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Vince Cable announces he is running for Liberal Democrat leadership - Politics live Vince Cable announces he is running for Liberal Democrat leadership - Politics live
(35 minutes later)
1.02pm BST
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The Times’ Sam Coates has written an interesting take (paywall) on Philip Hammond’s speech. Here’s an extract.
Although technically the chancellor did not breach any collective government positions on Brexit or the economy, it is inconceivable that [Hammond] could have delivered such a speech before the botched general election a fortnight ago.
Mr Hammond took aim at a series of Mrs May’s core beliefs: the need to bear down heavily on migration, the damage caused by globalisation, the ease with which the public spending taps can be turned on, and the need for a full “transition” deal rather than Mrs May’s “implementation” phase.
Before the election he would have been blocked from giving such an address and it had been expected that he would be removed from his post. Mrs May’s fall from grace, which has not yet halted, has given him new power and he is determined to use it to try and stop Britain making, in his view, catastrophic mistakes on Brexit.
12.44pm BST
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The Institute of Directors has welcomed Philip Hammond’s Mansion House speech. Allie Renison, its head of EU and trade policy, said:
Business leaders will welcome the pragmatic approach taken when talking about Brexit in his Mansion House speech. There were no big surprises, but the focus on jobs and the economy is a step towards shoring up shaky business confidence. The chancellor reiterated the government’s intention to leave the EU customs union, which always seemed likely in the long-term, but crucially showed some flexibility on pushing for an orderly process to do so. The emphasis on the need for an early agreement on transitional provisions – as opposed to sorting this out toward the end of the negotiations – is positive. Firms will need to know, at the latest by next summer, whether there will be substantive changes to trade and migration arrangements in order to have time to activate any contingency plans.
12.28pm BST12.28pm BST
12:2812:28
Number 10 has sent out a (characteristically dull) read-out from this morning’s cabinet meeting. Here it is. It’s from a spokesman.Number 10 has sent out a (characteristically dull) read-out from this morning’s cabinet meeting. Here it is. It’s from a spokesman.
In this morning’s cabinet meeting, ministers discussed upcoming parliamentary business, including tomorrow’s Queen’s Speech which heralds an historically important two-year session to help deliver the legislation for a successful Brexit.In this morning’s cabinet meeting, ministers discussed upcoming parliamentary business, including tomorrow’s Queen’s Speech which heralds an historically important two-year session to help deliver the legislation for a successful Brexit.
Ministers also discussed the awful events of the past week. The prime minister expressed her appreciation of the police and emergency services for their bravery and professionalism.Ministers also discussed the awful events of the past week. The prime minister expressed her appreciation of the police and emergency services for their bravery and professionalism.
On Grenfell Tower, the secretary of state for communities and local government updated cabinet on the efforts to ensure everything is being done to help victims’ families and other survivors, as well as looking ahead to the longer-term recovery effort. On the tragic incident at Finsbury Park, the prime minster and home secretary discussed the importance of ongoing government work in reviewing its counter terrorism strategy and ensuring that police and security services have the powers they need.On Grenfell Tower, the secretary of state for communities and local government updated cabinet on the efforts to ensure everything is being done to help victims’ families and other survivors, as well as looking ahead to the longer-term recovery effort. On the tragic incident at Finsbury Park, the prime minster and home secretary discussed the importance of ongoing government work in reviewing its counter terrorism strategy and ensuring that police and security services have the powers they need.
The chancellor of the exchequer provided cabinet with an update on the economy and public finances, emphasising the underlying strengths of the UK economy and setting out the importance of making the case for a market economy, sound money and growth as well as prioritising rising productivity.The chancellor of the exchequer provided cabinet with an update on the economy and public finances, emphasising the underlying strengths of the UK economy and setting out the importance of making the case for a market economy, sound money and growth as well as prioritising rising productivity.
The secretary of state for Northern Ireland also provided an update to progress on talks to restore power-sharing institutions.The secretary of state for Northern Ireland also provided an update to progress on talks to restore power-sharing institutions.
12.00pm BST12.00pm BST
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Henry McDonaldHenry McDonald
It is day 2 of the talks in Belfast aimed at restoring the power sharing devolved government in Northern Ireland. Day 1 has been described as “reasonably constructive” by one senior Irish official.It is day 2 of the talks in Belfast aimed at restoring the power sharing devolved government in Northern Ireland. Day 1 has been described as “reasonably constructive” by one senior Irish official.
Both the Irish foreign minister, Simon Coveney, and the Northern Ireland secretary, James Brokenshire, are not at Stormont for the all-party discussions today. Coveney is holding Brexit talks at the EU in Brussels while Brokenshire has commitments in London. However, the parties, most notably Sinn Fein and the Democratic Unionists, will continue talking today.Both the Irish foreign minister, Simon Coveney, and the Northern Ireland secretary, James Brokenshire, are not at Stormont for the all-party discussions today. Coveney is holding Brexit talks at the EU in Brussels while Brokenshire has commitments in London. However, the parties, most notably Sinn Fein and the Democratic Unionists, will continue talking today.
One of the substantive issues on the table is Sinn Fein’s demand for an Irish Language Act that would put the gaelic language on a par with English, which would be a similar outcome to the situation already pertaining in Wales, where the Welsh language has parity to English. Sources at the talks say this morning that aspects of Ulster Protestant culture rooted in terms of “respect” for things like Ulster Scots might also be built into the legislation to make the language act more acceptable to unionists.One of the substantive issues on the table is Sinn Fein’s demand for an Irish Language Act that would put the gaelic language on a par with English, which would be a similar outcome to the situation already pertaining in Wales, where the Welsh language has parity to English. Sources at the talks say this morning that aspects of Ulster Protestant culture rooted in terms of “respect” for things like Ulster Scots might also be built into the legislation to make the language act more acceptable to unionists.
The other major area of contention is legacy or how to deal with the past crimes and atrocities of the Troubles. It appears that, while draft legislation may be possible, the ideas formulated at the talks will be put out to public consultation across Northern Ireland and in particular to a whole range of victims groups. By doing this, it is believed the ‘sting’ will be taken out of the legacy issue and it won’t become a deal breaker at Stormont.The other major area of contention is legacy or how to deal with the past crimes and atrocities of the Troubles. It appears that, while draft legislation may be possible, the ideas formulated at the talks will be put out to public consultation across Northern Ireland and in particular to a whole range of victims groups. By doing this, it is believed the ‘sting’ will be taken out of the legacy issue and it won’t become a deal breaker at Stormont.
Meanwhile those other talks - the ones between the DUP and the Tories - aimed at creating a minority Conservative government go on in London today. They also cast a shadow over the Belfast negotiations with Sinn Fein and others keeping one eye on what the outcome of the DUP/Tory discussions may bring forward.Meanwhile those other talks - the ones between the DUP and the Tories - aimed at creating a minority Conservative government go on in London today. They also cast a shadow over the Belfast negotiations with Sinn Fein and others keeping one eye on what the outcome of the DUP/Tory discussions may bring forward.
In terms of the Belfast talks though the clock is ticking, with the 29 June deadline fopr the restoration of power sharing looming ever closer.In terms of the Belfast talks though the clock is ticking, with the 29 June deadline fopr the restoration of power sharing looming ever closer.
11.51am BST11.51am BST
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Sir Vince Cable is leaving open the option of only serving as a caretaker leader, the BBC’s Norman Smith reports.Sir Vince Cable is leaving open the option of only serving as a caretaker leader, the BBC’s Norman Smith reports.
Vince Cable leaves open option of serving as two year caretaker leader of @LibDemsVince Cable leaves open option of serving as two year caretaker leader of @LibDems
Cable is 74. If the next election is in 2022, he will be just days away from his 79th birthday when it takes place. Jo Swinson, who is 37 and who has ruled out running for the leadership this time, is running for the deputy leadership and hinted in her statement on Sunday that she would go for the top job in due course. Cable could end up running on the understanding that before 2022 he would step aside for her.Cable is 74. If the next election is in 2022, he will be just days away from his 79th birthday when it takes place. Jo Swinson, who is 37 and who has ruled out running for the leadership this time, is running for the deputy leadership and hinted in her statement on Sunday that she would go for the top job in due course. Cable could end up running on the understanding that before 2022 he would step aside for her.
11.42am BST11.42am BST
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According to the BBC’s Chris Mason, Sir Ed Davey, the Lib Dem former energy secretary, will announce later this week if he is standing for the party leadership.According to the BBC’s Chris Mason, Sir Ed Davey, the Lib Dem former energy secretary, will announce later this week if he is standing for the party leadership.
Asked if he will also be running for the leadership of the Liberal Democrats, the former Energy Secretary Sir Ed Davey has just told me...Asked if he will also be running for the leadership of the Liberal Democrats, the former Energy Secretary Sir Ed Davey has just told me...
... "I'll be letting you know later in the week."... "I'll be letting you know later in the week."
11.13am BST11.13am BST
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Vince Cable announces he is running for Lib Dem leadershipVince Cable announces he is running for Lib Dem leadership
Sir Vince Cable, the Lib Dem business secretary in the coalition who has just been re-elected to parliament after losing his seat in 2015, has announced in a blog for Lib Dem Voice that he is running for the party leadership.Sir Vince Cable, the Lib Dem business secretary in the coalition who has just been re-elected to parliament after losing his seat in 2015, has announced in a blog for Lib Dem Voice that he is running for the party leadership.
Here is an extract.Here is an extract.
There are big opportunities ahead. The Conservatives are in disarray and in retreat. The Labour Party outperformed expectations but complacently believes that ‘one more heave’ will see it into office. But an economic policy based on offering lots of free things lacks economic credibility and will be found out. Investing in infrastructure, rather than borrowing for everyday running costs is credible. There is a big space in British politics which I am determined that we should occupy.There are big opportunities ahead. The Conservatives are in disarray and in retreat. The Labour Party outperformed expectations but complacently believes that ‘one more heave’ will see it into office. But an economic policy based on offering lots of free things lacks economic credibility and will be found out. Investing in infrastructure, rather than borrowing for everyday running costs is credible. There is a big space in British politics which I am determined that we should occupy.
The contest will take place with the largest membership electorate in our party’s history. We should be ambitious about increasing our number still further and in particular attracting young people to our cause. I welcome the more diverse party and parliamentary party we now have and will give priority to promoting diversity, an issue I championed as a minister and with some success in business leadership.The contest will take place with the largest membership electorate in our party’s history. We should be ambitious about increasing our number still further and in particular attracting young people to our cause. I welcome the more diverse party and parliamentary party we now have and will give priority to promoting diversity, an issue I championed as a minister and with some success in business leadership.
The party has survived five difficult years of Coalition government and the disadvantage of the current unreformed voting system. We are now growing again and the political winds are moving in our favour. I believe I can, as leader, offer the energy, dedication and drive, as well as experience, to help – with you – to make our party a credible contender for power.The party has survived five difficult years of Coalition government and the disadvantage of the current unreformed voting system. We are now growing again and the political winds are moving in our favour. I believe I can, as leader, offer the energy, dedication and drive, as well as experience, to help – with you – to make our party a credible contender for power.
With Jo Swinson having announced on Sunday that she is not standing, the bookmakers now have Cable and Norman Lamb (who has not yet said whether he will stand or not) as the favourites.With Jo Swinson having announced on Sunday that she is not standing, the bookmakers now have Cable and Norman Lamb (who has not yet said whether he will stand or not) as the favourites.
10.56am BST10.56am BST
10:5610:56
McDonnell says Hammond's speech shows austerity will continueMcDonnell says Hammond's speech shows austerity will continue
John McDonnell, the shadow chancellor, has put out a statement about Philip Hammond’s speech, saying Hammond effectively admitted austerity would continue. McDonnell said:John McDonnell, the shadow chancellor, has put out a statement about Philip Hammond’s speech, saying Hammond effectively admitted austerity would continue. McDonnell said:
The chancellor has made clear this morning that the message remains the same - austerity will continue. The Tories have learnt nothing from the general election, and the last seven wasted years of economic failure. The Conservatives have no understanding of the depth of suffering, stress and insecurity their long austerity regime has caused.The chancellor has made clear this morning that the message remains the same - austerity will continue. The Tories have learnt nothing from the general election, and the last seven wasted years of economic failure. The Conservatives have no understanding of the depth of suffering, stress and insecurity their long austerity regime has caused.
McDonnell also claimed that Philip Hammond’s comments on Brexit showed the government was split on the issue.McDonnell also claimed that Philip Hammond’s comments on Brexit showed the government was split on the issue.
And we have seen the chancellor again trying to distance himself from the position of his prime minister on Brexit. It just shows further disarray at the top of government. The fact that there is clearly such a serious split between Number 10 and 11 is very worrying and only helps to undermine our country ahead of the Brexit negotiations.And we have seen the chancellor again trying to distance himself from the position of his prime minister on Brexit. It just shows further disarray at the top of government. The fact that there is clearly such a serious split between Number 10 and 11 is very worrying and only helps to undermine our country ahead of the Brexit negotiations.
It further shows just how weak a position Theresa May is in. And raises the serious question of: how can she negotiate Brexit when her own chancellor is so publicly disputing her position on Brexit and briefing against his own cabinet colleagues?It further shows just how weak a position Theresa May is in. And raises the serious question of: how can she negotiate Brexit when her own chancellor is so publicly disputing her position on Brexit and briefing against his own cabinet colleagues?
10.40am BST10.40am BST
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Carney mocks Boris Johnson and suggests Brexit is a threat to the economyCarney mocks Boris Johnson and suggests Brexit is a threat to the economy
Mark Carney’s speech (pdf) was a fairly classy production, involving footnotes, graphs and sarcasm. Here are the key points.Mark Carney’s speech (pdf) was a fairly classy production, involving footnotes, graphs and sarcasm. Here are the key points.
Carney, the governor of the Bank of England, suggested that Brexit was a threat to the economy. In his speech he said Brexit had already led to the markets downgrading the UK’s economic prospects. He said:Carney, the governor of the Bank of England, suggested that Brexit was a threat to the economy. In his speech he said Brexit had already led to the markets downgrading the UK’s economic prospects. He said:
Since the prospect of Brexit emerged, financial markets, notably sterling, have marked down the UK’s economic prospects.Since the prospect of Brexit emerged, financial markets, notably sterling, have marked down the UK’s economic prospects.
In a footnote to the speech, he elaborated on this point.In a footnote to the speech, he elaborated on this point.
The sterling ERI has fallen close to 20% from its November 2015 peak. Since then, UK-focused equity prices have fallen by over 2%. In contrast, broader equity price indices such as the FTSE 100 and S&P 500, which more heavily reflect global economic considerations, are almost 20% and 40% higher respectively (in sterling terms). UK 10-year real government bond yields have fallen 115 basis points; by contrast 10-year real government bond yields in the US are down by around 25 basis points only.The sterling ERI has fallen close to 20% from its November 2015 peak. Since then, UK-focused equity prices have fallen by over 2%. In contrast, broader equity price indices such as the FTSE 100 and S&P 500, which more heavily reflect global economic considerations, are almost 20% and 40% higher respectively (in sterling terms). UK 10-year real government bond yields have fallen 115 basis points; by contrast 10-year real government bond yields in the US are down by around 25 basis points only.
Carney also went on to suggest that Brexit could have a negative impact on wages, jobs and prices.Carney also went on to suggest that Brexit could have a negative impact on wages, jobs and prices.
Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change.Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change.
He mocked Boris Johnson’s claim that Britain would be able to “have its cake and eat it” after Brexit. He did not mention Johnson, the foreign secretary, directly, but it was clear who he meant when he said, with mild sarcasm.He mocked Boris Johnson’s claim that Britain would be able to “have its cake and eat it” after Brexit. He did not mention Johnson, the foreign secretary, directly, but it was clear who he meant when he said, with mild sarcasm.
Markets have already anticipated some of the adjustment. Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans. Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.Markets have already anticipated some of the adjustment. Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans. Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.
Carney said that he personally thought that now was not the time for interest rate rises, and he said that all members of the monetary policy committee (MPC) were agreed that, when rates did rise, they would rise gradually.Carney said that he personally thought that now was not the time for interest rate rises, and he said that all members of the monetary policy committee (MPC) were agreed that, when rates did rise, they would rise gradually.
As spare capacity erodes, the trade-off that the MPC must balance lessens, and all else equal, its tolerance for above-target inflation falls. Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.As spare capacity erodes, the trade-off that the MPC must balance lessens, and all else equal, its tolerance for above-target inflation falls. Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.
From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.
He suggested that he did not think the trade deficit was sustainable.He suggested that he did not think the trade deficit was sustainable.
In this environment, the UK is running a historically large current account deficit. On the positive side, the deficit is funded in domestic currency and financial reforms have increased the resilience of the UK system, thereby making larger imbalances more sustainable. But the UK’s deficit has also been associated with markedly weak investment and latterly with rapid consumer credit growth. This is not an imbalance that is, as yet, funding its eventual resolution.In this environment, the UK is running a historically large current account deficit. On the positive side, the deficit is funded in domestic currency and financial reforms have increased the resilience of the UK system, thereby making larger imbalances more sustainable. But the UK’s deficit has also been associated with markedly weak investment and latterly with rapid consumer credit growth. This is not an imbalance that is, as yet, funding its eventual resolution.
Moreover, despite the large depreciation around the referendum, the extent to which the UK’s deficit has moved closer to sustainability remains an open question, one whose answer depends crucially on the outcome of the Brexit negotiations.Moreover, despite the large depreciation around the referendum, the extent to which the UK’s deficit has moved closer to sustainability remains an open question, one whose answer depends crucially on the outcome of the Brexit negotiations.
He said he was opposed to fragmentation of financial services after Brexit. Philip Hammond made a similar point in his speech, but Carney spoke about this specifically in the context of central counterparty (CCP) clearing houses, such as those in the City involved in the euro clearing business. He said:He said he was opposed to fragmentation of financial services after Brexit. Philip Hammond made a similar point in his speech, but Carney spoke about this specifically in the context of central counterparty (CCP) clearing houses, such as those in the City involved in the euro clearing business. He said:
Fragmenting liquidity would drive up costs somewhat in the remaining market as well. On current volumes, almost 90% of swaps are traded by non-EU firms and could remain in the main UK-based liquidity pool. Given the size of this market, the impacts could be expected to be much smaller, although not insignificant.Fragmenting liquidity would drive up costs somewhat in the remaining market as well. On current volumes, almost 90% of swaps are traded by non-EU firms and could remain in the main UK-based liquidity pool. Given the size of this market, the impacts could be expected to be much smaller, although not insignificant.
Fragmentation is in no one’s economic interest. Nor is it necessary for financial stability. Indeed it can damage it. Fragmenting clearing would lead to smaller liquidity pools in CCPs, reducing the ability to diversify risks and diminishing resilience. And higher costs would reduce the incentives to hedge risks, increasing the amount of risk that the real economy would have to bear.Fragmentation is in no one’s economic interest. Nor is it necessary for financial stability. Indeed it can damage it. Fragmenting clearing would lead to smaller liquidity pools in CCPs, reducing the ability to diversify risks and diminishing resilience. And higher costs would reduce the incentives to hedge risks, increasing the amount of risk that the real economy would have to bear.
UPDATE: I’ve corrected one of the posts above. Carney was talking about the trade deficit, not the budget deficit.UPDATE: I’ve corrected one of the posts above. Carney was talking about the trade deficit, not the budget deficit.
UpdatedUpdated
at 11.24am BSTat 11.24am BST
9.59am BST9.59am BST
09:5909:59
Here is some more Twitter reaction to Philip Hammond’s speech.Here is some more Twitter reaction to Philip Hammond’s speech.
From Paul Mason, the Guardian columnistFrom Paul Mason, the Guardian columnist
Hammond signalled no further loosening of fiscal policy this morning - here's what that will mean https://t.co/xLMrvrIu88Hammond signalled no further loosening of fiscal policy this morning - here's what that will mean https://t.co/xLMrvrIu88
From Sky’s Lewis GoodallFrom Sky’s Lewis Goodall
astonishing: Hammond barely mentioned any benefits to Brexit at all. Spoke about it as if he were mitigating a natural disaster.astonishing: Hammond barely mentioned any benefits to Brexit at all. Spoke about it as if he were mitigating a natural disaster.
Extraordinary speech from Hammond. given up pretending he thinks there are benefits to Brexit. Confirmation that May's authority has gone.Extraordinary speech from Hammond. given up pretending he thinks there are benefits to Brexit. Confirmation that May's authority has gone.
(To be fair, I don’t remember Hammond ever giving speeches saying there were huge benefits to Brexit.)(To be fair, I don’t remember Hammond ever giving speeches saying there were huge benefits to Brexit.)
Hammond has basically just given the most enormous two fingers to the idea that no deal is better than a bad deal.Hammond has basically just given the most enormous two fingers to the idea that no deal is better than a bad deal.
And my colleague Dan Roberts did like Hammond’s Osborne joke.And my colleague Dan Roberts did like Hammond’s Osborne joke.
it's rare that politician's jokes make me laugh, rarer still for an economics gag. but Hammond on Osborne's contribution to employment data!it's rare that politician's jokes make me laugh, rarer still for an economics gag. but Hammond on Osborne's contribution to employment data!
"we have the strongest employment growth since blah blah, and that's even if we only count George Osborne once" - better first time perhaps."we have the strongest employment growth since blah blah, and that's even if we only count George Osborne once" - better first time perhaps.
9.40am BST9.40am BST
09:4009:40
Hammond's speech - SummaryHammond's speech - Summary
Here are the main points from Philip Hammond’s Mansion House speech.Here are the main points from Philip Hammond’s Mansion House speech.
Hammond, the chancellor, said the UK should abide by EU customs union rules for a period after Brexit. (See 9.08am) This would almost certainly lead to a delay in the UK being able to implement new trade deals with other countries, because the EU would not let the UK set its own tariffs while it was still effectively in the customs union.Hammond, the chancellor, said the UK should abide by EU customs union rules for a period after Brexit. (See 9.08am) This would almost certainly lead to a delay in the UK being able to implement new trade deals with other countries, because the EU would not let the UK set its own tariffs while it was still effectively in the customs union.
He insisted the government would “manage migration ... not seek to shut it down’ after Brexit.He insisted the government would “manage migration ... not seek to shut it down’ after Brexit.
Just as the British people understand the benefits of trade – so, too, they understand how important it is to business to be able to access global talent and to move individuals around their organisations.Just as the British people understand the benefits of trade – so, too, they understand how important it is to business to be able to access global talent and to move individuals around their organisations.
So, while we seek to manage migration, we do not seek to shut it down.So, while we seek to manage migration, we do not seek to shut it down.
He confirmed that he wanted Brexit to involve a transitional phase, “to avoid unnecessary disruption and dangerous cliff edges”.He confirmed that he wanted Brexit to involve a transitional phase, “to avoid unnecessary disruption and dangerous cliff edges”.
He claimed that some Europeans were already using Brexit to seek to impose “protectionist” restrictions on the City.He claimed that some Europeans were already using Brexit to seek to impose “protectionist” restrictions on the City.
Let’s be honest, we are already hearing protectionist agendas being advanced, disguised as arguments about regulatory competence, financial stability, and supervisory oversight.Let’s be honest, we are already hearing protectionist agendas being advanced, disguised as arguments about regulatory competence, financial stability, and supervisory oversight.
We can have no truck with that approach.We can have no truck with that approach.
But we acknowledge that, as Britain leaves the EU, there are genuine and reasonable concerns among our EU colleagues about oversight of financial markets that will then be outside EU jurisdiction, but which provide a vast proportion of economically vital financial services to EU firms and citizens.But we acknowledge that, as Britain leaves the EU, there are genuine and reasonable concerns among our EU colleagues about oversight of financial markets that will then be outside EU jurisdiction, but which provide a vast proportion of economically vital financial services to EU firms and citizens.
He said Europe needed to avoid the “fragmentation of financial services” and he said Brexit would have to involve “evidence-based, symmetrical and transparent” rules for the regulation of financial services.He said Europe needed to avoid the “fragmentation of financial services” and he said Brexit would have to involve “evidence-based, symmetrical and transparent” rules for the regulation of financial services.
He said he wanted a Brexit “that puts jobs and prosperity first”. (This is similar to Labour’s slogan; it wants a “jobs-first Brexit”.)He said he wanted a Brexit “that puts jobs and prosperity first”. (This is similar to Labour’s slogan; it wants a “jobs-first Brexit”.)
He said he was taking measures to expand the supply of capital funding in the UK, to compensate for the impact of the UK no longer getting European Investment Bank infrastructure investment after Brexit. He said that he would broaden the range of the UK guarantee scheme so that it offers construction guarantees for the first time, that the British Business Bank would increase the amount it invests in venture capital funds and that he would bring forward some of the investment in the autumn statement.He said he was taking measures to expand the supply of capital funding in the UK, to compensate for the impact of the UK no longer getting European Investment Bank infrastructure investment after Brexit. He said that he would broaden the range of the UK guarantee scheme so that it offers construction guarantees for the first time, that the British Business Bank would increase the amount it invests in venture capital funds and that he would bring forward some of the investment in the autumn statement.
He acknowledged that the public were “weary” of austerity. And he said that he had already relaxed the government’s anti-austerity drive, setting a longer timescale for getting the budget into surplus when he took over as chancellor last year. But he played down the prospect of further measures to undo austerity, saying that he was opposed to higher taxes or higher borrowing.He acknowledged that the public were “weary” of austerity. And he said that he had already relaxed the government’s anti-austerity drive, setting a longer timescale for getting the budget into surplus when he took over as chancellor last year. But he played down the prospect of further measures to undo austerity, saying that he was opposed to higher taxes or higher borrowing.
Funding for public services can only be delivered in one of three ways:Funding for public services can only be delivered in one of three ways:
Higher taxes;Higher taxes;
Higher borrowing;Higher borrowing;
Or stronger economic growth.Or stronger economic growth.
And only one of those three choices is a long-term sustainable solution for this country in the face of the inexorable pressure of an ageing population.And only one of those three choices is a long-term sustainable solution for this country in the face of the inexorable pressure of an ageing population.
Higher taxes will slow growth, undermine competitiveness, and cost jobs…Higher taxes will slow growth, undermine competitiveness, and cost jobs…
…so the government will remain committed to keeping taxes as low as possible;…so the government will remain committed to keeping taxes as low as possible;
And higher discretionary borrowing to fund current consumption is simply asking the next generation to pay for something that we want to consume, but are not prepared to pay for ourselves…And higher discretionary borrowing to fund current consumption is simply asking the next generation to pay for something that we want to consume, but are not prepared to pay for ourselves…
…so we will remain committed to the fiscal rules set out at the Autumn Statement which will guide us, via interim targets in 2020, to a balanced budget by the middle of the next decade.…so we will remain committed to the fiscal rules set out at the Autumn Statement which will guide us, via interim targets in 2020, to a balanced budget by the middle of the next decade.
Stronger growth is the only sustainable way to deliver better public services, higher real wages and increased living standards.Stronger growth is the only sustainable way to deliver better public services, higher real wages and increased living standards.
He acknowledged that globalisation was unpopular and said the government would push for a new version, with a greater focus on services. This was “Gloablisation 2.0”, he implied, although he did not use that phrase.He acknowledged that globalisation was unpopular and said the government would push for a new version, with a greater focus on services. This was “Gloablisation 2.0”, he implied, although he did not use that phrase.
Britain has benefited from globalisation.Britain has benefited from globalisation.
But we must not turn a blind eye to the growing tide of hostility to it in parts of the developed world.But we must not turn a blind eye to the growing tide of hostility to it in parts of the developed world.
To counter that, we must push for a new phase of globalisation, to ensure that it delivers clear benefits for ordinary working people in developed economies.To counter that, we must push for a new phase of globalisation, to ensure that it delivers clear benefits for ordinary working people in developed economies.
To date, much of the thrust of globalisation has focused on the removal of barriers to trade in goods.To date, much of the thrust of globalisation has focused on the removal of barriers to trade in goods.
“Globalisation 1.0” if you like - expanding the opportunities for major goods exporters like China and Germany to sell their products to a larger market.“Globalisation 1.0” if you like - expanding the opportunities for major goods exporters like China and Germany to sell their products to a larger market.
But our economy is 80% services.But our economy is 80% services.
And many of our areas of greatest competitiveness are in services: for example, finance and insurance, ICT and communications.And many of our areas of greatest competitiveness are in services: for example, finance and insurance, ICT and communications.
So, for the UK to be able to share fairly in the benefits of globalisation, we need to lead a global crusade for liberalisation of services.So, for the UK to be able to share fairly in the benefits of globalisation, we need to lead a global crusade for liberalisation of services.
He said the government “must, and will, also get to the bottom of the failure at Grenfell [Tower] and take decisive action to ensure nothing like this ever happens again.”He said the government “must, and will, also get to the bottom of the failure at Grenfell [Tower] and take decisive action to ensure nothing like this ever happens again.”
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I’m sorry the comments were left off earlier. That was an oversight. They are on now.I’m sorry the comments were left off earlier. That was an oversight. They are on now.
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What Hammond said about the UK sticking with EU customs union rules for short term after BrexitWhat Hammond said about the UK sticking with EU customs union rules for short term after Brexit
This is what Philip Hammond, the chancellor, said in his speech about how Britain would have to abide by EU customs union rules for a period after Brexit.This is what Philip Hammond, the chancellor, said in his speech about how Britain would have to abide by EU customs union rules for a period after Brexit.
So, how do we achieve this “Brexit for Britain”? ...So, how do we achieve this “Brexit for Britain”? ...
By agreeing frictionless customs arrangements to facilitate trade across our borders – and crucially – to keep the land border on the island of Ireland open and free-flowing.By agreeing frictionless customs arrangements to facilitate trade across our borders – and crucially – to keep the land border on the island of Ireland open and free-flowing.
To do this in the context of our wider objectives will be challenging.To do this in the context of our wider objectives will be challenging.
It will almost certainly involve the deployment of new technology.It will almost certainly involve the deployment of new technology.
And therefore we’ll almost certainly need an implementation period, outside the customs union itself, but with current customs border arrangements remaining in place, until new long-term arrangements are up and running.And therefore we’ll almost certainly need an implementation period, outside the customs union itself, but with current customs border arrangements remaining in place, until new long-term arrangements are up and running.
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Pound falls after Bank of England governor says now is not the time to raise interest ratesPound falls after Bank of England governor says now is not the time to raise interest rates
The pound has fallen to a one-week low against the US dollar, as Mark Carney declares it is too early to raise interest rates.The pound has fallen to a one-week low against the US dollar, as Mark Carney declares it is too early to raise interest rates.
The Bank of England governor is telling the Mansion House audience that the UK economy isn’t strong enough to handle higher interest rates, especially as we don’t know how the Brexit talks will proceed.The Bank of England governor is telling the Mansion House audience that the UK economy isn’t strong enough to handle higher interest rates, especially as we don’t know how the Brexit talks will proceed.
This sent the pound sharply lower, to $1.2674:This sent the pound sharply lower, to $1.2674:
Carney explains that he doesn’t agree with the three members of the Monetary Policy Committee (MPC) who voted to hike borrowing costs last week (they were outvoted by the other five members, including Carney).Carney explains that he doesn’t agree with the three members of the Monetary Policy Committee (MPC) who voted to hike borrowing costs last week (they were outvoted by the other five members, including Carney).
Here’s the relevant section from Mark Carney’s speech:Here’s the relevant section from Mark Carney’s speech:
Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.
From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.
In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.
Here’s the moment that traders saw those quotes:Here’s the moment that traders saw those quotes:
The pound falls after Mark Carney says it's not yet time to raise interest rates in Britain https://t.co/8l0x5mr7gl pic.twitter.com/TBHvfg4q3hThe pound falls after Mark Carney says it's not yet time to raise interest rates in Britain https://t.co/8l0x5mr7gl pic.twitter.com/TBHvfg4q3h
My colleague Graeme Wearden has more on his business live blog.My colleague Graeme Wearden has more on his business live blog.
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The Carney speech involves some hardcore macroeconomics. Nothing wrong with that, of course, but rather than do it minute by minute, it is probably best if I just summarise from the full text.The Carney speech involves some hardcore macroeconomics. Nothing wrong with that, of course, but rather than do it minute by minute, it is probably best if I just summarise from the full text.
I’ve got a full text of the Hammond speech too, so I will summarise that first.I’ve got a full text of the Hammond speech too, so I will summarise that first.
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Carney says UK faces 'weaker real income growth' as Brexit takes placeCarney says UK faces 'weaker real income growth' as Brexit takes place
This is what Carney said about Brexit.This is what Carney said about Brexit.
Since the prospect of Brexit emerged, financial markets, notably sterling, have marked down the UK’s economic prospects.Since the prospect of Brexit emerged, financial markets, notably sterling, have marked down the UK’s economic prospects.
Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change. Indeed, in such exceptional circumstances, the MPC is required to balance any trade-off between the speed with which it returns inflation sustainably to the target and the support that monetary policy provides to jobs and activity.Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change. Indeed, in such exceptional circumstances, the MPC is required to balance any trade-off between the speed with which it returns inflation sustainably to the target and the support that monetary policy provides to jobs and activity.
That is why last summer the Bank announced a series of monetary and macro-financial measures to support the economy during this transition. This stimulus is working. Credit is widely available, the cost of borrowing is near record lows, the economy has outperformed expectations, and unemployment has reached a 40 year low.That is why last summer the Bank announced a series of monetary and macro-financial measures to support the economy during this transition. This stimulus is working. Credit is widely available, the cost of borrowing is near record lows, the economy has outperformed expectations, and unemployment has reached a 40 year low.
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The full text of Mark Carney’s speech is now here (pdf), on the Bank of England’s website.The full text of Mark Carney’s speech is now here (pdf), on the Bank of England’s website.