27 Nations without talking to their leaders and even less to their voters first.

[boomerangutang]

7 hours ago, Yann55 said:

I would say 'som nam na' ... if it weren't for the fact that Britons who voted against  Brexit will be as sorely affected as the bigoted, xenophobic and deluded nicompoops who supported it.

                              Not much different than the US election vote.  A smaller % of American voters voted for Trump than for HRC, yet they won the contest.  Now ALL Americans are having to suffer the consequences.  I don't feel as strongly about Brexit as I do about the US election (I'm American), but I trust that the Brits make the best of it, Beefeaters, and all.

 

                          Brits have suffered some losses in the distant past:  Viking and Norman invasions, for example, but always pull through rather well.  Just think, if the Vikings weren't so successful, there would be a lot less blondes in the UK.   And if William hadn't won at the Battle of Hastings, there would be a lot less French words in the English language.  Good or bad?  je ne sais pas.

[Retiredandhappyhere]

6 hours ago, Jonnapat said:

To all you pro Brexiteers, let me say, just wait a few more years when the divorce is settled and you will then see the true folly of it all.

As for the person who talked about left wing liberal media, it's actually hard to find much in the UK. Everything is lead by the Mail, Sun ,Express and Telegraph, all right wing, xenophobic outlets as anyone could see during the election campaign. 

Europe will sail along while the UK, with the worst cabinet in living memory , will be left floundering

 

Most of those who voted in the Brexit referendum already recognised the true folly of being in the EU, which was a totally different proposition to being in the former "Common Market", which in itself was a great idea. Arrogant and ambitious politicians gradually ruined the whole project. 

[chrissables]

8 hours ago, Yann55 said:

I would say 'som nam na' ... if it weren't for the fact that Britons who voted against  Brexit will be as sorely affected as the bigoted, xenophobic and deluded nicompoops who supported it.

What a <deleted> to class everyone who wished for independence from the corrupt EU as you have. I presume you did some extensive research into the people, or just read the Guardian and decided they must be right.

[evadgib]

Related links for the Doom and Gloomers:

 

Dr Liam Fox travels to US on first international trade visit since the General Election

 

Joint release by the UK International Trade Secretary and U.S. Trade Representative Robert Lighthizer

 

Mansion House 2017: Speech by the Chancellor of the Exchequer

 

Edited June 20, 2017 by evadgib

[Grouse]

4 hours ago, dunroaming said:

The true cost of Brexit will not be known for some considerable time.  It is good that May has been put on the sideline with her stupid approach.  It is going to be a long two years though and I have no faith in the UK's negotiators at all.

 

 

Cost? COST? It's supposed to be a benefit?

[DaveE13]

8 hours ago, boomerangutang said:

                              Not much different than the US election vote.  A smaller % of American voters voted for Trump than for HRC, yet they won the contest.  Now ALL Americans are having to suffer the consequences.  I don't feel as strongly about Brexit as I do about the US election (I'm American), but I trust that the Brits make the best of it, Beefeaters, and all.

 

                          Brits have suffered some losses in the distant past:  Viking and Norman invasions, for example, but always pull through rather well.  Just think, if the Vikings weren't so successful, there would be a lot less blondes in the UK.   And if William hadn't won at the Battle of Hastings, there would be a lot less French words in the English language.  Good or bad?  je ne sais pas.

And if Harold hadn't marched all the way to Stamford bridge to defeat the vkings then march all the way back in quick time to fight the Normans the Saxons may have won.