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No Turning Back From Brexit For Britain

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LONDON: There’s no turning back from Brexit. That’s the message U.K. Prime Minister Theresa May will deliver on Thursday as she attends her first summit of European Union leaders in Brussels.

Her underscoring of “Brexit means Brexit” will dash any lingering hope of a reversal, and fan speculation she’s looking for a clean break from the region’s single market and customs union. The full story from Bloomberg’s Tim Ross and Ian Wishart is here.

Britain’s counterparts are also set to take a hard line. German Chancellor Angela Merkel is refusing to engage in informal talks about a possible deal before May officially triggers Britain’s withdrawal in early 2017.

Finnish Prime Minister Juha Sipila helped set the tone by saying in an interview that the EU is united in resisting Britain’s efforts to find loopholes in the bloc’s sacred “four freedoms.”

At home, May also faces criticism today, with members of the House of Lords urging her to keep lawmakers abreast of her negotiations or risk striking a deal that’s not supported by either Parliament or the public.

Take a Number, Mrs. May

May will have to wait in line in Brussels before making her case.

For the other 27 leaders, Britain’s withdrawal is just one of several existential threats they must deal with, Ian Wishart reports. From Russian intimidation of eastern Europe to a migration crisis that’s fraying Europe’s social unity, leaders are keen to get on with finding solutions. They will do so as populist forces rising in their own nations pose more problems next year while Germany, France and the Netherlands hold elections.

“We shouldn’t be blocked by the British debate,” Manfred Weber, leader of Merkel’s Christian Democrats in the European Parliament, said in an interview. “The next 12 months will be really crucial for the European Union.”

To show where their focus lies and perhaps hint at the EU’s irritation with the U.K., May will probably be given only about 10-15 minutes over dinner on Thursday evening to talk Brexit.

Banks Bash Tax

With almost a month to go before Chancellor of the Exchequer sets out his fiscal plans, banks will today lobby him to lower their taxes to protect the finance industry against Brexit.

The U.K. should phase out its corporation tax surcharge on bank profits “as soon as possible,” the British Bankers’ Association will argue today at its annual meeting in London. Doing so would help support jobs and keep London as an attractive location for banks, its chief executive officer, Anthony Browne, will say.

“Banks are firmly committed to paying our fair share, but we are now at a tipping point that threatens U.K. jobs and growth,” said Browne in the prepared text of his speech. “It is essential that the U.K. remains a competitive place to do business for international banks.”

Hammond yesterday tried to reassure the financial sector that the government would make safeguarding it a “very high priority” in Brexit talks and noted the government is “acutely aware” of the industry’s importance to the economy. Others in the government have expressed less enthusiasm in private.

Banks fleeing London would also create trouble for the companies that rate their debt, Bloomberg’s John Glover reports today. The largest credit-raters — Moody’s, S&P Global Ratings and Fitch — base their main European operations in the U.K., but they’re supervised by the European Securities and Markets Authority in Paris. The agency faces losing jurisdiction over London-based companies, whose ratings would then not be accepted for regulatory purposes in the bloc.

For more on the complex topic of “passporting,” read Gavin Finch’s QuickTake.

Hammond Hits Back

Hammond also used his testimony before lawmakers to hit back at accusations in newspapers that he’s sabotaging the government’s efforts to reach a deal, saying that it’s his detractors seeking a “hard Brexit” who are deliberately undermining the negotiations.

“The best way to support this Brexit process and to get the right Brexit for Britain is to give the prime minister the maximum space for negotiation,” Hammond said. “Those that are undermining the effort are those seeking to undermine this negotiating space, who are seeking to arrive at a hard decision.”

The chancellor also defended the Bank of England’s independence and said there would be no fiscal “splurge” next month. He promised high-skilled foreign workers would still be welcome in Britain and backed off a pre-referendum report by the Treasury on the costs of Brexit. The pound rallied, though it didn’t last.

“Although Hammond is not giving anything away at this stage of his testimony, it gives the markets a glimmer of hope that the UK may not target a â€hard’ Brexit,” said Kathleen Brooks of City Index.

Brexit Bullets

Barclays CEO Staley says there will be changes because of BrexitCameron’s old seat is up for grabs in a potentially close by-electionScotland lays the groundwork for a new independence vote in bid to beat BrexitBrexit volatility may pay off for private equity firms, BCG SaysBritons’ economic pessimism deepens as the pound takes Brexit tumbleHilary Benn to head U.K. Parliament committee studying BrexitFSNForum launches to give lawmakers input on financial marketsFoxtons’ Brexit get-out clause: Bloomberg Gadfly

On the Markets

A fluctuating pound shows just how desperate investors are for direction on the U.K. currency after it shifted up and down on Wednesday on the news from Merkel, Hammond and the economy. Sterling has still tumbled 18 percent since the June referendum.

Dara Doyle and Peter Flanagan report how the cheaper pound is causing changes along the Irish border.

And Finally…

There’s yet a new term to describe where people’s views sit on the Brexit spectrum. Joining “Remoaners” and “Brexiteers” in the dictionary is “Sado-Brexitists.” That was coined by Royal Bank of Scotland Chairman Howard Davies to describe those who are “really enthusiastic about hard Brexit.”

“I made that one up, but I quite like it,” Davies said during a London speech yesterday. – Bloomberg

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