Sun

Mr. SUN Yu (Elic) VP Client Relations China - Manages Chinese business relations for the brand. Elic provides market commentary for well-known media in China, including: People.cn, Financial News and China Finance Information Network. Elic serves as a special guest analyst on the CCTV Financial Channel to provide real-time analysis on the foreign exchange market.

Talks of avoiding a hard Brexit are a fatal show of weakness for the United Kingdom, according to new Conservative minister Steve Baker, who insists there will be no compromise on Prime Minister Theresa May’s exit plan.

Capitulating on Mrs. May’s hard Brexit plan would be “like putting blood in the water,” the minister said in reference to ongoing negotiations with Brussels.

“We have taken a major strategic decision to leave the European Union… the last thing we need to do now is take a misstep,” he said.[1]

Even Brexit Supporters are No Longer Supporting Brexit!

The remarks came amid growing skepticism about the U.K.’s exit strategy from within the Tory’s own ranks. Dominic Cummings – one of the most high-profile Brexiteers – recently implied that leaving the EU might not be the best outcome for Britain after all.

Cummings was the director of Vote Leave and the brains behind the £350 million-for-the-NHS slogan that appeared on the side of the campaign bus.[2]

A Weakened UK Empowers the EU

Prime Minister May’s bargaining position with the EU was significantly weakened last month after her Conservative party failed to reclaim a parliamentary majority in a snap election. The result forced the Tories into an alliance with Northern Ireland’s Democratic Unionist party. Calls for Theresa May’s resignation have already surfaced.

The EU isn’t taking Britain’s hard-exit approach lightly. Frans Timmermans, the powerful First Vice-President of the European Commission, has compared the U.K.’s Eurosceptic politicians to a character from Monty Python in an apparent mock of London’s trade ambitions.[3]

Brexit: the Catalyst for UK-EU Relationship?

Relations between Brussels and the U.K. could sour over the next two years as both sides seek to renegotiate a massive trade agreement. Although the U.K. has expressed interest in maintaining free trade relations with the Single Market, that may prove to be a tough sell without also agreeing to maintain mobility rights.

Negotiations between the two sides officially began last month.

On the domestic front, Brexit uncertainty has triggered a fresh bout of business anxiety. A “triple whammy” of PMI results for June showed slowing growth across the nation’s services, manufacturing and construction industries.[4]

 

[1] Rob Merrick (5 July 2017). “Hard Brexit: New Tory minister slaps down Cabinet colleagues trying to soften Theresa May’s exit plans.” The Independent.

[2] Jonathan Freedland (5 July 2017). “Is Brexit an error? Now even Vote Leave’s chief is having doubts.” The Guardian.

[3] James Crisp (5 July 2017). “EU chief mocks Brexit by comparing Britain’s trade ambitions to a Monty Python sketch.” The Telegraph.

[4] Phillip Inman (5 July 2017). “UK services sector growth hits four-month low amid Brexit fears.” The Guardian.

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