Daily Market Report - 22/02/2016
Dominating the headlines this weekend was news David Cameron has called for his referendum on Britain’s membership of the EU to take place on 23 June. Speaking from outside Downing Street, the prime minister said he had secured a good deal with Brussels to give the UK a special status and leaving the EU would “threaten our economic and national security”.
Key points from the deal;
Sovereignty - Cameron has secured a commitment to exempt Britain from "ever closer union" to be written into the treaties. He has also negotiated the inclusion of a "red-card" mechanism, a new power. If 55% of national parliaments agree, they could effectively block or veto a commission proposal.
Migrant Benefits - Cameron had to compromise on this aspect of the deal in the face of strong opposition from Poland and three other central European countries. He got the four-year "emergency brake" on in-work benefits he had set such store by - but new arrivals will have their tax credits phased in over four years.
Mr Cameron failed in his original demand to ban migrant workers from sending child benefit money back home.
The UK government has already reached an agreement on out-of-work benefits. Newly arrived EU migrants are banned from claiming jobseeker's allowance for three months. If they have not found a job within six months they will be required to leave.
The Council would authorise that Member State to limit the access of newly arriving EU workers to non-contributory in-work benefits for a total period of up to four years from the commencement of employment.
Economic Governance - Cameron won guarantees that countries outside the eurozone, such as Britain, will not be required to fund euro bailouts and will be reimbursed for central EU funds used to prop up the euro.
The cabinet formally agreed to campaign to stay in despite several ministers openly supporting a Brexit with Boris Johnson a high profile supporter of leaving the EU.
Our Justice secretary Michael Gove has said that the European Union is encouraging extremism across Europe as he joined five other cabinet ministers in breaking ranks with David Cameron to campaign to take Britain out of the EU. Gove, one of the prime minister’s closest political friends, posed for for a photo with his cabinet colleagues at the headquarters of the Vote Leave campaign group shortly after a rare Saturday cabinet meeting.
Friday’s data revealed US inflation continued to climb in January to a rate of 1.4 per cent opening the door for further interest rate hikes later this year. The figure revealed rising rents and medical costs lifted inflation to beat forecasts. This will abate fears that the Federal Reserve increased rates prematurely in December ahead of a period of market volatility and weaker global economic data. Solid labour market indicators, including strong payroll growth and healthy growth in real disposable income suggest that underlying US economic fundamentals remain sound.
All day – David Cameron faces MP's as he sets out EU deal