2. Weekly Newsletter
On Christmas Eve, the United Kingdom successfully reached an agreement with the European Union on its future cooperation. The details of this agreement between Europe’s two largest economies cover a wide range of topics but offers little to the UK’s most valuable export: financial services. In the over 1,200 pages of the UK-EU Trade and Cooperation Agreement (TCA) it was even noted that the phrase ‘financial services’ was mentioned just six times compared to the word ‘fish’ featuring 16 times. Plus, on the first day of post-Brexit trading an approximate £6bn of shares were bought/sold on the continent rather than London. However, the Chancellor (Sunak) revealed that the Treasury would look to “play a role” in giving the financial services a boost and has hinted at loosening regulations.
Some of the key features of the UK-EU Trade and Cooperation Agreement include:
- The EU agreed to cut fishing in UK waters by 25% and after five-and-a-half years this will be up for review.
- The ‘level playing field’ was mostly achieved as the UK has committed to maintaining many standards but none of these need to remain identical in the future.
- Tariffs will now also be available to both sides to rebalance any chosen sector.
- Great Britain will not be fully subject to the European Court of Justice.
- A visa will now be required for travellers between the two if staying for more than 90 days in a 180-day period.
- UK data rules will now be similar, rather than the same, to the EU.
- There will be different product standards between the UK and the EU which may require costly checks
- The UK will lose automatic access to a variety of EU security databases (e.g. criminal records, etc.)
The UK now depends upon it’s own trade deals and has secured a large number of agreements around the world- including Switzerland, South Korea, Japan and Canada. However, the Chancellor started this week off declaring the UK economy will “get worse before it gets better” as a result of the global pandemic. A list ,compiled by The Telegraph, of major companies who have cut jobs since the start of COVID restrictions captures the widespread damage caused to the British domestic economy. Unemployment figures in the UK have remained low over the last decade and currently sit at 4.9%– representing 1.69m people.
The UK Government’s economic watchdog anticipates unemployment to reach a peak of 7.5% (2.6m) by the middle of 2021 which resembles the current rate in Sweden at the moment. Undoubtedly, the Government’s Furlough Scheme has helped limit unemployment and kept the economy (including many businesses) afloat during this period.
Confirmed COVID cases and deaths in the UK are high in comparison to the rest of the world. Nationally, 1 in 50 people has the virus and this increases to 1 in 30 for London. There have now been more than 82,000 COVID deaths as a result of the over 3.1m cases; however, 2.9m people have now been vaccinated and PM Johnson has set the very ambitious target of vaccinating all 14m allocated in the ‘top priority group’ by the middle of February. The British media has praised the national vaccine rollout’s efficiency in comparison to many other countries.
PM Johnson introduced a third national lockdown on the 4th of January which is now forecasted to extend into March– with pubs closed until at least May. This strict measure also came with the news that UK school exams were to be cancelled, over 100,000 people would contract COVID in one day, and the NHS was at risk of being overwhelmed. In the long term the UK Health Secretary, Hancock, has said that every adult in the country will be offered a vaccine by the autumn as daily vaccinations currently exceed 200,000 per day.