Hammond Happy Carney Is Staying, No Budget News: Brexit Update

(Bloomberg) -- Chancellor of the Exchequer Philip Hammond takes questions in Parliament and Bank of England Governor Mark Carney has agreed to stay a bit longer to navigate Brexit.

Hammond says Carney staying is “in our interests” (3:53 p.m.)

Hammond, in comments to the House of Lords Economic Affairs Committee, said that Carney agreeing to stay on for another seven months is “very much in our interests.”

Here’s more: “If we leave the European Union without a deal, and that’s a contingency-planning scenario that we have to consider, on the 29th of March next year we could expect a period when there would be some turbulence and when there would be some issues arising for financial services businesses in adapting to the new situation they found themselves in.”

“A governor leaving at the end of June, his bags already packed, would be in a poor position to represent the U.K. in what might be some quite critical and time-critical negotiations over that period trying to find practical solutions to situations that might arise.”

“Getting him to agree to stay on for another seven months is very welcome. Of course when we go out to the market to appoint a successor the normal processes for that appointment will apply.’

Hammond says no announcement on budget date yet (3:35 p.m)

Hammond, opening his appearance before the Lords committee, said he was not in a position to announce when the Autumn Budget will be unveiled.

The possibility there could be a special EU summit on Brexit in November makes the date “difficult to fix,” he said in answer to a question.

He said he’s asked his fiscal watchdog, the Office for Budget Responsibility, to prepare for an Autumn Budget but the required 10-week notice period is a minimum, not a maximum.

Rees-Mogg to Unveil an Alternative Irish Border Plan (1:22 p.m.)

The pro-Brexit group of lawmakers led by Jacob Rees-Mogg will present their own plan for solving the Irish border riddle on Wednesday.

The aim is to make the border as good as any of the EU’s other external borders, he said.

“Now they may have manned posts, but that doesn’t make them impervious borders,” Rees-Mogg said. “So if you can make a border as good as those, (but) without manned borders, then you’ve answered the EU’s questions, and that’s what we’ll be trying to do tomorrow.”

The Sun reported on Tuesday that their plan included "flying squads" of inspectors in Northern Ireland.

McDonnell Shares Brexit Concerns with Goldman (1:04 p.m.)

Shadow Chancellor John McDonnell said he met Goldman Sachs bankers on Monday and they were "expressing the same concerns as us on Brexit."

McDonnell also told reporters he thinks there will be a general election sooner rather than later.

Carney stays on, Hammond tells Parliament (12:22 p.m.)

Carney will stay on in his role until January 2020, Chancellor of the Exchequer Philip Hammond announced. Drawing an end to days of mounting speculation, Hammond confirmed to lawmakers Tuesday that the Canadian, who had been due to step down in June 2019, will extend his term to help steer the U.K. economy in the wake of Brexit.

Hammond hints at end to freeze on fuel duty (12:12 p.m.)

Answering a question from the lawmaker Robert Halfon, who’s campaigned tirelessly for a freeze, the chancellor said the eight-year policy has cost the Treasury 46 billion pounds ($59 billion) with a further 38 billion pounds set to be foregone over the budget forecast period.

“For context, this is about twice as much as we spend on all NHS nurses and doctors each year,” he said.

It’s a prescient issue today as Prime Minister Theresa May is set to announce new funds to boost investment in electric vehicles. Environmental groups say the fuel-duty freeze discourages drivers from switching to cleaner cars. The headline rate on standard petrol and diesel has been frozen since 2011 at 57.95 pence per liter.

About whether Johnson vies for higher office (12:12 p.m.)

The Brexiteer meeting quickly moved away from economics to politics. Johnson, sat in the front row of the audience, refused to answer questions about his leadership ambitions. Former Brexit Minister Steve Baker said the question was about the future of the country. Rees-Mogg insisted that Prime Minister Theresa May doesn’t have the votes to get her own Brexit plan through parliament. "I will vote against Chequers," he said. He added that he didn’t believe this would bring down the government.

Rees-Mogg makes case for no deal (12:05 p.m.)

Jacob Rees-Mogg, Boris Johnson and other Brexit-backers set out the case for a no-deal Brexit, which they said would make the U.K. richer. They presented a report from Economists For Free Trade, which argued that the risks had been overstated. Page 14 of the report said that a likely devaluation of the pound would make the U.K. more competitive. Page 16 said the pound might well rise, pushing prices of goods down.

Rees-Mogg leads a group of Conservative lawmakers that are Brexit hardliners in the party. Johnson resigned in July as foreign secretary over his disapproval of the government’s latest Brexit blueprint known as the “Chequers plan.”

Barclays makes Brexit plans (10:52 a.m.)

Barclays Plc, which houses one of the world’s biggest investment banks, will create about 150 “new roles,” as the firm prepares for Britain’s exit from the European Union, a top executive told a panel of U.K. lawmakers.

The new hires in Europe will be in addition to the 150 current U.K.-based positions that will mostly “migrate” to Dublin, Kevin Wall, chief executive officer of Barclays’ Irish unit, told members of the U.K. Treasury Select Committee. The London-based bank has chosen Ireland as its main EU hub after Brexit, Bloomberg reported last year. Read more here.

Previously:

  • Barclays, Citigroup and JPMorgan executives give evidence on Brexit to House of Commons Treasury Committee at 9:15 a.m.
  • Prime Minister Theresa May chairs Cabinet meeting at 9:30 a.m.

Coming up:

  • Conservative MP Jacob Rees-Mogg addresses launch of Economists for Free Trade report on benefits of Brexit at 11 a.m.
  • Hammond takes questions in House of Commons at 11:30 a.m. and then testifies to House of Lords Economic Affairs Committee at 3:30 p.m.
  • Shadow Chancellor John McDonnell addresses TUC Congress in Manchester at 4 p.m.

©2018 Bloomberg L.P.