Brexit Bulletin: Talking the Talk

(Bloomberg) -- Today in Brexit: There’s deadlock in Westminster (again), with both sides under pressure not to compromise.

Parliament may be on its Easter break until April 23, but the tortured efforts to solve Britain’s Brexit crisis continue.

David Lidington, Prime Minister Theresa May’s de facto deputy, said Sunday that there’s common ground in talks with the opposition Labour Party. This week’s focus will again be on the issue of customs arrangements with the EU. Lidington said the government believes it’s possible to have the benefits of a customs union with the EU—which Labour wants—while retaining an independent trade policy, a key Conservative demand. Squaring that circle may be crucial to making a breakthrough.

Meanwhile both sides have little room to budge. Labour leader Jeremy Corbyn heads a party which wants to make a second referendum his price for supporting any deal, while May faced calls from former Tory leader Iain Duncan Smith to end the discussions, pull Britain out of the EU deal or no deal and resign as prime minister. 

There’s also some tension between the rank-and-file on both sides: Labour lawmaker David Lammy, a vocal proponent of another Brexit referendum, doubled down on comparing hardline Tory Brexit-backers to Nazis. The comments, aimed at members of the European Research Group, a Tory caucus, angered many Conservatives.

Away from Westminster, U.K. foreign secretary Jeremy Hunt is visiting Japan to reassure businesses about Brexit. He'll meet Japanese Prime Minister Shinzo Abe and executives from Toyota Motor Corp and Nippon Telegraph. Hunt’s office said he’ll reassure them the U.K. is focused on avoiding a no-deal Brexit and ensuring tariff-free, frictionless trade with the EU after Brexit.

With the state of talks back in London, that’s still some way off.

Today’s Must-Reads

  • This Brexit delay is a bond market opportunity, Bloomberg Opinion columnist Marcus Ashworth writes. Sterling, credit and interest rate markets are all calm, making now an ideal moment for corporate issuers.
  • Some member of Theresa May's Cabinet disagree with Iain Duncan Smith and  want her to stay on until Brexit is delivered, the Times reports. That backs up what Chancellor Philip Hammond told Bloomberg on Friday.
  • The City of London launched a lobbying blitz to secure its status after Brexit. The Financial Times looks at how that bid failed.

Brexit in Brief

Turbulent Times Expected | An increasing number of chief financial officers expect Britain's long-term business climate to worsen after Brexit, according to a Deloitte survey. More than 80 percent of chief financial officers surveyed at British companies predict a deterioration of business conditions, the most since the Brexit referendum in June 2016.

Finance Crunch | Job vacancies in London's finance industry have halved in two years as uncertainty over Brexit knocks confidence, a survey by recruiter Morgan McKinley has found. 

Anti-Establishment | John Longworth, the former boss of the British Chambers of Commerce, is the latest candidate to declare he’ll stand for Nigel Farage’s Brexit Party in the (probably) upcoming European elections. 

Homes Hope | Beleaguered London home sellers are hoping the extension of the Brexit process will bolster the property market in the coming months, Bloomberg's Lucy Meakin reports. There were signs of strength in April, when prices rose 1.1 percent. Meanwhile, London landlords  are increasingly investing their money in other parts of the U.K., reports Patrick Henry.

Slowing IPOs | The London Stock Exchange’s AIM market saw its slowest initial public offering activity in a decade in the first quarter of 2019, with only one firm listing. The Brexit backdrop is creating a wait-and-see approach among companies considering floats, accountancy firm UHY Hacker Young Group said.

Bitter Harvest | The average profitability of a farm will fall by almost a quarter across England whatever form Brexit takes, the Times reports, citing a government-backed Agriculture and Horticulture Development Board projection. Producers are bracing for sharply higher labor costs and fluctuating food prices.

Calling Time | Eagle-eyed readers might notice that we've removed our daily countdown to Brexit from the top of your Bullet. The fact is that it's getting harder and harder to know when Brexit might happen. Theresa May still wants to leave the EU by May 22, but the official deadline is now Oct 31. Unless it's extended again. And Brexit could happen at any point if Parliament passes a deal.

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