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Wednesday's Business and Politics round-up

13 Feb 2019

Commuters reading daily news on their journey to work

Good morning,

Prime Minister Theresa May asked MPs to give her more time to negotiate changes to the Irish backstop clause of the Brexit agreement yesterday, promising to give an update on 26 February. She said that if there isn’t a new deal by then, she would give MPs a say on the next steps in non-binding votes.

MPs had been planning to vote on amendments to Mrs May’s deal on Thursday, but it has now been postponed until the end of the month. The Prime Minister added that she would take the deal back to the House of Commons for a meaningful vote “when we achieve the progress we need”.

In response, Labour leader Jeremy Corbyn accused the Prime Minister of “running down the clock” in an effort to “blackmail” Parliament into backing her deal.

Shortly after Mrs May’s plea to MPs, Yvette Cooper, alongside Labour MPs and Tory rebels, put forward plans to give Parliament a separate vote two weeks before 29 March, which could force the Prime Minister to state whether the UK is leaving with or without a deal or whether Brexit date is delayed.

Meanwhile, rumour has it that the EU is open to the idea of extending Article 50, therefore delaying Brexit date, if MPs don’t back Mrs May’s revised deal, as suggested by Prime Minister’s Chief Negotiator Olly Robbins, who was overheard in a Brussels hotel bar chatting with colleagues.

While rumours and speculations continue, one thing is clear: we are to wait another two weeks to potentially get any kind of certainty on Brexit.

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Don't bank on it

Bank of England Governor Mark Carney issued a fresh no-deal Brexit warning yesterday, saying it would create an “economic shock” and would impact the global economy. He pointed out slowing China’s economy and rising trade tensions, adding that “it is in the interests of everyone, arguably everywhere” that a Brexit solution is found. “The Bank of England estimates that a 3% drop in Chinese GDP would knock 1% off global activity, including half a per cent off each of UK, US and euro area GDP,” said Mr Carney.

Speaking at the Barbican in London, the Governor expressed concerns about a “high level of uncertainty” which means that “companies are holding back on making big decisions” and said that securing a good withdrawal deal and a smooth transition was vital for the UK’s economy.

The Bank of England has cut its growth forecasts for the UK, forecasting this year to be the slowest year of growth since 2009 when the economy was in recession after the 2008 financial crisis.

Labour isn't working 

While politicians remain divided over Brexit, the Labour party’s inner battle over anti-Semitism appears to be worsening. Senior figures have reportedly had a row at a shadow cabinet meeting after party chairman Ian Lavery criticised deputy leader Tom Watson, who called for the Liverpool Wavertree branch of the party to be suspended as a result of “bullying” of their MP Luciana Berger.

Anti-Semitism had reportedly not been on the agenda for the meeting, but took over after Labour leader Jeremy Corbyn brought up a letter he had received about it. Ms Berger, who is Jewish, faced potential deselection, which was later withdrawn, for publicly criticising Mr Corbyn’s handling of anti-Semitism.

Labour’s general secretary Jennie Formby revealed on Monday that the past 10 months have seen 673 complaints alleging anti-Semitism against party members, which have resulted in 12 dismissals.

Shop till you drop

Debenhams has secured a cash injection of £40 million and agreed a partnership with Li & Fung, one of the world’s largest product suppliers. This has provided a lifeline for the struggling retailer, whose leadership called it a “first step” towards a sustainable future.

Debenhams issued three profit warnings last year and has been in talks with lenders trying to renegotiate its debts. The retailer is expected to close 20 of its stores this year. The news of the cash injection led to Debenhams' shares going up by more than 30 per cent.

Although the agreement is certainly a welcomed development, it “isn’t going to solve its fundamental problems,” commented Laith Khafal from Hargreaves Lansdown. “Trading conditions remain extremely challenging and the business has a tightrope to walk between cutting costs and investing in improvements.

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