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IMF welcomes Brexit progress but cautions timeframe is ambitious – business live IMF welcomes Brexit progress but cautions timeframe is ambitious – business live
(35 minutes later)
Christine Lagarde has insisted she and the IMF were right to be gloomy about the implications of a leave vote in the runup to the EU referendum in June 2016.
She said the numbers on the UK economy today were proving the point, adding UK growth is “a bit of a disappointment” compared with other countries.
Here is a reminder of Lagarde’s predictions before the vote:
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The UK chancellor Philip Hammond says he agrees with the IMF on the urgent need for a Brexit transition deal.
One of biggest boosts we can provide to our economy is making early progress on delivering certainty and clarity about our future relationship.
The IMF is clear that the Brexit vote is already weighing on the UK economy.
Growth in the first three quarters of 2017 was slower than a year ago. Despite a strong recovery in global growth and supportive macroeconomic policies, the impact of the decision to exit the European Union has weighed on private domestic demand.
The employment rate has remained around record highs, but the sharp depreciation of sterling following the referendum pushed up consumer price inflation, squeezing household real income and consumption.
Business investment growth has been lower than would be expected in the context of strong global growth and high levels of capacity utilisation, owing to heightened uncertainty about economic prospects.
The Washington-based fund is predicting UK growth slowed in 2017 to 1.6% in 2017, from 1.8% in 2016. It is expected to slow further in 2018 to 1.5%.
IMF’s @Lagarde on Brexit vote and invoking of Article 50: “These two decisions are already having an impact on the economy.”
Here is what the IMF had to say about the ambitious nature of the timeframe for Brexit talks.Here is what the IMF had to say about the ambitious nature of the timeframe for Brexit talks.
Recent progress in negotiations between the UK and EU is welcome. Both parties have reached agreement in principle on citizens’ rights, on Northern Ireland, and on the financial settlement. While the ultimate outcome of the next phase of discussions is for the UK and EU to determine, an agreement that minimizes tariff and non-tariff barriers and ensures that firms have access to the labor they need would best support growth.Recent progress in negotiations between the UK and EU is welcome. Both parties have reached agreement in principle on citizens’ rights, on Northern Ireland, and on the financial settlement. While the ultimate outcome of the next phase of discussions is for the UK and EU to determine, an agreement that minimizes tariff and non-tariff barriers and ensures that firms have access to the labor they need would best support growth.
The list of tasks that remains to be accomplished is very long, and the timeframe to do so is ambitious. They include agreeing on a trade deal with the EU, negotiating new arrangements with around 60 countries to replace those to which the UK is currently party via its membership in the EU, bolstering human and IT resources in customs and other services, and translating many thousands of pages of EU law into UK domestic statute.The list of tasks that remains to be accomplished is very long, and the timeframe to do so is ambitious. They include agreeing on a trade deal with the EU, negotiating new arrangements with around 60 countries to replace those to which the UK is currently party via its membership in the EU, bolstering human and IT resources in customs and other services, and translating many thousands of pages of EU law into UK domestic statute.
The government has set aside a budgetary allocation to support Brexit preparations. Early agreement on a transition period would avoid a cliff edge exit in March 2019 and reduce the uncertainty facing firms and households.The government has set aside a budgetary allocation to support Brexit preparations. Early agreement on a transition period would avoid a cliff edge exit in March 2019 and reduce the uncertainty facing firms and households.
IMF publishes staff’s 2017 annual economic health check on UK economy https://t.co/T3i6r1mOwKIMF publishes staff’s 2017 annual economic health check on UK economy https://t.co/T3i6r1mOwK
The International Monetary Fund has welcomed progress on Brexit talks but warned the timeframe is ambitious because of the long list of tasks to address.The International Monetary Fund has welcomed progress on Brexit talks but warned the timeframe is ambitious because of the long list of tasks to address.
The fund predicts the UK economy will grow by 1.5% in 2018.The fund predicts the UK economy will grow by 1.5% in 2018.
Christine Lagarde is in London to present the IMF’s annual review of the UK economy at the Treasury.Christine Lagarde is in London to present the IMF’s annual review of the UK economy at the Treasury.
As tradition dictates, Lagarde will be introduced by the chancellor, Philip Hammond, when the press conference kicks off shortly.As tradition dictates, Lagarde will be introduced by the chancellor, Philip Hammond, when the press conference kicks off shortly.
In the run-up to the referendum, Lagarde predicted a leave vote would result in a stock market and house price crash.In the run-up to the referendum, Lagarde predicted a leave vote would result in a stock market and house price crash.
A setback for Uber this morning after the European court of justice (ECJ) ruled it is a transport services company, subject to the same rules as other cab firms.A setback for Uber this morning after the European court of justice (ECJ) ruled it is a transport services company, subject to the same rules as other cab firms.
Uber had argued that it is a computer services business, after a challenge brought by taxi drivers in Barcelona.Uber had argued that it is a computer services business, after a challenge brought by taxi drivers in Barcelona.
The decision in Luxembourg will apply across the whole of the EU, including the UK.The decision in Luxembourg will apply across the whole of the EU, including the UK.
Here is our full story on the ruling:Here is our full story on the ruling:
Michael O’Leary, the outspoken and often controversial boss of Ryanair, has been asked by MPs to answer allegations by workers that the airline sometimes pays less than the minimum wage.Michael O’Leary, the outspoken and often controversial boss of Ryanair, has been asked by MPs to answer allegations by workers that the airline sometimes pays less than the minimum wage.
The work and pensions committee and the business, energy and industrial strategy committee (BEIS), have written to O’Leary following allegations by crew, published in the Daily Mail, that bosses “don’t treat us like humans.”The work and pensions committee and the business, energy and industrial strategy committee (BEIS), have written to O’Leary following allegations by crew, published in the Daily Mail, that bosses “don’t treat us like humans.”
Frank Field, chair of the work and pensions committee, said Ryanair workers “can rest assured” that MPs would be investigating further. He added:Frank Field, chair of the work and pensions committee, said Ryanair workers “can rest assured” that MPs would be investigating further. He added:
Sadly, it will not surprise me if the sorry picture painted here is true: a company that turned in £1.15bn profit last year squeezing its workers. People who work long, hard hours and have an important role in passenger safety, and yet apparently cannot count on receiving the National Minimum Wage – or even close to it.Sadly, it will not surprise me if the sorry picture painted here is true: a company that turned in £1.15bn profit last year squeezing its workers. People who work long, hard hours and have an important role in passenger safety, and yet apparently cannot count on receiving the National Minimum Wage – or even close to it.
Rachel Reeves, chair of the BEIS committee:Rachel Reeves, chair of the BEIS committee:
These allegations of hours of unpaid work, of charges for uniforms, of fees being incurred to leave, suggest a company falling well short of its duty to the staff who help their planes get off the ground and who spend the flight attending to and serving its paying customers. This appears to be evidence of a company trying to wiggle out of its basic responsibility to pay its workers the National Minimum Wage.These allegations of hours of unpaid work, of charges for uniforms, of fees being incurred to leave, suggest a company falling well short of its duty to the staff who help their planes get off the ground and who spend the flight attending to and serving its paying customers. This appears to be evidence of a company trying to wiggle out of its basic responsibility to pay its workers the National Minimum Wage.
Field and Reeves have asked O’Leary to answer a series of questions by Monday 8 January.Field and Reeves have asked O’Leary to answer a series of questions by Monday 8 January.
Investors across Europe are in a subdued mood this morning, with all the major indices following Wall Street lower.Investors across Europe are in a subdued mood this morning, with all the major indices following Wall Street lower.
Here are the scores so far:Here are the scores so far:
FTSE 100: -0.1% at 7,537FTSE 100: -0.1% at 7,537
Germany’s DAX: +0.1% at 13,231Germany’s DAX: +0.1% at 13,231
France’s CAC: -0.2% at 5,375France’s CAC: -0.2% at 5,375
Italy’s FTSE MIB: -0.4% at 22,191Italy’s FTSE MIB: -0.4% at 22,191
Spain’s IBEX: -0.1% at 10,224Spain’s IBEX: -0.1% at 10,224
Europe’s STOXX 600: -0.1% at 391Europe’s STOXX 600: -0.1% at 391
President Trump’s long-trailed tax reform bill cleared a major hurdle last night and this morning, making it through Congress and then the Senate.President Trump’s long-trailed tax reform bill cleared a major hurdle last night and this morning, making it through Congress and then the Senate.
A procedural issue means the bill will have to go back to a revote in Congress, but this appears to be a technicality and is not expected to derail the bill.A procedural issue means the bill will have to go back to a revote in Congress, but this appears to be a technicality and is not expected to derail the bill.
The progress failed to lift Wall Street on Tuesday however, in what CMC Markets’ Michael Hewson describes as a classic case of “buy the rumour, sell the news”.The progress failed to lift Wall Street on Tuesday however, in what CMC Markets’ Michael Hewson describes as a classic case of “buy the rumour, sell the news”.
Having teased, tantalised and promised the markets for most of this year that we would see some significant measures to reform the tax code it seems that US President is on the cusp of delivering some measures that, depending on who you listen to, are either transformative or unfair.Having teased, tantalised and promised the markets for most of this year that we would see some significant measures to reform the tax code it seems that US President is on the cusp of delivering some measures that, depending on who you listen to, are either transformative or unfair.
Having seen the bill pass through Congress fairly easily last night, and pass through the Senate this morning it seems increasingly likely that the bill will be signed into law by President Trump in the coming days, though it will need to go back to a revote in Congress after a procedural snag made last night’s vote invalid. That obstacle aside it now looks increasingly likely that just over a year since being elected that Trump is likely to have something to show for his first year as President.Having seen the bill pass through Congress fairly easily last night, and pass through the Senate this morning it seems increasingly likely that the bill will be signed into law by President Trump in the coming days, though it will need to go back to a revote in Congress after a procedural snag made last night’s vote invalid. That obstacle aside it now looks increasingly likely that just over a year since being elected that Trump is likely to have something to show for his first year as President.
The big question now is whether having seen stocks rise in anticipation of legislation being passed, that the current momentum is maintained or we see a case of “buy the rumour, sell the news” as we head towards the Christmas break.The big question now is whether having seen stocks rise in anticipation of legislation being passed, that the current momentum is maintained or we see a case of “buy the rumour, sell the news” as we head towards the Christmas break.
The United States Senate just passed the biggest in history Tax Cut and Reform Bill. Terrible Individual Mandate (ObamaCare)Repealed. Goes to the House tomorrow morning for final vote. If approved, there will be a News Conference at The White House at approximately 1:00 P.M.The United States Senate just passed the biggest in history Tax Cut and Reform Bill. Terrible Individual Mandate (ObamaCare)Repealed. Goes to the House tomorrow morning for final vote. If approved, there will be a News Conference at The White House at approximately 1:00 P.M.
Neil Wilson, senior market analyst at ETX Capital, says the Tesco/Booker deal could open the door to other deals.Neil Wilson, senior market analyst at ETX Capital, says the Tesco/Booker deal could open the door to other deals.
Given how easily this deal was approved, it leaves the door open for further significant consolidation in the sector and the potential for a major change in the UK retail space over the coming years. The case for consolidation is strong given the intense competition, heightened margin pressure and the emergence of new threats online. Retailers should be looking to strike now to secure their economies of scale.Given how easily this deal was approved, it leaves the door open for further significant consolidation in the sector and the potential for a major change in the UK retail space over the coming years. The case for consolidation is strong given the intense competition, heightened margin pressure and the emergence of new threats online. Retailers should be looking to strike now to secure their economies of scale.
For Tesco/Booker it’s a win on several levels. Cost synergies of around £200m a year, mainly from buying and distribution, are expected, although this could a lot more and may exceed £300m.For Tesco/Booker it’s a win on several levels. Cost synergies of around £200m a year, mainly from buying and distribution, are expected, although this could a lot more and may exceed £300m.
But as previously noted the 24% premium that Tesco paid for Booker takes some of the shine off the deal. And the big risk is that Tesco takes its eyes off the turnaround strategy. We note that big Tesco shareholders Schroders and Artisan Partners said it was too expensive and too risky. But on the whole the benefits from synergies should more than compensate for any risks to the turnaround.But as previously noted the 24% premium that Tesco paid for Booker takes some of the shine off the deal. And the big risk is that Tesco takes its eyes off the turnaround strategy. We note that big Tesco shareholders Schroders and Artisan Partners said it was too expensive and too risky. But on the whole the benefits from synergies should more than compensate for any risks to the turnaround.
Britain’s competition watchdog has given the go-ahead this morning to Tesco’s £3.7bn takeover of Booker, the cash-and-carry group that also owns brands including Londis and Budgens.Britain’s competition watchdog has given the go-ahead this morning to Tesco’s £3.7bn takeover of Booker, the cash-and-carry group that also owns brands including Londis and Budgens.
The Competition and Markets Authority had already given the provisional green light in November, so today’s announcement is a confirmation of that. The CMA concludes that the deal is not bad news for customers.The Competition and Markets Authority had already given the provisional green light in November, so today’s announcement is a confirmation of that. The CMA concludes that the deal is not bad news for customers.
Simon Polito, chair of the CMA’s inquiry into the deal, says in a statement today:Simon Polito, chair of the CMA’s inquiry into the deal, says in a statement today:
We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors. Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker.We have carefully listened to feedback from retailers and wholesalers who operate in what are highly competitive UK retail and wholesale sectors. Retailers have told us that they shop around for the best prices and service from their wholesaler, and we are confident that this will continue after Tesco buys Booker.
This has been an important investigation for us. Millions of people use their local supermarket or convenience store to buy their groceries or essentials, so it is vital that they have enough choice to secure the best deal for them. Having examined the evidence in depth, we are satisfied this will remain the case following the merger.This has been an important investigation for us. Millions of people use their local supermarket or convenience store to buy their groceries or essentials, so it is vital that they have enough choice to secure the best deal for them. Having examined the evidence in depth, we are satisfied this will remain the case following the merger.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Christine Lagarde, head of the International Monetary Fund, is in London this morning to present the Fund’s annual health check of the UK economy.Christine Lagarde, head of the International Monetary Fund, is in London this morning to present the Fund’s annual health check of the UK economy.
She will give the presentation at the Treasury, following an introduction from the chancellor, Philip Hammond. The press conference kicks off at 10am.She will give the presentation at the Treasury, following an introduction from the chancellor, Philip Hammond. The press conference kicks off at 10am.
This year’s review will be closely scrutinised for the IMF’s latest take on how much of an impact Brexit might have on the UK economy. In the runup to the referendum, Lagarde was an outspoken opponent of Brexit, and warned a vote to leave the EU would result in a stock market and house price crash.This year’s review will be closely scrutinised for the IMF’s latest take on how much of an impact Brexit might have on the UK economy. In the runup to the referendum, Lagarde was an outspoken opponent of Brexit, and warned a vote to leave the EU would result in a stock market and house price crash.
How does the IMF now think the UK will fare? We’ll bring you its assessment as it comes in from.How does the IMF now think the UK will fare? We’ll bring you its assessment as it comes in from.
Also coming up:Also coming up:
11am GMT: The CBI’s distributive trades survey for December will provide the latest snapshot of how the UK’s retail sector is performing in the runup to Christmas11am GMT: The CBI’s distributive trades survey for December will provide the latest snapshot of how the UK’s retail sector is performing in the runup to Christmas
1.15pm GMT: Mark Carney, governor of the Bank of England will appear with colleagues at the Treasury Select Committee on the subject of financial stability1.15pm GMT: Mark Carney, governor of the Bank of England will appear with colleagues at the Treasury Select Committee on the subject of financial stability