Our vote to leave the EU in June 2016 on its own has caused much uncertainty and continues to do so as the negotiations are ongoing, the Conservative government however certainly hasn’t helped the situation with a change of leader soon after the referendum causing yet more uncertainty and concern.
Then after the Easter bank holiday this year Teresa May, despite having previously said she would not call an election, actually announced an election for June 2017. Called a snap election it didn’t allow a great deal of time for campaigning for any of the parties and with Labours Jeremy Corbyn on the back foot it looked to be a done deal for Teresa May and the Conservatives who were 20 points ahead as the election date neared.
Things couldn’t have gone more wrong on the night of the count, anyone who watched the results come in during the night if Conservative watched in dismay as Teresa May’s lead quickly changed to a growing loss, if Labour they watched with amazement and excitement as Jeremy Corbyn’s climb accelerated.
To some, the worst result possible, a hung parliament meant that although Teresa May took the most votes she did not win enough to take full control of the government, falling some 9 points short the Conservatives had to seek a coalition with the DUP, Irelands Democratic Unionist Party which cost the country a billion pound to support infrastructure improvements in Ireland. This coalition gave the Conservative the necessary quota to be able to form a government in time for the Queens speech.
On June 19th, the Brexit negotiations finally began, almost a year after the referendum, the negotiating teams from the UK and EU were planned to take place face to face for one week a month. Focusing on what the EU deemed to be their priorities were the rights of EU citizens living and working in the UK and the UK citizens living and working in the EU, agreeing the amount of money the UK would need to pay upon leaving the EU and how the Irish border will operate.
The first round of talks was about getting to know each other and working out the schedules. The second round in July was more serious where full and detailed discussions took place on the 4 key areas, little progress has been made since in part due to the summer recess in the EU and in part due to the UK papers written during that recess not meeting the needs and satisfaction of the EU negotiators.
Meanwhile, the internal turmoil in the UK government is ongoing with continued and regular doubt over Teresa Mays position, the Conservatives however do not want to rock the boat as it will lead to Labour taking over government and Jeremy Corbyn taking the position of prime minister. Jeremy Corbyn is now waiting in the side lines waiting for the Conservative party to fall apart, this whole situation is making a mockery of the UK within Europe with European leaders dismayed at how the UK and the UK government are split over the vote to leave with some suggesting the government doesn’t know what it wants and is unable to agree on their negotiating position.
Whilst the EU is not impressed with the situation at this stage of the negotiations it is concerned that the situation could render a disastrous outcome for the EU as well as the UK. There are many integrated supply chains between the EU and UK especially in the car, banking and insurance industries which could cause many financial and operational problems for the EU, add that to the trade situation and it doesn’t look at all good at this stage.
Some UK banks are now implementing their contingency plans by moving some of their operations to other EU countries to prevent the impact of a cliff edge exit in March 2019.
Inflation is continuing to rise with the latest figures released by the Bank of England putting inflation at 2.9% in early September, with clothes and footwear rising the steepest at 4.6%. These latest figures have prompted the Bank of England to suggest an interest rate rise could come sooner than expected, possibly as early as November.
The raising of interest rates will add to the already restricted spending power of consumers causing many families to struggle further. Businesses in different industry sectors are already noticing a fall in sales which will only become worse when interest rates are raised.
Where do we go from here, well it remains to be seen what happens with the negotiations and whether the EU and the UK can begin to agree on the 4 key areas, these 4 areas must be agreed according to the EU negotiators before any future planning can begin.
We have both interesting and worrying times ahead.