Hammond outlines cost of Brexit
In his first autumn statement on budget policy the British Chancellor of the Exchequer Philip Hammond on Wednesday announced tax cuts and increased public investment. As a result of Brexit lower growth and higher inflation are expected, he said. Hammond's calm demeanour stands in sharp contrast to Prime Minister May's contradictory Brexit policy, journalists comment.
At last the voice of reason
Chancellor of the Exchequer Philip Hammond found the right tone for the right message, the Financial Times comments approvingly:
“While he adopted Prime Minister Theresa May’s slogan of 'an economy that works for all', he appears largely to have resisted any pressure there may have been from Number 10 for costly giveaways for the 'Jams' - those who are 'just about managing' on lower to middle incomes. ... The most encouraging aspect of Mr Hammond’s debut was the absence of ideology, rhetorical flourish or headline-grabbing gimmickry. Indeed, he ended with a promise to introduce a much-needed streamlining of an overly theatrical Budget process. Given the turbulence that lies ahead, a chancellor who exhibits unflashy competence, and appeals to sense over emotion, is what the country needs.”
Put an end to London's cherry-picking
Londoners will pay a heavy price for the Brexit and Britain's key demands for the upcoming negotiations with the EU will make it even more costly, Il Sole 24 Ore notes:
“What remains completely incomprehensible is the pigheaded insistence on being allowed to remain in the single market while at the same time being exempted from the free movement of persons regulations. Five months after the Brexit vote the mantra in London still hasn't changed: refrain from discussing the single market and leave the EU with the best deal possible. ... Everything is possible, but frankly speaking we hope that such a solution is not on the cards. Only iron resolve on the part of the EU states can put an end to this behaviour, which leads nowhere and only fuels feelings of insecurity. And such feelings ultimately threaten to pave the way for new budget measures that could be far more painful than the medicine that Philip Hammond has now prescribed for his country.”
Turbocapitalism was not on May's agenda
With Brexit just around the corner the UK needs to focus on strengthening its financial sector although this could put Prime Minister Theresa May in a major dilemma, political scientist Harold James writes in Jornal de Negócios:
“The principle of comparative advantage demands that the UK emphasize its service industries, and especially financial services. The City of London already drives the British economy, and one post-Brexit scenario has London’s role as a global financial center actually increasing. To make that happen, the British government would have to establish a regime of low taxes, light regulations, and favorable treatment toward both skilled and unskilled immigrants working in and around financial services. But every part of this plan conflicts with the government’s goal of reining in the finance industry and limiting migrant flows.”