Let’s start the day with some economic stats (exciting, I know)!
UK’s productivity growth over the past two quarters was the strongest since the recession of 2008, according
to the Office for National Statistics. Output per hour rose by 0.8% in the three months to December, following growth of 0.9% in the previous three months.
Rise in wages also exceeded expectations, figures showed, but it still lags behind inflation which was at 3% at the end of last year. While unemployment was slightly higher, it still remains low at 4.4%.
Commenting on the figures, the IoD’s Head of Policy Research Seamus Nevin said
, “today’s employment figures highlight the imperative for government to get our skills system right” as they suggest that “access to staff may be peaking as the labour market begins to tighten.”
To add to the good news, separate figures released yesterday showed that the Government was on track to borrow significantly less than expected in 2017-18. Borrowing in the first 10 months of the financial year was £37.7bn, 16% less than in the same period in 2016-17
The morning's top stories, rounded up for your convenience.
UK Government published
its proposals for the transition period after Brexit yesterday. The document says that transition should last as long as it takes to “prepare and implement the new processes and new systems.” Nevertheless, Number 10 has denied that this means it would last longer than two years, as initially planned.
“The UK believes the [transition] period’s duration should be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin the future partnership,” states the document. EU leaders have previously suggested for transition to end on 31 December 2020, in time before the payment for the next EU budget is required.
The proposal goes further to suggest that the UK will abide by EU laws and will not be able to sign new trade deals without permission from the bloc during the transition. It also calls for involvement in talks on future fishing quotas.
At a first glance, the document would not be particularly pleasing for Eurosceptics - it doesn’t contain pushback on EU’s demands for free movement of people during the transition and no power to implement new trade agreements independently. However, Jacob Rees Mogg, one of the most prominent Eurosceptic MPs, commented that he’s been “assured” by a Cabinet Minister that “it is not an agreed document merely ‘a draft of a draft’.”
The document comes as Ministers prepare
for a key meeting in Chequers later today, the Prime Minister’s country retreat, during which they will aim to agree on what the future trade relationship with the EU should look like. With the Government clearly divided over whether to pursue divergence from or alignment with the EU’s rules, the gathering is likely to get heated. This will be the last major meeting to discuss the matter before Theresa May’s major speech next week, during which she will spell out Britain’s post-Brexit vision.
MPs on the Treasury Select Committee have launched
an inquiry into cryptocurrencies and the technology behind them. The overriding aim will be to understand the risks and benefits of digital money. The Committee is planning to look into how consumers and the UK’s financial infrastructure might be better protected without blocking the use of the innovation.
Many governments and banks around the world have been sceptical of cryptocurrencies, however underlying technologies, such as blockchain, which record and verify the chain of transactions, have received praise and may prove to be useful in the future.
The inquiry follows a huge rise of interest and investment into digital currencies in recent months. Bitcoin is one of the most well known cryptocurrencies – it soared in value last year but has also been prone to extreme periods of price volatility which recently led to its price crash. Europe’s top three financial regulators released a joint warning to consumers earlier this month about the extreme volatility and lack of legal protection when investing in cryptocurrencies.
Meanwhile, leaders of Venezuela launched
their own cryptocurrency earlier this week, in an attempt to bypass economic sanctions imposed by the US government. The country claims it is the world’s first sovereign cryptocurrency.
UK Government is reportedly
preparing for Unilever to choose the Netherlands over the UK for its new headquarters, following months of political pressure. Reports come after talks took place between Unilever and British officials, with one of them commenting that “it wouldn’t be a great surprise if it happened” although the government has not lost all hope just yet.
Although the shift of headquarters by one of the largest British companies would be a blow to Britain, there are hopes that the UK would benefit from other decisions in the changes that are planned by the company, such as research jobs. Unilever is currently in a unique position - it has a dual legal structure involving two parent companies in Rotterdam and London. It holds two annual meetings and has two separately listed companies. However, the company has decided to simplify its structure by merging both parts and making it single share.
The decision is expected to be taken at the next scheduled Unilever’s board meeting in the second week of March.
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