020 7898 0500Following on from the European Parliament backing a motion setting out its position for the Brexit negotiations, Prime Minister Theresa May met European Council President Donald Tusk at Downing Street yesterday.
Just to recap, MEPs have agreed that there is a need for a phased approach. They want the UK to settle financial commitments first before talks on future trade deals can begin. The UK is considered liable for financial obligations that apply after it leaves the EU.
An EU source stated that Tusk and May had a ‘good and friendly’ meeting of about two hours. They have agreed to stay in regular contact throughout the Brexit process to seek to reduce any tensions that may arise. However, Tusk has warned that the Brexit negotiations could become ‘confrontational’ at times. Gibraltar, as an example, will inevitably be difficult.
So far this week we’ve seen mixed economic data. The focus has been on purchasing managers’ index data for the services sector as well as manufacturing and construction. The manufacturing and construction sectors disappointed, while the services sector saw faster-than-expected growth and an improvement over the previous month. The services sector accounts for roughly 70% of economic activity.
Today manufacturing production and goods trade balance data will be released and Bank of England Governor Mark Carney is due to speak. Markets will keep a close eye on the rhetoric he uses for clues on future monetary policy.
