Brexit: The number of employees is falling more than it has been in two years – and Theresa May in a bind

The negotiations between the UK and the EU are now in a very hot phase! Tomorrow and Friday, the EU will have to decide what to do next – they will discuss and evaluate the latest developments in Brussels. Theresa May will not attend this EU meeting, but she will be flying to Brussels tomorrow, hoping to get the green light to start negotiations on the future trade agreement.

May is in a dilemma: British parliamentarians are demanding ultimate veto rights for the Brexit negotiations with the EU. If this will be the case, it would be a further weakening of Mays’ position, which would then only be able to provide her EU negotiating partners with reservations – not exactly a position of strength!

Theresa May. Photo: Foreign and Commonwealth Office/Wikipedia (CC BY 2.0)

Three key questions remain unresolved:

1. The rights of British citizens in the EU and EU citizens in the UK.

2. The design of the border between Ireland and Northern Ireland – so far there is only lip service that one wants a “soft border”, without saying how that could look exactly.

3. The british payments to the EU for common obligations entered into in the past, such as pension entitlements of civil servants, etc. In the event of no trade agreement, says May, one would pay nothing.

Now the wires are drifting – and actual news about the UK economy are not so good. First, there is the fact that between August and October, the number of people employed in the UK fell more sharply (-56,000) than it had in two years – the second consecutive decline.

Although the unemployment rate at 4.3% remained at its lowest level since 1975, it was above the forecast of 4.2%. After all, the average income in October compared to the same month last year at + 2.3% rose slightly more than expected (forecast was + 2.2%) – but this is too little in the face of official inflation of 3.1%, the Brits are actually losing purchasing power massively!

At its last meeting, the Bank of England (BoE) has tried to stem the inflation caused by the weak British pound with a rate hike – the BoE is meeting again tomorrow, but is expected to wait with further interest rate hikes so as not to overburden the UK economy.

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