Brexit Bulletin: Frustration All Round
(Bloomberg) -- Today in Brexit: The U.K.’s exit process remains firmly stuck in the doldrums. That could spell trouble for the economy, and the prime minister.
As another month draws to a close, frustrations over a lack of progress in Brexit are building.
While much of the fire and fury in the debate at the start of April dissipated almost as soon as the U.K. got a deadline extension, it’s left in its stead a sense of growing disquiet. The government is still trying to secure a deal before the European elections, but that aim looks increasingly unlikely as we head into May, with talks between the Tories and opposition Labour dragging on with few signs of an imminent breakthrough.
The stalemate is frustrating the Conservative Party’s grassroots. It emerged last night that Prime Minister Theresa May will face a non-binding but potentially humiliating challenge from Tory activists later this year after enough signed a petition opposing her leadership and Brexit strategy to force an emergency vote on her future. While May wouldn’t be required to quit if she lost such a vote, it would make it harder to meet her pledge to remain as prime minister until Brexit is delivered.
The economy is also paying a price for the delay. Data today revealed that confidence among companies remained subdued this month, and consumers are continuing to put off big purchases. That follows a separate report Monday that showed the uncertainty is hurting U.K. property firms and financial services, with the number of companies classed as being in “critical distress” spiking at the start of the year.
Furthermore, the inaction is likely to infuriate European Union leaders, who urged the U.K. to make good use of its extra time when they agreed to the delay. There are also concerns that if Britain does hold European polls on May 23, then Brexit could be kicked into the long grass over the summer. Efforts to break the deadlock might only be ramped up once the October deadline is far nearer, setting us up for another crisis point.
- The Labour Party’s ruling council will seek to thrash out a Brexit strategy Tuesday as leader Jeremy Corbyn tries to head off a split that threatens to derail his election plans.
- Writing in the Telegraph, former Foreign Secretary William Hague argues that pro-remain parties have already blown the upcoming EU elections, and thus boosted the risk of a no-deal Brexit.
- May is unlikely to oversee another major Queen's speech, and believes the task should be left to her successor, according to the BBC.
Brexit in Brief
Wrong Lessons | The Conservatives are drawing incorrect conclusions from the rise of the Brexit Party, Robert Shrimsley writes in the Financial Times.
Chuka Criticism | Ex-Labour MP Chuka Umunna is continuing to attack his former employer’s stance on Brexit, writing in the Independent that the party will harm businesses if it seeks to facilitate the U.K.’s exit.
No Decision | The government has yet to decide on whether to charge EU students more money to study at English universities after Brexit, according to Education Minister Chris Skidmore.
On the Markets | Traders are ignoring the risk of a hawkish tilt from the Bank of England at a policy meeting this week, JPMorgan says.
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