17/09/2018 - Raab Confident as European Leaders Meet this Week

GBP

Britain and the European Union are “closing in” on a withdrawal agreement, Brexit minister Dominic Raab said on Friday, before a meeting of European leaders in Salzburg this week. “While there remain some substantive differences we need to resolve, it is clear our teams are closing in on workable solutions to the outstanding issues in the Withdrawal Agreement, and are having productive discussions in the right spirit on the future relationship,” Raab said after a phone call with EU chief negotiator Michel Barnier.

The Bank of England is well prepared for a disorderly Brexit and has planned for the worst, the bank's governor Mark Carney has said. Carney said the BoE had used “stress tests” to make sure the country's largest banks could meet the needs of households and business no matter what path Brexit takes. It was also reported late on Thursday that Carney had told senior ministers earlier in the day that a chaotic Brexit could lead to house price falls of up to 35 percent over three years as well as spiralling interest rates.

On Sunday Theresa May has told the BBC that MPs will have a choice between her proposed deal with the EU - or no deal at all. In an interview she is also critical of plans by Brexiteers to resolve the Irish border issue. Mrs May says that if Parliament does not ratify the Chequers plan "I think that the alternative to that will be having no deal".

The European Union is secretly preparing to accept a frictionless Irish border after Brexit in a move that raises the prospect of Theresa May striking a deal by the end of the year. In a concession to British concerns, EU negotiators want to use technological solutions to minimise customs checks between Northern Ireland and the Irish Republic.

Retail sales volumes in the UK rose by 0.7% last month on the previous month, and were 3.5% higher than a year earlier, above economists’ forecasts for a 0.2% monthly rise and a 3% annual gain. Online sales leapt to a new record with a 15.3% increase in July compared with the same month last year. Online sales by department stores also stood out with a 35% annual increase in sales.

Key Announcements

EUR- 09:00: Eurozone Inflation (YoY) August – Expected to be unchanged at 2%