Brits Count Cost as U.K.'s Brexit Pain Deepens

(Bloomberg) --

Britons woke up this morning to their cup of tea and news the pound had dropped to its lowest level since 2017 in response to the latest Brexit drama.

Some back from their holidays on the continent will have already felt how things have gotten worse – their money translating into fewer euros, fewer beers in the sunny resorts of southern Europe. The pain is real.

There is no relief in sight. More than three years on from the 2016 referendum on European Union membership. British politics have become a toxic daily brew with instability the new normal and another election potentially in the offing.

Against this backdrop, Parliament returns today with battle lines drawn between Prime Minister Boris Johnson, determined to keep open the option of leaving the EU without a deal on Oct. 31, and opponents across all parties equally bent on stopping him committing what they regard as economic suicide for the U.K. It’s hard to gauge at this point who will win out.

The showdown has some commentators evoking the English civil war almost 400 years ago, which cost a king his head in the struggle between the executive and the legislature.

The outcome could be anything from a Brexit delay to a snap general election. Once a byword for political stability, where the U.K. goes from here is anyone’s guess.

Global Headlines

Trade Struggles | Chinese and U.S. officials can't agree on a date, schedule or even basic terms of re-engagement ahead of a planned meeting later this month to try to solve the trade war between the world's two largest economies, Bloomberg News reports. The two sides have so far failed to agree on an American appeal to set parameters for the talks, as well as a Chinese request to delay new tariffs, according to officials.

Assistance call | Leading pro-democracy activist Joshua Wong used a trip to Taipei to call on Taiwan to help safeguard Hong Kong. Taiwanese President Tsai Ing-wen’s criticism of China over the Hong Kong protests has drawn rebukes from Beijing, which considers Taiwan a province.

• China today softened its tone, saying peaceful demonstrations were allowed in Hong Kong even as it ruled out a demand for direct democracy that has fueled the unrest.
• Beijing has sent regional state-run media organizations to Hong Kong in a bid to better control the narrative.

Soy hoarders | Farmers in Argentina are set to hold on to nearly 30 million metric tons of soybeans stuffed into silo bags and grain elevators for even longer after the government imposed currency controls. President Mauricio Macri resorted to the measures to try to halt a plunge in the peso and protect central bank reserves as a financial crisis grips the nation following a landslide opposition win in an August primary vote.

Xenophobic riots | The latest xenophobic violence in South Africa could not have come at a worse time for President Cyril Ramaphosa. Political and business leaders from nearly 30 countries are gathering in Cape Town for the World Economic Forum for Africa to hear a pitch for investment, amid images of thousands of rioters looting and torching foreign-owned shops in Johannesburg and the capital, Pretoria.

Paradise lashed | The Bahamas has suffered “unprecedented and extensive” damage, Prime Minister Hubert Minnis told reporters, after the Caribbean island nation was struck by the most powerful storm in its history. Parts of the northern Bahamas “are in the midst of a historic tragedy,” he said. At least five people have died. Hurricane Dorian continues to batter Grand Bahama and has caused widespread flooding in many islands of the northwest and central Bahamas.

What to Watch

• Italy faces another hurdle today in its bid to form a new government, when the Five Star Movement asks its members in an online vote if they support the party forming an alliance with the Democrats, formerly their sworn political enemies.

And finally … A Ugandan pop-star-turned-politician is on a mission to do what no one else has managed for more than 30 years: topple President Yoweri Museveni. Robert Kyagulanyi, known as Bobi Wine on stage, has emerged as the biggest threat to Museveni in the 2021 elections, thanks to his huge popularity among Uganda’s young, a third of whom are either unemployed or not in education. “We are into this to change our country,” Kyagulanyi, 37, said.

--With assistance from Rosalind Mathieson, Iain Marlow and Gordon Bell.

To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net

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