Brexit

The European Union faces a 20-billion-euro hole in its annual budget due to Britain’s withdrawal and rising costs in issues such as defense, EU Budget Commissioner Guenther Oettinger said Wednesday.

Oettinger warned that the U.K.’s departure, expected in 2019, will blow a hole of €9 billion to €12 billion in the EU’s roughly €150 billion annual budget.

“We won’t have the UK with us any more, but they were net payers despite the Thatcher rebate, so we will have a gap of 10 to 11 billion euros a year,” Oettinger told a press conference as he unveiled the commission’s proposals for the budget.

UK Prime Minister Theresa May promised EU citizens now living in Britain they could stay after Brexit but started a dispute with Brussels over the role of Europe’s top court.

At a summit in Brussels on Thursday, May gave "a clear commitment that no EU citizen currently in the UK lawfully will be asked to leave the country at the point that the UK leaves the EU", a British government source said.

Nomura picked Frankfurt as the headquarters for its European Union operations after the UK leaves the bloc, Bloomberg reported.

Japan’s biggest brokerage will start preparations this month to form a base in the German financial centre, one of the people said, asking not to be identified as the matter is confidential. The decision will necessitate regulatory approval along with securing the requisite office space before transferring fewer than 100 employees from London to the city, according to the person.

Mrs May will head to Brussels for her first European summit since losing her Commons majority in the general election.
It comes the day after measures to enable Brexit dominated the Queen’s Speech and with the Conservatives still trying to secure the Commons support needed to pass their programme.

From the growth point of view, Brexit can affect the economy in two ways. In the near term, uncertainty from Brexit and rising inflation from the reduction in Sterling trade since the vote could cause a modest demand-side shock. But that effect has been much smaller than expected. In fact, the economy has outperformed the non-Brexit scenarios. Of course, we do not know how the economy would have performed had the UK not voted to leave. That seems to be an absence of the short-term demand-side shock. I am confident that the UK can continue to enjoy a broad-base expansion over the next couple of years. I see probably 2% real GDP growth this year followed by 1.7% next year.

Now is not the time to raise interest rates, Bank of England Governor Mark Carney said on Tuesday, warning that already weak wage growth risked a further loss of momentum as Britain prepares to leave the European Union.

In a speech to London’s banking community a day after Brexit talks started, Carney dashed any prospect that he might be close to joining the three BoE policymakers who last week unexpectedly voted to raise rates from their record low of 0.25 per cent.

Supporters of "hard" and "soft" Brexit tried to take advantage of the political chaos in Britain on Monday to promote their visions amid fears that their rivalry could revive old divisions in the Conservative Party.

Prime Minister Theresa May is in a weakened position after losing her parliamentary majority in last week’s snap election, leaving her vulnerable to both hardliners and moderates in her party.

UK Prime Minister Theresa May had called Thursday’s snap elections to strengthen her hand in Brussels, but the loss of her Conservative majority has plunged the Brexit process into disarray just over a week before talks are scheduled to begin.

The Tories won fewer than 320 seats, short of the 326 needed for a majority in Britain’s 650-member House of Commons. Labour, the main opposition party, gained more than 30 seats to top 260.