BOE, Brexit and the next few years

April 8, 2018

April 8 – I read a really interesting article in the business section of the Sunday Telegraph today entitled Who will get the gig when Bank’s ‘rock star’ governor leaves? It dealt with a number of issues including Quantitative Easing and the Bank rate.

I’d thought for a while that the 400 plus bn QE should be left where it was, looked at now and then and unwound carefully, slowly and prudently when it was safe to do so, but not during this year or the transition period. I feel sure trade and other deals between the UK and EU  will go  well, but the UK mood music should be calm and supportive while they are going through.

Similarly with the bank rate. Hopefully, it won’t go up this year, but if it does rise, it’s once and small, unless there is a very good reason.

The article suggested ten candidates for the BOE position, all experienced in various ways. The four deputy governors seemed to offer the best all round choice and the continuity of an internal promotion. The ethos has changed since the financial crisis and the successful candidate should be experienced in the right areas, patient, calm, but responsive in an emergency, take a long view of unwinding QE and be wary of measures, such as rate rises, that stressed the economy. The Government is still completing its retrenching and Brexit, although progressing well, is naturally causing some uncertainty. So monetary policy would be helpful if it is placid and makes no noticeable attempts to restore the bank rate to normality at this stage.





Thoughts on GKN Takeover

April 1, 2018

April 1 – Last week the Business Secretary called in the successful takeover bid by Melrose. I imagine we will know the thinking behind his final decision in due course, 16 weeks usually. I read Will Hutton’s article in The Guardian today. It made a number of good points and ended with the proposal that people should not be allowed to swing in and affect the outcome of a bid, arguing that only shareholders in existence at the time of the bid itself should have a vote. A very interesting proposition and others have made it. If this type of takeover is considered inappropriate, then action of this kind is the only effective way of dealing with it.

I remember a number of years ago, in the financial crisis, discussing with a well-known neurobiologist in London was there any point in pleading with the dealers not to take risks. No use, he said, they won’t listen. So the tax came in and this may be the same sort of situation.

Would it be enough to bring in new regulations? I don’t know. My instinct is it would be better to stop this takeover and bring them in as well. There are 16 weeks for all interested parties to make their representations.




EU’s Initial Response to UK Framework

March 7, 2018

March 7 –  The EU’s draft response to PM May’s Friday speech is just that, a draft. A lot of negotiation lies ahead.

March 19 – The Draft Transition document has been agreed and will come up for ratification in a few days. The UK conceded where it had to; I’m reasonably satisfied, the whole matter is moving on and the points I was concerned about were included.

GKN; and the Brexiteers Letter

February 21, 2018

21st February – GKN – Glad to read the Business Permanent Secretary will be appearing before the Business Select Committee today and doubtless, we will be hearing more about the Department’s thoughts on the GKN takeover.

Brexiteers’ Letter – The letter submitted by the 62 Brexiteer MPs makes one salient point for me – the ability during the Transition period for the UK to make and sign international trade deals. The transition period itself has the potential to be finessed somewhat, but not that. After all, regulations can be reversed and might take a while to implement and the EU, from their point of view, are starting the trade deal with the UK first. So the global trade provision stands out as a sensible and not unreasonable red line.

EU Reform

February 14, 2018

February 14 – I find President Macron’s plans for modernising and reforming the EU very interesting. As he says, the EU has bigger issues at stake than getting bogged down in Brexit. So Brexit is best dealt with efficiently and expeditiously, within the time frame allowed. The EU has the opportunity to draw up a mutually advantageous trade deal with the UK, ahead of the global ones.

Brexit – Not Being in the Customs Union and Other thoughts on Transition

February 6, 2018

February 9 – The sticking points on a transition agreement – I think there would have to be an agreement on incoming EU nationals having full permanent rights during the transition period; wouldn’t have an issue with belonging to the Single Market and Customs Union during this 21 months, although it would be necessary to have some form of words on consultation on regulation and laws passed during the transition,  when the UK did not sit on the Council. The part about the UK having the right to make and sign international trade deals during transition would have to be guaranteed.

February 6 – As Michel Barnier says, there are certain automatic and unavoidable results of the UK not being in the Customs Union, but they are not insurmountable, that’s what negotiation is for.

Brexit – Second Phase

February 3, 2018

February 3 –  I hope the second phase of the Brexit negotiations goes well. The UK is seeking independence and international trade, including with the EU, and the EU wants to get on with a raft of important policies that will benefit the Institution. Don’t let the Brexit process overwhelm the end result.

Brexit – More Thoughts on Transition

January 28, 2018

January 28 – Brexit Transition –  In addition to the UK ability to make and sign trade deals around the world during transition, there must also be arrangements to cover UK non-voting at EU Council summits. The UK should be able to attend EU Council summits as an observer and reserve the right to put into abeyance any regulation or laws that seriously and detrimentally affect it.


Brexit – The Transition

January 26, 2018

January 25 – I don’t think there is any risk to Brexit.

Following the statements on transition by the UK and EU, negotiation will start on this phase next week.

It is essential for the deal on transition to contain a clause allowing the UK to begin negotiating and signing trade deals with non-EU countries. I believe the EU appreciates this. It will balance other concessions by the UK.


Possible Schedule for the next 36 Months

January 7, 2018

January 10 – Hope David Davis’s and Philip Hammond’s meetings in Germany go well today.  If not achieving what they are seeking yet, then not refused either.

January 8 – UK/EU – I imagine if someone were anticipating what the next 36 months would look like with regard to the UK’s leaving the EU, it could go something like this.

January – February 2018 – a practical transition deal drawn up, as soon as possible, but before March.

March 2018 mid month – achieving the framework of a trade deal in principle, the negotiation running alongside the transition at first, then speeding up alone.

November 2018 – achieving a workable, in principle, trade deal.

March 2019 – an agreed trade deal.

Then 21/24 months of ironing out the problems.