10/10/2017 - UK Prepares For No Deal on Customs - 10/10/2017
The U.K. set out contingency plans for leaving the European Union without a new Brexit deal on customs, as Prime Minister Theresa May warned that Britain must prepare for the worst. A planned Customs Bill will create a new “standalone” customs regime for the U.K., and ensure value-added tax and excise laws continue to function if the country crashes out of the bloc in 2019 without an agreement. The proposals come in a new so-called White Paper on customs after Brexit, published alongside a similar document on trade.
May says she wants talks to succeed but “it is also our responsibility as a government to prepare for every eventuality,” May told lawmakers in Parliament on Monday. The white papers “support that work including setting out steps to minimise disruption for businesses and travelers.”
Britain and the EU have until March 29, 2019 to negotiate a new deal, but talks have stalled over the question of how much the U.K. is willing to pay as it leaves.
The pound has become more sensitive to political noise in recent months and some strategists said Johnson’s departure, if it happens, could increase the chances of a “soft Brexit”, which might be positive for sterling in the short term.
The dollar steadied close to its highest level in ten weeks on Monday, with strong U.S. wages data at the end of last week giving investors’ confidence that the Federal Reserve will hike interest rates in December.
The greenback reached 14-year highs at the start of 2017, but it had spent most of the rest of the year weakening, as weak economic data as well as doubts over U.S. President Donald Trump’s ability to push through tax reforms weighed on the currency.
Since then, though, the dollar has recovered almost 3 percent against a basket of major currencies, on signs that Trump’s tax reform plans could be back on track, and on a firming-up of bets that the Fed will in December hike rates for the third time this year.
The closely watched non-farm payrolls report on Friday showed the first fall in U.S. employment in seven years, but investors reckoned that was down to the temporary effects of Hurricanes Harvey and Irma, and focused on the largest gain in U.S. wages since December.
09.30 – GBP – Manufacturing Production MoM; Forecast at 0.3% against a previous of 0.5%
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