UK equity markets were blighted during June by Brexit, amid rising concerns over the UK’s lack of progress as the deadline moves closer. EC President Donald Tusk called on the UK to “lay (its) cards on the table”. Elsewhere, the US’s increasingly aggressive trade policy continued to generate an unfavourable response from key trading partners.
- Retailers continued to face problems, despite stronger data from the sector
- The UK published its “backstop” post-Brexit proposal for trade with the EU
- PM Theresa May described US tariffs on aluminium and steel as “unjustified and deeply disappointing”
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UK equity markets were blighted during June by Brexit, amid rising concerns over the UK’s lack of progress as the deadline moves closer. Elsewhere, the US’s increasingly aggressive trade policy continued to generate an unfavourable response from key trading partners. Prime Minister Theresa May criticised the decision of US President Donald Trump to impose tariffs on steel and aluminium imports, describing it as “unjustified and deeply disappointing”. Meanwhile, UK International Trade Secretary Dr Liam Fox urged governments to support the global economy through co-operation and urged China to “play its part (by) opening its markets”.
“The UK published its “backstop” proposal for post-Brexit trade with the EU”
European Council President Donald Tusk called on the UK to “lay (its) cards on the table” over Brexit. He warned that the most challenging issues remain unresolved and progress is essential if an agreement is to be reached by October. European aerospace manufacturer Airbus warned that a “no deal” scenario might force the company to “reconsider” its UK-based operations. The UK published its “backstop” proposal for post-Brexit trade with the EU. The plans suggest that, in order to avoid a hard border in Ireland, the UK should temporarily remain in the customs union. A “future customs arrangement” for the long term is expected to be in place “by the end of December 2021 at the latest”. Bank of England (BoE) Governor Mark Carney drew attention to the UK’s “rock solid solution” to a “disorderly Brexit” but said he still awaited Europe’s input, warning that the private sector cannot resolve the problem.
Retail sales volumes posted a month-on-month increase of 1.3% during May, stoked by warm weather and the impact of the Royal Wedding. On an annualised basis, sales rose by 3.9%. Within the retailing sector, Dixons Carphone revealed a 24% drop in full-year pre-tax profits, Majestic Wine issued a profit warning, and discount retailer Poundworld went into administration. Department stores are under pressure: House of Fraser announced a series of store closures; gloomy news came from John Lewis and, following profit warnings in January and April, Debenhams issued yet another warning in June. On a more encouraging note, supermarket retailer Tesco reported sales growth for a tenth consecutive quarter during the month, and the company confirmed that its growth plans were “on track”. Over June as a whole, the FTSE 100 Index fell by 0.5% and the FTSE 250 Index declined by 0.1%.
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