Prime Minister May of the United Kingdom survived the annual conference of the Conservative Party and that strengthens her position. The next milestone is the October EU summit and negotiations are intensifying ahead of it.
French President Macron struggles with low approval ratings and decreasing economic confidence, despite a strong parliamentary mandate for reform and upward economic potential. The 2019 budget proposal reduces the size of government, modest improvements in public finances and stimulus for private demand.
The Brexit summit of EU leaders in Salzburg on 19-20 September ended up in a drama. That is not justified but it suggests the EU and the UK lack a good understanding of each other and that raises the odds of a ‘Hard Brexit’ by accident.
Leaving the EU has direct and structural economic costs for the UK, irrespective of how the country leaves the EU. The magnitude of the impact depends on the future trade relationship they will negotiate with the EU, and a transition period could soften the blow. From that perspective it is not reassuring that with six months left before ‘Brexit day’ the UK is still divided over the Brexit objectives.
On 27 September the Italian government presented its budget target for 2019. The worsened outlook has shocked markets and kept them busy since. The government will expectedly temper part of its plans if necessary to calm markets. That said, the risk that it will do too little too late cannot be neglected.
Economic Report Dutch version
On 24 September the United States have installed tariffs on another 200 billion USD imports from China. China responded with tariffs on 60 billion USD of imports from the US. We expect the negative economic effects to be more pronounced for China than for the US.
The UK government published a long awaited White Paper on the blueprint for the post-Brexit EU-UK relationship. The proposal brings more clarity but not more certainty. Hence the threat of a hard Brexit persists.
On 6 July PM May and her cabinet agreed on a blueprint for the future EU-UK economic relationship, one that keeps close ties to the EU post-Brexit and angered the Brexiteers. PM May averts another crisis but is not out of the woods yet.
A large cash buffer and new debt relief measures limit the risk the Greek government runs into payment difficulties in the short run. Yet due to its high debt Greece stays dependent upon the mercy of Eurozone partners and the markets for a long time.
The choice of the British population to leave the EU will have significant consequences for trade between the EU and the UK and will affect many companies. Our Brexit Monitor helps you track the latest Brexit Developments and anticipate on further progress.