German Chancellor backs up UK PM May
When you are down there is nothing like a friend who can give you a helping hand to give you a lift.
Yesterday, Theresa May who is in a fight to save her job and keep her shattered Conservative Party together, got the support she greatly needed and from an unlikely source.
At a working lunch the UK Prime Minister made a plea to her fellow leaders that she needed back up from them to get a deal so that could sell it to the Euro skeptics and the populous in Great Britain. She also underlined that they will have to do the same with their own people. She reminded them of her recent Florence speech where she mentioned the UK willingness to discuss the so called UK’s divorce bill which seems to be the main stumbling block for the negotiations team on both sides.
To the rescue came German Chancellor Angela Merkel who admitted it was up to both the UK and the EU to move forward together before we see the end of 2017. Merkel also mentioned there were “encouraging” signs that progress was being made with the Brexit talks and that “from my side there are no indications at all that they won’t succeed”.
This gesture of support will give May something to take back to the UK and the power to attempt to move negotiations along. This also gives hope to the UK negotiating team that trade talks can indeed start in December.
Having attended the Thursday gathering of EU leaders, May will now head home leaving the remaining EU leaders to discuss the Brexit without her but she must have more confidence knowing she has a friend still there in the form of Angela Merkel.
Though the general consensus is that the EU leaders will highlight that the general feeling is that “insufficient progress” has been made with the Brexit talks, clearly there are now signs that the EU summit will not be a total disaster for the UK and that chances for trade talks to officially start in December are looking like a possibility.
Marketwise, Merkel’s rescue of May has done very little for the sterling which appears to still be stinging from yesterday’s lower than expected UK Retail sales ( -0.8% vs -0.1% expected, ouch!) as at the time of writing the GBP/USD is trading at 1.31436.