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Brexit news: Bank of England predicts post-transition hit to UK economy as deadline looms in EU trade talks

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Peter Stubley,Zoe Tidman
Thursday 05 November 2020 21:19 GMT
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The Bank of England has said it would pump £150bn into the UK economy and warned that even with a trade deal the lack of preparedness for Brexit would cut 1 per cent from GDP in the first quarter of 2021.

Its Monetary Policy Committee (MPC) based its assessment on the UK striking a Canada-style free trade deal, the prime minister's preferred outcome in the talks with the EU.

With the clock running down before the UK leaves the single market and customs union at the end of the year, significant gaps remained between the two sides in post-Brexit trade negotiations.

The EU’s chief negotiator Michel Barnier said there were still "very serious divergences" after two weeks of intensive Brexit discussions broke up without agreement on Wednesday evening. His UK counterpart David Frost said that they were still working to “find solutions that fully respect UK sovereignty.”

Talks were set to resume on Sunday but major sticking points remained on the “level playing field” regulations, fisheries and a dispute-settling mechanism.

Away from Brexit, Boris Johnson also came under fire from former cabinet minister Rory Stewart, who branded the prime minister an “amoral character” and “the most accomplished liar in public life”.

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Defamation laws in Scotland

Over in Scotland, MSPs have said new defamation laws could shift the balance towards greater freedom of speech while protecting reputations from serious damage.

Holyrood unanimously backed the general principles of the Defamation and Malicious Publication (Scotland) Bill.

Introducing the Bill at stage one, community safety minister Ash Denham said she does not believe the existing defamation law "appropriately balances protection of reputation and freedom of expression".

Under the proposed legislation, public bodies would be prohibited from suing for defamation, she explained.

PA

Zoe Tidman5 November 2020 18:30
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Bank of England

Two key things have come out of the Bank of England today:

1. Money printing

The Bank has announced it will pump an additional £150bn into the economy as its outlook worsens. 

Its Monetary Policy Committee voted unanimously in favour of the additional money printing. 

Full story here:

Bank of England to spend another £150bn on money printing

The Bank’s Monetary Policy Committee voted unanimously in favour of the additional money printing

2. Brexit

 The Bank of England has forecast a one per cent hit to the economy in early 2021 as a result of the end of the Brexit transition period - even if there is a deal with the European Union.

The Bank’s Monetary Policy Committee (MPC) based its assessment on the UK striking a Canada-style free trade deal, which is Boris Johnson’s preferred outcome in the talks with the EU.

"The expected reduction in exports, and the impact on domestic supply chains, reduces projected GDP directly by around 1 per cent in 2021 Q1," a report said.

Additional reporting by PA

Zoe Tidman5 November 2020 18:10
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‘Bonkers’ no-deal Brexit plans, Road Haulage Association says

In response to plans for movement of HGVs across borders after a no-deal Brexit being called "bonkers", a UK Government said ministers are seeking a free trade agreement which would allow liberalised haulage arrangements to continue.

However, plans are being stepped up in case a deal is not reached.

They said: "We are optimistic that an agreement can be reached that will continue to enable the substantial flow of international haulage, which is so important to businesses and consumers on both sides, and have always been clear that we would not intend to rely solely on ECMT permits."

PA

Zoe Tidman5 November 2020 17:31
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‘Too many difficulties’

To go back to Brexit, here’s a reminder of where talks are at - according to the EU’s chief negotiator:

EU: Brexit trade talks still face 'too many difficulties'

With a deadline closing in quickly, the European Union’s chief negotiator in trade talks with Britain says that talks between both sides on even a rudimentary deal still faced too many challenges to yield a result anytime soon

Zoe Tidman5 November 2020 17:18
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You can watch the press conference here:

Zoe Tidman5 November 2020 17:10
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Boris Johnson is expected to start a press conference shortly - his first since announcing the new lockdown for England. 

He will be flanked by NHS chief executive Sir Simon Stevens.

Zoe Tidman5 November 2020 17:04
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Refusal to let MPs vote by Zoom is unfair, says Labour

Two classes of MPs have been created by the Government's refusal to allow contributions to Commons debates via Zoom, Labour has claimed.

Shadow Commons leader Valerie Vaz pressed for the return of remote voting before warning of the difficulties faced by those who are being "careful and responsible" by not attending the chamber.

MPs can contribute via Zoom to oral questions, urgent questions and ministerial statements but not debates, including on legislation.

Ms Vaz said: "Effectively, I don't know what it is about this government but they are obsessed with tiers - we've got two tiers of honourable members, or you could say two classes of honourable members, which is not right and not fair."

Proxy voting has been extended to all MPs to try to ease numbers in the division lobbies, but virtual voting was dropped by the government after it was briefly used earlier this year.

MP numbers in the Commons have been limited to 50, while some are shielding at home for their own protection and the protection of others.

Commons Leader Jacob Rees-Mogg replied to Ms Vaz: "It is so important that we are here to do our job, that we're here to debate, to challenge.

"(Ms Vaz) says there are some members who can't be here for debate - and I recognise that and I sympathise with them, but they are debates, that is the point.

"We have seen how many times somebody comes on to complain that they can't come here and the connection goes down.

"We have seen in the House of Lords remote voting fail so business doesn't happen."

Peter Stubley5 November 2020 16:43
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Sturgeon rejects calls to reveal legal advice in Salmond case

Nicola Sturgeon has said she would be "blatantly breaching" the ministerial code if she released legal advice the Scottish government received during a the Alex Salmond case.

After the Scottish parliament voted for the advice to be released on Wednesday, Deputy First Minister John Swinney said they will consider the issue.

At first minister's questions today, Tory MSP Margaret Mitchell called on the first minister to confirm if the Scottish government will comply with the result of the vote and when the documents will be made available.

Ms Sturgeon responded: "If I was to do what Margaret Mitchell has asked me to do there I would be blatantly breaching the ministerial code - perhaps that is what Margaret Mitchell wants me to do."

Earlier, it was revealed Scotland's top prosecutor has been asked to release any "relevant" material held by the Crown Office to MSPs investigating the Scottish government's handling of harassment complaints against Alex Salmond.

Mr Salmond was acquitted of 13 charges of sexual assault, attempted rape and indecent assault at the high court in Edinburgh in March and denies all the allegations made against him.

The legal battle that followed saw Mr Salmond win £500,000 in legal fees when the Court of Session in Edinburgh ruled a Scottish government investigation into his conduct was unlawful.

A Scottish parliament inquiry was launched and began hearing evidence into how the Scottish government dealt with the allegations and lost the judicial review.

Peter Stubley5 November 2020 16:30
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TikTok denies helping China spy on Uighurs

MPs on the House of Commons business committee, which is investigating the role of industry in China’s persecution of Uighur Muslims, has been questioning executives from social media giant Tiktok and other firms.

TikTok denied allegations that its parent company ByteDance is supplying the China's authoritarian state with surveillance equipment, while clothing retailer Boohoo said that its suppliers had confirmed they had no links to the Xinjiang region and the use of forced labour.

Peter Stubley5 November 2020 16:11
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Brexit hit to UK economy hit predicted in 2021

The Bank of England has forecast a 1 per cent hit to the economy in early 2021 as a result of the end of the Brexit transition period - even if there is a deal with the European Union.

Governor Andrew Bailey said: "Recent evidence from the Bank's agents and a range of business surveys and intelligence suggests that while some businesses feel prepared for the change in trading arrangements, others - particularly smaller firms - do not feel fully ready, with Covid having hampered some preparations.

"Therefore in the central case in our November projections, adjustment by businesses to the new arrangements is assumed to lead to a further, temporary, effect on trade in the near term.

"These additional effects on trade are assumed to be temporary and to unwind over the course of six months, as businesses adjust."

Peter Stubley5 November 2020 15:50

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