Latest news with #UKEUrelations
Yahoo
24-05-2025
- Business
- Yahoo
The Weekend: A blow to the US economy takes the shine off a UK-EU trade deal
As the unseasonably warm weather continued, there was a thawing in relations between the UK and its European neighbours after their acrimonious divorce five years ago. News of a wide-ranging post-Brexit deal that cemented ties in defence and trade got the week off to a bright start. This should have lifted the markets, but some gloomy news from the other side of the Atlantic eclipsed any sunshine in the hearts of investors. The US lost its last, highly-prized triple-A credit rating thanks to a Moody's downgrade, snuffing out any hopes of a stock market rally in London and Europe. It wasn't all sun and light for the UK either. On Wednesday, inflation came in well above forecasts because of a surge in household bills and employers' expenses in what was dubbed 'Awful April'. The 3.5% reading, well above target, gives the Bank of England something to think about, and traders scaled back their bets on further rate cuts in 2025. April was equally awful for fiscal data. Government borrowing came in much higher than expected and £1bn higher than the previous month, despite increased receipts from national insurance contributions by employers. Now, you may have noticed, we almost got through a week with no mention of tariffs. Almost. Perhaps inevitably, the week ended with a market shock courtesy of Donald Trump, who threatened the EU with an eye-watering 50% tariff and declared negotiations between his team and the bloc were "going nowhere". At the same time, he said tech behemoth Apple would face a 25% levy on its iPhones unless they are manufactured in the US. Let's take a look at some of the highlights from an eventful few days, before turning our attention to the week ahead. More interest rate cuts in doubt after surprise inflation surge The stronger-than-forecast inflation reading for April, based largely on a surge in utilities bills and travel costs for households, makes it harder for the Bank of England to ease interest rates. This change in dynamic was reflected in a withdrawal by market traders of bets on rate cuts for the year. Markets are now pricing in just one additional quarter-point cut in 2025, reflecting growing concern that the pace of price rises may prove more persistent than previously thought. According to money markets, the probability of a rate reduction in August has slipped to 50%, down from 60% prior to the latest inflation figures. UK government borrowing hits £20.2bn in April Inflation wasn't the only thing exceeding expectations, unfortunately for the government. Chancellor Rachel Reeves' problems worsened when April's data for UK borrowing came in £1bn higher than the previous month and more than £2bn above forecasts. It all adds up to an increased likelihood of tax rises, according to Ruth Gregory of Capital Economics. "April's public finances figures showed that despite the boost from the rise in employers' national insurance contributions, the fiscal year got off to a poor start," she said. "This raises the chances that if the chancellor wishes to stick to her fiscal rules, more tax hikes in the autumn budget will be required." Bitcoin price hits all-time high above $111,000 There was at least some good news for holders of the world's leading cryptocurrency. Bitcoin (BTC-USD) broke its price record as institutional appetite and regulatory support for the digital asset continue to grow. Supply dynamics are also playing a part in the price surge. The amount of bitcoin held on centralised cryptocurrency exchanges has dropped to historic lows, indicating a shift towards self-custody and reducing readily available supply. According to CryptoQuant, exchange reserves are at an all-time low. UK 'bargain' stocks that have outperformed the market long-term Some things seem too good to be true, and we're taught not to trust those things. But a number of FTSE 350 (^FTLC) stocks trading at steep discounts and easily outperforming the market are certainly a tempting prospect for would-be investors. These "hidden gems" range from household names to industrial firms, and are trading at a significantly lower price-to-earnings ratio, compared to their five-year average. 'With such a heavy focus on US tech and the hugely volatile global macro environment, UK investors may have missed some of the quiet compounders closer to home, something recently noted by BlackRock's Larry Fink," said Chris Beauchamp, chief market analyst at IG. You may not be an Elon Musk or a Bill Gates, but have you ever wondered if you actually qualify as being "rich"? Of course it depends on how you look at it, and most would agree there is more to life than money, but columnist and personal finance analyst Sarah Coles gives us some guidance: How to tell if you're rich London, New York, Paris. Perhaps the top three are unsurprising, but there are plenty of intriguing entries in Oxford Economics' global ranking of cities this year, which evaluates the attractiveness of their economies based on a number of factors. Our very own Vicky McKeever brings us more: The world's 10 best cities to live in revealed After a quiet start to the week with markets closed for holidays in the UK and US, developments around US trade relations and economic concerns will continue to occupy investors' attention, and earnings from chipmaking giant Nvidia (NVDA), among others, will also be in the spotlight. Nvidia (NVDA), due to release first quarter earnings on Wednesday, is the last of the Magnificent 7 tech behemoths to report this earnings season. Salesforce (CRM), which provides customer relationship management (CRM) software, is another key tech name reporting on Wednesday. Computer maker Dell (DELL) is then set to report on Thursday, after it unveiled new AI servers powered by Nvidia (NVDA) chips this week. In the retail sector, investors will be looking at wholesale retailer Costco's (COST) latest results, to help gauge US consumer sentiment amid economic uncertainty. Read more: Stocks to watch next week In economic data, the closely-watched US consumer confidence gauge will be in the spotlight on Tuesday as investors look to get an important clue about the state of the world's largest economy. On Wednesday, as well as a slew of key data from France and Germany, the Federal Reserve's rate-setting committee will release the minutes of its last meeting. Thursday is all about the US again, with GDP, corporate profits and jobless claims in the in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Independent
20-05-2025
- Politics
- The Independent
Why the UK-EU youth mobility scheme won't happen any time soon
The language might be dry, but the political shift is significant. Monday's summit between the UK and EU leaders in London resulted in an acknowledgement of the 'mutual interest to deepen our people-to-people ties, particularly for the younger generation'. This announcement is an important step forward in the creation of a youth mobility scheme between the EU and UK, even if it has required a name change to become a 'youth experience scheme'. It is the first time that a British government has formally accepted this as something to negotiate and implement. However, there is scant detail about how it will work in practice and what the inevitable limits will be. While the permitted activities ('work, studies, au-pairing, volunteering, or simply travelling') seem extensive, they are prefaced with the dreaded words 'such as' – which means no one has actually agreed any of it. It was clear over a year ago that the basic models that the two sides have for youth mobility differ. The EU wants lengthy exchange periods and home tuition fees for students; the UK wants shorter stays, caps on numbers and retention of international fees for EU students at UK universities. The achievement of a deal would require at least one of them to move. This week makes this difference now the formal position, rather than showing whether movement is possible. It's possible that discussion of British participation in the Erasmus+ scheme for student mobility might be a partial stopgap, making exchanges within study programmes easier. However, the ambition for creating those deeper people-to-people ties will need more to make it meaningful. As the troubled history of this idea should indicate, there's still a very long way to go before anyone gets to use the scheme in practice. The founding irony of a youth mobility scheme with the EU after Brexit is that it was originally a British idea. It was produced under Rishi Sunak following his conclusion of the Windsor Framework on Northern Ireland, when he was looking for areas to rebuild ties with Europe. In 2023, feelers had been put out to various EU member states about concluding bilateral deals with the UK. While there was some interest, the general feeling was that this was best handled at an EU level, to avoid any cherrypicking of countries by London. In April 2024, the European Commission produced an ambitious proposal for a scheme. It put forward that 18- to 30-year-olds would be able to get a visa for up to four years for any purpose – work, study, travel – without quotas on numbers. Both the Conservative government and the Labour opposition had rejected the proposal out of hand. This was partly out of concerns over the potential impact on immigration figures and on student finances: the commission suggested EU students should be able to pay UK university fees. Mostly, however, it came from a desire not to be seen to make a big agreement with the EU that looked a bit like freedom of movement. To be clear, youth mobility is very much not freedom of movement. The latter implies no limits on entry, length or purpose of stay, as well as access to any kinds of public services as if you were a resident national. The former still means paying for a visa and strict limits on those services. But such legal points remain rather marginal in the British political and media debate. Since last year, there has been some to and fro, but largely behind closed doors and with the incoming Labour government continuing the line that such a scheme wasn't on the cards. While the UK has a number of youth mobility schemes with countries around the world, these are typically limited by quotas and time (normally to two years) and require the person to be working or studying. Moving on? On the British side, Home Office concern about immigration figures is clearly still critical, especially in the context of the recent white paper that aims to cut back migration. Universities too have been vocal about the financial impact of losing tuition fee income from EU students. But on the EU side, the matter is seen very differently. To some extent, the interest is in maintaining the links with the UK, especially for young people that could gain from experiencing more of how their neighbours live. But much more than this is the sense that youth mobility has become something of a test for the British government. Labour's return to office last July marked the unleashing of a significant diplomatic effort to engage with European counterparts and to talk up the value of working together. Youth mobility is a test of that value for some in European capitals, both in terms of being able to negotiate an agreement and of being able to sell it to the British public. The coming weeks and months will therefore be a key period if the reset is to result in more sustainably improved relations. Even if the basic shape of UK-EU relations isn't about to shift, the ability for both sides to be able to talk and act constructively will still matter in delivering from that long list of summit ambitions.
The Independent
20-05-2025
- Business
- The Independent
The hard truth about Starmer's Brexit reset deal
The government's 'Brexit reset' indicates that there are pockets of real competence in Keir Starmer's administration. Its early days were characterised by a string of unforced errors and bad choices. However, after securing a trade deal with India, and an agreement with the US to at least limit the damage of Donald Trump's tariffs, the modest reset in UK-EU relations is perhaps the prime minister's most impressive achievement to date. It is also an example of the government belatedly listening to business and doing the right thing for the economy. Were this with anyone other than Europe, it would be cheered to the rafters. The trouble is, it is with the EU – and because deals invariably mean giving up something that the other side wants in return, the Euro-phobes have pounced. The biggest give in this case is fishing. The EU wanted access to UK waters for its boats, something it already has as part of the Trade and Cooperation Agreement signed by Boris Johnson. This extends that for another 12 years. Cue sound and fury and accusations of 'selling out' Britain's fishermen, even though a substantial chunk of the British fleet is owned by EU-based businesses. It is notable that some of those now screaming 'sellout!' had precious little to say about the impact on UK farmers of the free trade deals with Australia and New Zealand, signed by the previous Conservative government, or even of Labour's pact with Donald Trump. All three of those make things tougher for livestock farmers, who might justifiably ask those portraying themselves as defenders of British fishing why it was OK to throw them over the side of the boat. The National Farmers' Union has also expressed concerns about the bioethanol components of the US deal. But it seems arable farmers similarly lack clout. The fact of the matter is that the concession over fishing – which won't actually change much – is like half a plate full of whitebait when set against the gains in other areas, particularly the reduction of some of the trade barriers that have been crippling the UK's economy and leading to higher prices for consumers. Another concession will see the UK aligning with EU veterinary and food standards – not too much of a give when one considers that the UK already has high standards and that consumers value them, in return for fewer checks at customs. The SPS – sanitary and phytosanitary – deal is a win for all those involved, including farmers and retailers, who have been screaming until they're blue in the face about the difficulties they've been grappling with. Here's the British Retail Consortium: 'The removal of veterinary checks is good news for retailers and consumers alike. It will help keep costs down and create greater security in retail supply chains, ensuring the ongoing availability of key food imports for British shoppers. 'As well as supporting growth for exporters to the UK's biggest export market, retailers operating in the EU will also see a huge reduction in the unnecessary processes, paperwork and administrative burden.' The attempt to portray this as anything other than beneficial is frankly bananas, although I don't think it affects them. Oranges, then? Britain's food and veterinary standards often exceeded EU minimums when it was part of the bloc. So to characterise this as some sort of surrender is utterly ridiculous. Downing Street has claimed it will add £9bn to the UK economy – and while I've no doubt that figure rests on optimistic assumptions, the latter will certainly benefit. Of course it will. The EU is the UK's biggest export market. QED. Further negotiations are promised on a youth mobility scheme, another potential win for both sides, and on defence cooperation, with the UK angling for its sizeable defence industry to be allowed to take part in the continent's re-armament. The two sides linking their carbon markets to avoid taxes on carbon-intensive goods – think steel, or cement, moving each way – is an under-rated plus. But perhaps the most obvious win for ordinary Britons – a canny one from the perspective of improving relations – is that British holidaymakers will be able to use fast e-gates at more European airports. All this merits a much-needed silver star on the government's ugly early report card. The polling clearly shows that the public's eyes don't 'go funny' (Michael Heseltine once suggested that this was a symptom of some of his Brexit-backing colleagues) when it comes to deals with Europe. They'd rather live in a world that works a bit better. The hard truth is that, as welcome as this is, it still isn't as good as what the UK had with EU membership. Nor does it even offer the same benefits as membership of the European single market. It's a baby step in the right direction, but no more than that. In a world plagued by uncertainty, underlining the critical importance of stable supply chains and cooperation with our neighbours, it is still a very welcome development. But a full-throated endorsement should be withheld until Starmer has proved that he can use it as a stepping stone to go further. More is required to help turn around a sickly economy.
Sky News
19-05-2025
- Business
- Sky News
Brexit reset deal: A TBC agreement with a lot still to be worked out with EU
Sir Keir Starmer used the opulent surroundings of London's Lancaster House to declare with certainty that this is a "landmark deal" that will grow the British economy and put money in people's pockets. It is evidence, the prime minister said, of Britain back on the world stage. European Commission president Ursula von der Leyen and European Council president Antonio Costa addressed him as "dear Keir". Times have changed. Symbolically - nearly a decade after Brexit and all the battles and feuds which followed - it is a big moment to see a prime minister warming up relations with the EU. But when you read the nine-page Cooperation Agreement, it is very clear this is just the starter, not the full meal; the opening scene rather than the final curtain. In other words, most of what the government says are negotiated wins are in fact TBC. The deal covers agri-food; fishing, defence, energy and passport checks. The government claims it will add nearly £9bn (around 0.3% of GDP) to the British economy by 2040. A security and defence partnership has been struck; trumpeted as a way UK defence firms can access the EU's £150bn procurement fund. The text only says the UK and EU "should swiftly explore the possibilities", of doing so. Starmer said it would "open the door" for UK firms to benefit, but the UK is not inside the door yet. On trade, the UK government sees the big wins economically - but there are costs and trade-offs. The food deal - or to give it its full name the sanitary and phytosanitary (SPS) agreement - would eliminate some of the barriers to trade erected during Brexit. Paperwork has undoubtedly held up exports, and some products, such as sausages, other cold meats and shellfish, cannot be sold to the EU. The idea is this red tape would be swept away - which has been welcomed by retailers, supermarkets and food processors, who say it will cut prices at the tills. But this comes with conditions - admin costs; and the need to align with EU rules and standards now and into the future. 2:33 Those rules are set by member states, not the UK, and overseen by the European Court of Justice. All of the red lines of the past. Brexiteers are calling it a "betrayal" and the UK going back to being a "rule taker". The specifics would need legislation to go through parliament, so more votes loom. The biggest trade-off is on fishing, a key sticking point in the negotiations from countries such as France. This deal enables EU member states to fish in our water for another 12 years beyond the current deal - until 2038. The government points out that the food deal is indefinite, and the fishing rights have a time limit. But what was agreed was three times longer, it is claimed, than the four years the government had hoped for. Nigel Farage said it would "destroy the fishing industry". All deals involve trade-offs but what has it bought in return? 5:07 The suggestion that holidaymakers could avoid "huge queues" at airports through an agreement for British travellers to use e-Gates at European airports. The agreement states that there will be "no legal barriers to eGate use for British nationals travelling to and from member states" - but nothing firmer. It's up to member states to implement. A youth mobility scheme - which the government has now branded a "youth experience scheme", will happen, despite months of ministers denying one was on the cards. The terms must be mutually agreed, and the final numbers, how the cap will apply and the time limits are yet to be worked out. Starmer is gambling that - based on polling showing most Brexit voters feel the original deal negotiated by Boris Johnson has failed - voters will accept the trade-offs. He said it was time to move away from the "stale" arguments of the past and move on. It's notable that while Conservative leader Kemi Badenoch has slammed Starmer's deal as a "sell out", she concedes it needs to be looked at again. 👉 Listen to Sky News Daily on your podcast app 👈 Given the threat from Reform, the prime minister has been careful to steer very clear of free movement and any concession on student fees. But those questions will come back as the details are hammered out. Whether on food prices or airports, the negotiations could continue for weeks, months or years. There may be many more EU summits for this and subsequent governments. It may not be the end of the Brexit wrangling - as the prime minister hopes - but the start of a new phase in which costs, caps and quotas are discussed regularly, and seized on by his political opponents. The gains are some way off, given that the Office for Budget Responsibility estimated the hit of Brexit to the economy (4%) to be far larger. This is a significant move closer to the EU at a time when the Ukraine war and Donald Trump's diplomacy are shaking up the old order. But for a big concession, whether this can be sold to voters as a good deal is a question for further down the line.
The Independent
19-05-2025
- Business
- The Independent
What does the new EU deal mean for Britain's fishing industry?
Having been a fundamental factor in Britain's negotiations to join the European Union in the 1960s, and in the debates that surrounded the Brexit referendum in 2016, fisheries have once again become central to the UK's relationship with the rest of Europe. The 'Common Understanding' deal that has now been secured by Keir Starmer was held up by a dispute about fishing rights, and few, if any, of the many complex issues in UK-EU relations arouse such strong emotions. Some wonder if this is rational... What's the new deal? That the rules about fishing rights contained in the 2020 EU-UK Trade and Cooperation Agreement (TCA) – Boris Johnson's 'oven ready' Brexit deal – should hold for a further 12 years. The TCA provided for a review in 2026, so Starmer's deal effectively pre-empts that. The 2026 review was planned by Johnson as a compromise on the way, he hoped, to the UK regaining even more of the exclusive territorial fisheries it had previously ceded under EU membership and the old EU Common Fisheries Policy. The provisions in the TCA were for 25 per cent of the overall existing EU quota in UK waters to be transferred to the UK by June 2026. After that point, annual negotiations were supposed to take place over various types of fish and national quotas (with the hope of the UK gaining more of its own waters back). What's wrong with that? Well, it's not 100 per cent British fish for British fisherfolk, and according to critics, British fishing communities have been betrayed once again. In the words of Elspeth Macdonald, chief executive of the Scottish Fishermen's Federation: 'This deal is a horror show for Scottish fishermen, far worse than Boris Johnson's botched Brexit agreement. This highlights the total indifference of the British political establishment to the interests of our fishing sector, with Keir Starmer becoming the third prime minister after Edward Heath and Johnson to betray the industry.' Is it a betrayal? Not really. For reasons of culture and taste, the British couldn't consume all of the abundant fish in the seas around these isles, because they tend not to be of the species they like the most. Thus, farmed salmon isn't even part of the fisheries debate, while cod, our second favourite, tends to come from more northerly waters, outside those belonging to the UK and the EU – off Norway and towards Svalbard. On the other hand, Europeans like the herring and mackerel and other types that the British have lots of but tend not to favour, and there's no real market in Britain for the 'native' sand eels and blue whiting – low value, low-margin species. But even if British boats caught all of the plentiful fish liked by Europeans and landed them in British ports, they'd still need to transport and sell their catches to the EU – something that's been made much harder by Brexit. Now, salmon and shellfish, as well as other raw and processed fish, can be more easily sent to European markets. A gigantic captive national fishery is of no use if the British won't eat its produce and the EU won't buy it. Hence the need for a deal. But why can't we go back to the old days? It's true that, for example, Grimsby, at its peak in the 1950s, was the biggest fishing port in the world. The heyday of Lowestoft, to take another example, came in 1955 when the Birdseye company perfected the fish finger. But since then the extension of territorial waters by the likes of Greenland, Iceland, Norway, and the EU, increased international competition – especially from Russia and Spain – plus periods of persistent overfishing have transformed the situation. Why don't the British eat more fish? Some put it down to the Reformation and the association of 'fish on Friday' with Catholicism. But it's a bit of a mystery, given the superb range and quality available and the status of the national dish of fish and chips (a cheap and filling dish that became popular in the hungry 1930s). Japan, for example, another maritime power, plotted a very different course in its cuisine. Why is it so emotive? Because no one wants to see proud coastal communities with brave fishermen and women suffer, and be regarded so contemptuously as disposable. Nonetheless, the hard fact is that fisheries account for only about half a billion pounds a year, as opposed to the 'winners' in Starmer's latest deal – the defence and food-processing sectors, which generate hundreds of billions of pounds in annual output. Every trade deal has winners and losers, as does trade more generally, and no economy can resist change for ever.
