UK Data For June beats analysts forecasts
Good morning everyone,
Following the manufacturing and construction PMI's earlier this week, today’s UK focus will be on the services sector data. The other readings for June have provided strong evidence that the near-term growth outlook remains resilient. Both the manufacturing and construction indices showed improvements over May. However, as services account for the bulk of UK GDP, today’s out-turn is by far the most important of the three. The data was released at 9:30am and for the 3rd day in a row beat analysts forecast. Sterling exchange rates are staging bit of a recovery against all currencies.
Prime Minister Theresa May is facing a fresh showdown with her cabinet over plans to keep the U.K. closely tied to European Union rules for trading goods after Brexit, people familiar with the matter said. May’s senior pro-Brexit colleagues want her to explain more clearly how a new proposal for the U.K.’s future customs regime will work, as some fear it could keep the country chained to the EU’s tariff regime forever, the people said.
The premier aims to have the plans agreed at a key meeting of her cabinet on Friday. But it’s not yet clear that her feuding ministers will unite behind her approach.
Friday’s all-day cabinet meeting at May’s “Chequers” country house is seen as critical to moving Brexit negotiations forward. Talks with the EU in Brussels have stalled because the European side say they still don’t know enough detail about what the U.K. wants. The most difficult issue for May to finalize is what future customs regime the U.K. will try to agree to with the EU. Two previous proposals split her cabinet so she’s produced a third option that she now wants ministers to back. Two officials briefed on her latest customs plan say it’s complicated and requires careful further explanation.
Irish Foreign Minister Simon Coveney says he’s having “important Brexit meetings” with four U.K. ministers on Wednesday. Meanwhile, May will face her usual Wednesday question session in Parliament.