Anti-Brexit demonstrators outside the British Parliament in London.
Yui Mok | PA Images | Getty Images
The British government’s plans for a no-deal Brexit warn of severe disruption to cross-Channel routes, affecting the supply of medicines and certain types of fresh foods, and say that protests and counter-protests will take place across the country, accompanied by a possible rise in public disorder.
The “Operation Yellowhammer” worst-case assumptions published on Wednesday were prepared on Aug. 2, the government said, nine days after Boris Johnson became prime minister, and form the basis of its no-deal planning.
The document, which looks at the worst that could happen if Britain leaves the European Union on Oct. 31 without a deal, said public and business readiness for such an outcome would likely be low, in part because of continued political confusion in the run-up to Brexit day.
It said trucks could have to wait up to two and a half days to cross the English Channel and British citizens could be subject to increased immigration checks at EU border posts.
“Certain types of fresh food supply will decrease,” it said. “There is a risk that panic buying will cause or exacerbate food supply disruption.”
It said the flow of traffic across the English channel could be reduced by as much as 60% on the first day after a no-deal Brexit. The worst disruption could last for up to three months.
Traffic queues could affect fuel deliveries, disrupting supplies in London and south-east England, and panic buying could cause shortages in other parts of the country, it said.
Cross-border financial services would be affected as would information-sharing between police and security services, according to the document.
Documents from Operation Yellowhammer were first published in the Sunday Times newspaper on Aug. 18.
Michael Gove, the minister in charge of coordinating “no-deal” preparations, said then that the document was old and did not reflect current levels of preparedness.
He said on Wednesday that assumptions contained in the five-page published document were currently being reviewed, but they were the most recent complete iteration of the plans.
The opposition Labour Party said the document confirmed the severe risks of a no-deal Brexit.
“It is completely irresponsible for the government to have tried to ignore these stark warnings and prevent the public from seeing the evidence,” said Labour’s Brexit spokesman Keir Starmer.
“Boris Johnson must now admit that he has been dishonest with the British people about the consequence of a No Deal Brexit.”
In releasing the document, Gove was acceding to a request from lawmakers. But he refused to make public the advice of government advisers about Johnson’s decision to prorogue, or suspend, parliament from Monday until Oct. 14.
Scotland’s highest court of appeal ruled that decision was unlawful on Wednesday, prompting calls for lawmakers to return to work.
Gove said the publication of advice given to ministers would be an “inappropriate and disproportionate” use of parliamentary procedure, and the individuals would have no right to reply.
Bank of Canada Governor Stephen Poloz to step down in June 2020
Carolyn Wilkins, senior deputy governor of the Bank of Canada, left, and Stephen Poloz, governor of the Bank of Canada, leave the Bank of Canada building for a press conference in Ottawa, Ontario, Canada, on Wednesday, Oct. 24, 2018.
Justin Tang | Bloomberg | Getty Images
Bank of Canada Governor Stephen Poloz will step down when his mandate expires next June, the bank said on Friday, and the front-runner in the race to take his place could become the first woman to head the country’s central bank.
Many economists and market strategists surveyed by Reuters this week said Senior Deputy Governor Carolyn Wilkins could be his successor.
Poloz, who is in the final year of a seven-year term, will not seek a reappointment and a process to select the next governor has begun, the bank’s board of directors said in a statement.
The board of directors oversees the selection process of a new governor, but the finance minister and the prime minister have the final say.
Poloz said that during his tenure the bank had “created the conditions for steady economic growth, low unemployment, and inflation close to target through very challenging times,” according to the statement.
Unlike some of its global peers, Canada’s inflation rate is near the central bank’s 2% target. The Bank of Canada has held its overnight interest rate steady since October 2018, even as several of its counterparts, including the U.S. Federal Reserve, have eased.
Kudlow says a trade deal with China is ‘close’ amid ‘intense’ talks
Larry Kudlow, White House National Economic Council director, said the U.S. and China are “close” to a trade deal but that the administration was prepared to walk away if it did not get the terms they wanted.
“The president has said many times if the deal is no good, if the assurances with respects to preventing future thefts, if the enforcement procedure is no good he has said we will not go for it. We will walk away,” Kudlow said on CNBC’s “Squawk on the Street” on Friday. “The president has said that if we can not get the enforcement and the assurances, then we will not go forward.”
The two countries are in talks to finalize a so-called phase one trade deal as 15% tariffs on $165 billion in Chinese imports are set to kick in Dec. 15. Kudlow said the two sides are moving closer to a deal.
“The deal is close. It’s probably even closer than in mid-November,” Kudlow said. “Deputy level met again … The reality is constructive talks, almost daily talks. We are in fact close…There’s no arbitrary deadlines, but the fact remains December 15 is a very important date with respect to a no go or go on tariffs.”
Kudlow characterized the recent talks between the world’s two largest economies as “intense.”
“I say intense because this is a very important matter,” Kudlow said. “There’s so much at stakes here when you go through the various categories… We can’t afford, we must not permit any country, China or whoever, to willy nilly steal our breakthroughs in technology and advanced micro-processing related to 5G.”
Trump said on Thursday that trade talks with Beijing were going “very well.” He added that something could happen regarding those tariffs that are set to be imposed in less than 10 days, but added they are not discussing that yet.
The Wall Street Journal reported on Thursday the U.S. and China still haven’t reached a consensus on the amount of agriculture goods that China would buy.
Oil on track for weekly gain as OPEC+ set to confirm supply cut
A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.
Oil prices fell on Friday, but were set for weekly gains ahead of the OPEC+ meeting which kicked off Friday in Vienna.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – a grouping known as OPEC+ – agreed on Thursday to more output cuts to avert oversupply as economic growth stagnates amid the U.S.-China trade war.
But OPEC stopped short of pledging action beyond March and analysts have questioned the impact of the latest curbs.
Brent futures were down 18 cents at $63.21, but are set to rise 1.5% on the week.
West Texas Intermediate oil futures fell 33 cents to $58.10 a barrel. They are set to rise nearly 6% on the week.
The cuts next year will expand the existing agreement by an extra 500,000 barrels per day (bpd) reduction in the first quarter next year, through tighter compliance and some adjustments. OPEC’s current agreement is a supply cut of 1.2 million bpd and the increased amount represents about 1.7% of global oil output.
“If we were to have an outcome of an extension of cuts with only the official quota of the OPEC+ group being reviewed lower (the 500,000 bpd), rather than actual production, then the change in supply policy would be cosmetic (given below target production in some countries, notably Saudi Arabia and Angola),” said Harry Tchilinguirian, global oil strategist at BNP Paribas.
OPEC is likely to shoulder 340,000 bpd in fresh cuts and non-OPEC producers an extra 160,000 bpd, one source said on Friday.
Any price gains from the OPEC+ output cut are likely to benefit American producers not party to any supply curbing agreement. American drillers have been breaking production records even as they cut the number of oil rigs in operation, filling gaps in global supplies.
“North American shale supply will continue growing even in an environment with lower oil prices,” Rystad Energy said in a note.
Higher oil prices are also supporting the initial public offering of Saudi Arabia’s state-owned oil company, Saudi Aramco, which priced its shares on Thursday at the top of an indicated range.
The sale was the world’s biggest initial public offering (IPO), beating Alibaba Group Holdings’ $25 billion listing in 2014, but fell short of a $2 trillion valuation for Aramco sought by Saudi Crown Prince Mohammed bin Salman.
Foreign investors stayed away and the sale was restricted to Saudi individuals and regional investors.
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