I hope that this morning’s speech by Philip Hammond signals a more open and flexible approach by the UK Government to Brexit and in particular to its future trading relationship with the European Union.
I was struck by his desire to avoid fragmentation of financial services and the principles he outlined to approaching this challenge:
• A new process for establishing regulatory requirements for cross-border business that reflects international standards• Co-operation arrangements that are reciprocal, reliable and prioritise financial stability• Permanent arrangements that give certainty to businesses regulated under these regimes
As he eloquently put it, the future of the UK’s economy is inexorably linked to the kind of Brexit deal that we reach with the EU. ICAEW’s own economic forecast published earlier in the week identified a looming threat to economic growth from weakening business investment, rising inflation and slower wage growth. Getting a positive outcome for the UK in terms of a trade deal will help address this.
I was disappointed that the economy and business were largely absent from the General Election campaign. That the Chancellor has put it back firmly on the agenda is a significant step forward but this needs to be carried through, not just in terms of Brexit but in the context of the Government’s plans to rejuvenate the economy.