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Brexit Bulletin: First Rejection

Brexit Bulletin: First Rejection

(Bloomberg) -- Today in Brexit: European Union officials reject Boris Johnson’s early Brexit proposals, upping the chances of a no-deal divorce.

What’s Happening?

Prime Minister Boris Johnson’s early Brexit negotiations took a hard line, and EU officials weren’t having it.

The EU rejected Johnson’s demand to renegotiate the Brexit withdrawal deal struck by his predecessor Theresa May, including the so-called Irish border backstop. EU Commission President Jean-Claude Juncker told Johnson that the Withdrawal Agreement —which Parliament has rejected three times — was the “best and only agreement possible.”

Johnson said the EU would have to “rethink their current refusal” to reopen talks on the agreement May reached, and that Parliament has rejected three times.

It all goes to show that Johnson will encounter the exact same difficulties as May did in trying to get the U.K. out of the EU. If neither side backs down, Britain will be on course to fall out of the bloc with no agreement on Oct. 31.

We’re also starting to get an idea of Johnson's next steps, Bloomberg’s Rob Hutton writes. The premier’s statement to Parliament on Thursday indicated that he’ll probably prepare Britain for a no-deal departure in an attempt to secure concessions from the EU. Michael Gove, who now runs the machinery of government, will make preparedness for a no-deal divorce his “top priority,” Johnson said on Wednesday. 

And the prime minister could call an election in an attempt to gain a majority. That’s a view echoed by ITV’s Robert Peston, who says EU officials won’t be persuaded to rip up the withdrawal agreement. “We are heading for an autumn general election, since parliament can and will frustrate a no-deal Brexit unless there is a popular mandate for it,” he says.

Today’s Must-Reads

  • Ireland  won’t buckle in the face of Brexit, Bloomberg’s Dara Doyle reports, with Prime Minister Leo Varadkar sounding unruffled. “Confidence and enthusiasm is not a substitute for a European policy,” he said on Wednesday.
  • Bookmakers say Johnson’s former economic adviser, Gerard Lyons, is now one of the front-runners to replace Mark Carney as governor of the Bank of England. With an upbeat view on Brexit, he would bring a very different way of thinking to the centuries-old institution. 
  • Johnson gutted May’s Cabinet, assembling a government of like-minded Brexit hardliners. Here’s your guide to who’s gone, who’s stayed and who’s been moved.
Brexit Bulletin: First Rejection

Brexit in Brief

Reshuffle Trouble | High-profile Brexiter Steve Baker turned down a ministerial job, he tweeted on Thursday evening. Baker hoped to have a role in shaping Brexit, The Times reported, but the position he was offered in the Brexit department no longer has a say over preparations for  a no-deal departure. Johnson has instead given the task to Michael Gove in the Cabinet Office. Baker said he couldn’t repeat his previous experience of “powerlessness” as a junior minister under Theresa May.

Immigration | Johnson looks set to move away from May’s pledge to slash annual immigration numbers to “tens of thousands.” Speaking in the House of Commons, Johnson said he’s considering an Australian-style, points-based system, and wouldn’t set a limit on the number of migrants coming into the U.K.

Mogg on the Move | Hardline Brexiter Jacob Rees-Mogg left the investment firm he co-founded in 2007 to assume a role in the cabinet. He stepped down from Somerset Capital Management in accordance with the rules for cabinet ministers, according to a statement on Thursday. Mogg was appointed leader of the House of Commons, moving from the back benches to a more senior role for the first time.

Retail Gloom | Almost 50% of retailers complained about poor sales in the three months through July, according to the Confederation of British Industry. The figures published Thursday add to signs that consumers, whose spending has driven the economy during the Brexit crisis, are turning more cautious.

Global Brexit | Nigel Farage and backers of U.S. President Donald Trump have formed a new lobbying body to promote the benefits of Brexit abroad, the Financial Times reports. The group, World4Brexit, says it was founded by “friends of the U.K.”

Millennial Wildcard | Boris Johnson has seen off one female party leader, but the Liberal Democrats’ newly elected Jo Swinson may pose different problems, Therese Raphael writes for Bloomberg Opinion.

And Finally | On her first day out of office, cricket fan Theresa May and some of her ousted allies were spotted at Lord’s on Thursday. The match? England vs Ireland.

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Adam Blenford

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