David Davis and Michel Barnier have outlined their early priorities as Brexit talks begin in Brussels.
The UK Brexit secretary says he is in a “positive and constructive” frame of mind while the EU’s chief negotiator says he is focused on the rights of EU citizens and the impact on the Irish border.
They were speaking ahead of formal Brexit negotiations beginning.
The EU’s chief negotiator said there would be “substantial” consequences from Brexit after the first round of talks with the UK.
Michel Barnier said he was “not in the frame of mind to make concessions or ask for concessions”.
UK Brexit Secretary David Davis said talks got off to a “promising start”.
The UK appears to have conceded to the EU’s preferred order for the talks which will mean trade negotiations do not begin immediately.
Mr Davis and Mr Barnier gave a joint press conference after day one of the talks in Brussels.
The initial focus will be on expat rights, a financial settlement and “other separation issues”.
Discussions aimed at preserving the Good Friday Agreement and common travel area in Ireland will also begin, although Mr Davis suggested these issues may not be settled until the end of the process, when the UK’s trade relationship with the EU is settled.
The UK had wanted talks on its future relationship with the EU to be considered from the outset, but Mr Barnier said this would only happen once the European Council decided “sufficient progress has been made” on the other issues.
Mr Davis – who had predicted this would be the “row of the summer” – denied suggestions the agreed timetable showed Britain’s “weakness” and insisted it was “completely consistent” with the government’s aim of parallel trade and exit talks.
“It’s not when it starts it’s how it finishes that matters,” he said.
Asked whether he had made any concessions to the UK in return, Mr Barnier said the UK had decided to leave the EU – not the other way around, and each side had to “assume our responsibility and the consequences of our decisions”.
“I am not in a frame of mind to make concessions, or ask for concessions,” he said.
“It’s not about punishment, it is not about revenge.
“Basically, we are implementing the decision taken by the United Kingdom to leave the European Union, and unravel 43 years of patiently-built relations.
“I will do all I can to put emotion to one side and stick to the facts, the figures, and the legal basis, and work with the United Kingdom to find an agreement in that frame of mind.”
More information at: www.bbc.co.uk
Pressures from rising prices and political uncertainty see drop in spending across clothing, household goods, food and transport.
Squeezed British households have cut back their spending for the first time in almost four years, according to figures that underscore the pressures from rising prices and political uncertainty.
Visa, the credit and debit card processing business, said its vast database of spending patterns shows there was a drop in spending across a broad range of categories last month, including clothing, household goods, food and transport.
That chimes with recent signs the UK economy is struggling to eke out growth this year and has fallen behind its peers as the effects of last summer’s Brexit vote start to bite.
Economists are worried that the inconclusive result of last week’s snap general election will add to the mood of uncertainty among consumers and businesses alike. That will compound the pressures from the pound’s sharp drop since the EU referendum, which has pushed up the cost of UK imports and stoked inflation.
Official figures due this week are widely expected to confirm that workers suffered another drop in real pay in April as wage growth weakened further and failed to match rises in living costs. Separate figures for May are forecast to show inflation held at 2.7%, the highest for more than three years and well above a Bank of England target of 2%.
Despite that overshoot, the Bank’s policymakers meeting to set interest rates this week are likely to reaffirm that they are happy to tolerate higher inflation for now as they continue to keep borrowing costs low to shore up growth and employment.
The monetary policy committee will be one member short again this month after the resignation earlier this year of the Bank’s deputy governor, Charlotte Hogg, when it emerged she had breached the Bank’s code of conduct.
Economists polled by Reuters expect the depleted committee to vote seven to one to leave interest rates at the record low of 0.25%. Only Kristin Forbes, who leaves the MPC this month, is expected to continue voting for a rate rise to curb inflation. Her colleagues will likely emphasise the pressures on consumer spending.
The figures from Visa appear to vindicate their cautious approach. The payments company said spending dropped 0.8% year-on-year in May, the first decline since September 2013.
Spending on experiences such as eating out and cinema trips continued to rise, but at a softer pace in May, according to the Visa report, compiled by data company IHS Markit.
There was further evidence of consumer caution in shopper numbers for May. They showed a 1% drop in footfall, which measures people going into shops but not necessarily buying anything.
It was the first such drop since February, driven by a 2% fall in high street footfall and a 1.3% decline at shopping centres. Retail parks defied the broader trend, with a 1.5% rise, according to the figures from the British Retail Consortium and retail analysts Springboard.
“May was clearly a month of moderation for UK shoppers,” said Springboard’s Diane Wehrle.
She also noted signs in the footfall data – collected from electronic sensors around the country – that fewer people were staying on past 5pm to eat out after shopping trips, a further indication households had become more cautious.
Economists expect that the pressure on household finances will translate into a drop in retail sales volumes in official figures due to be released on Thursday. A Reuters poll points to a 0.8% drop in sales in May after a 2.3% jump in April when Easter holidays and warm weather appeared to buoy trade.
Beyond the retail sector there have been signs of a slowdown in other parts of the economy, with official figures last week showing output in the manufacturing and construction sectors missed expectations on the latest measures.
A survey from Lloyds bank on Monday will add to the mood of caution. It suggested most regions in England suffered a slowdown across manufacturing and services firms in May.
Business activity in England continued to grow, but the rate of expansion fell to a three-month low, according to the Lloyds regional purchasing managers’ index (PMI). Wales, by contrast, enjoyed a pick-up in business activity growth.
Gareth Oakley at Lloyds Banking Group highlighted that the survey’s price measures had come down from recent highs, easing some of the pressure on businesses.
More information at:www.theguardian.com
The European Union has revealed a draft law to give it the power to move the lucrative euro clearing business out of London and keep it in the EU after Britain leaves the Union in 2019.
London currently processes three-quarters of the trade in this financial sector, providing thousands of jobs.
But European Commission vice-president Valdis Dombrovskis said Brexit needed “certain adjustments to our rules”.
The law will decide if London will have the right to host the work post-Brexit.
London is currently the world leader for the clearing of all types of currency-denominated derivatives including the euro.
Clearing is the process by which a third party organisation acts as the middleman for both buyer and seller of financial contracts tied to the underlying value of a share, index, currency or bond.
Trillions of euros are handled through clearing houses every year, mostly through London.
In a statement, Mr Dombrovskis said: “As we face the departure of the largest EU financial centre, we need to make certain adjustments to our rules to ensure that our efforts remain on track.”
The financial industry has warned that forced “relocation” of the work would split markets, increase trading costs, weaken the euro and threaten the jobs associated with the clearing houses in London.
The proposal would split clearing houses into two tiers, determined by whether their operations are considered to be “systemically important”.
If they are not thought to be important, then they will carry on working under the structure of the European Market Infrastructure Regulation.
More important “tier two” institutions will have to meet extra requirements set by EU central banks, could face “on-site inspections” and will have to give “all relevant information” to the European Securities and Markets Authority.
Those requirements may not be enough for the clearing houses thought to be the most important, which would force their operations back inside the EU.
A move like that could affect the clearing house at the London Stock Exchange.
The proposals will now go before the European Parliament and the European Union Council.
The policy chairman at the City of London Corporation Catherine McGuinness said “fragmentation” of foreign exchange and interest rate trading could see firms’ costs increasing by “as much as 20%”.
She said the Corporation was also concerned that it could “increase systemic risk”.
“The UK is the only place that can guarantee financial stability with the lowest possible cost implications,” she added.
Meanwhile, the UK Treasury said: “How UK firms access EU markets, and vice versa, is a matter for the forthcoming exit negotiations.
“In the meantime we stand ready to engage constructively on this legislation.”
More Information at: www.bbc.co.uk
ONS data signals further decline in living standards for UK households as unemployment rate stays at 42-year low.
Britain’s pay squeeze has intensified after wages growth fell further behind inflation, according to the latest official data.
Regular pay growth, excluding bonuses, slowed to 1.7% year on year in the three months to April, from 1.8% previously.
It was much weaker than expected, with economists predicting 2% growth in pay.
With inflation running at 2.7% in April, the data from the Office for National Statistics signalled a further decline in living standards for UK households.
Philip Shaw, an economist at banking group Investec, said the gap between price rises and pay growth was likely to increase in the coming months. Inflation is expected to rise above 3%, after hitting a four-year high of 2.9% in May, as the drop in the value of the pound since the Brexit vote feeds through to higher shop prices.
“The erosion of real household income growth will set the tone for the economy as a whole as consumer spending slows in response,” Shaw said.
The UK unemployment rate was unchanged at a 42-year low of 4.6% in the three months to April, the ONS said.
More information at: www.theguardian.com
June 12, 2017, London. As part of the celebration of the Day of Russia in the SkyTeam business lounge of Heathrow Airport, a solemn event “The Russian Day Event” was held.
The event was organized by the Russian Trade Delegation in the United Kingdom in in cooperation with the OOO Standard (Nizhny Novgorod) with the support of the Rossotrudnichestvo in the UK.
During the day, more than 2,000 business lounge guests from different countries of the world were able to discover the high quality of various drinks from Russia and join the celebration.
The head of Heathrow’s business lounge, Gilein Burfield, in his speech congratulated the Russia and noted the high importance of holding this event to familiarize the international audience with Russian products.
Rosneft and BP have signed today an agreement on strategic cooperation in gas and a Memorandum of Understanding (MoU) in respect to the sale and purchase of natural gas in Europe. The documents were signed at the XXI St Petersburg International Economic Forum (SPIEF).
The two companies agreed to develop integrated cooperation in gas and aim to jointly implement gas projects in Russia and abroad focused on gas exploration and production, LNG production, supply and marketing.
Rosneft and BP also reconfirmed their mutual interest in cooperation in European gas marketing. According to the MoU, Rosneft and BP’s wholly-owned subsidiary BP Gas Marketing Limited will enter into a long-term sales and purchase agreement for the supply of natural gas produced by Rosneft in order to ensure delivery of additional Russian gas supplies to European markets starting from 2019. This MoU is another milestone in the development of strategic cooperation between Rosneft and BP.
“Rosneft already is the largest independent gas producer in Russia and intends to further increase production levels in the coming years,” Rosneft CEO Igor Sechin said. “Cooperation with BP would provide Rosneft with both a new efficient gas monetization channel and the conditions required for the development of a new resource base including hard to recover gas reserves.”
“BP is pleased to expand its ongoing relationship with Rosneft through this agreement,” president of BP Russia David Campbell added. “Shifting to gas is one of the pillars of BP’s strategy. It is important in order to meet the increasing demand for cleaner energy. Gas is a growing proportion of BP’s portfolio and by the middle of the next decade we expect around 60% of our production to be gas, compared with around 50% today.”
The parties agree that Russian state support for an effective gas supplies mechanism is key to the successful implementation of the MoU.
The participants of the St. Petersburg International Economic Forum (SPIEF) signed 475 agreements, worth around $32 billion, according to a statement by the Roscongress foundation.
The three-day forum that drew in prominent politicians and businesspeople from different countries concluded on 3 June 2017.
“This year, 475 investment agreements, memorandums and letters of intent have been signed, with their total worth amounting to 1,817.9 billion rubles [roughly $32 billion] (only the agreements not covered by commercial confidentiality are taken into account),” the statement said.
According to Roscongress, the largest among all of the deals included an agreement between German chemical company Linde Group and Russia’s TAIF on the building of a new ethylene production site in Russia (approximately $10.5 billion) and an agreement between Russia’s Rosatom and Nuclear Power Corporation of India Ltd on the building of power units for the Kudankulam Nuclear Power Plant in India (about $4.2 billion). In 2015, a total of 205 agreements were signed at the forum, in 2016, there were 356.
More information at: Sputnik www.sputniknews.com
The annual international exhibition of wine products The London Wine Fair was held in London on 22-24 May 2017. The Russian Trade Delegation in cooperation with The Russian-British Chamber of Commerce assisted the Russian Wine House «Abrau-Durso» in organizing the trade mission to the United Kingdom.
The London Wine Fair is one of the largest European events dedicated to wine production. This year more than 10 thousand wines from more than 40 countries were presented at the London Wine Fair.
The group of companies «Abrau-Durso» is a famous Russian producer of sparkling and still wines. The quality of the products was noted at the International Wine and Spirit Competition 2017, an authoritative international competition for wines and spirit, held annually since 1969 during The London Wine Fair. The wines of the «Abrau-Durso» won nine awards at once, including two silver and seven bronze medals.
The major event focusing on Russian-British trade and cooperation the RBCC Business Forum «Russo-British business- Dawn of a new age?» took place in London on the 25th of May 2017. The event was organized by the Russo-British Chamber of Commerce (RBCC) with the support from the Ministry of Economic Development of the Russian Federation, the Trade Delegation of the Russian Federation in the UK and the Russian Embassy in the UK.
This Forum comprised a series of keynote speeches, conversations and panel discussions, and Q&A sessions regarding company’s operations in Russia or in the UK. There also was ample time for networking and building contacts with the Russo-British community.
The Business Forum brought together over 200 delegates of leading Russian and British businesses. Among the key representatives who participated in panel discussions were: His Excellency Dr Alexander Yakovenko, Ambassador of the Russian Federation to the United Kingdom, Jonathan Brenton, Minister Counsellor – Prosperity, British Embassy Moscow, Dr Boris Abramov, UK Trade Representative for the Russian Federation, Charles Hendry, President of the Advisory Council, RBCC, Roger Munnings, Chairman, RBCC, President of the Novorossiysk Chamber of Commerce Igor Zharinov, President of the wine house “Abrau-Durso” Pavel Titov, Managing director of the company “SPLAT” Dina Ivanova.
International Retail & Development Director of SPAR International and a Member of the SPAR International Board David Moore presented a success story of SPAR in Russia.
Two Panel Discussions moderated by Management Board Representative, RBCC Russia Stuart Lawson and President of the Advisory Council RBCC Charles Hendry covered such topics as: Partnerships and trading opportunities between Russia and the UK; The changing face of energy and commodities; Protecting company – insurance in the context of UK-Russia relationships; How the UK is attractive for Russian companies and entrepreneurs; New industries for growth between Russia and Britain; Doing business in the age of digitalisation; The future of traditional commodities and renewable energies; Exporting/importing goods; The rise of the tech industry.
Among the panellists were:
Peter Charow, Vice President for Russia, BP
Rupert Gather, Executive Chairman, InvestUK
Peter Hambro, Chairman, Petropavlovsk PLC
Igor Zharinov, President, Novorossiysk Chamber of Commerce
Leonid Zubarev, Senior Partner, CMS Legal
Alina Bezuglova, Co-Founder, Rutech Ventures
Dr Sergei Grigoriev, Deputy CEO, PR & Communications Director, Siberian Coal Energy Company (SUEK)
Stuart Maclennan, Director, Cows & Co
Pavel Titov, Owner, Abrau-Durso
Guy Willner,Founder, IXcellerate
Overall the participants gave different assessments of the current situation and perspectives for the Russian-British bilateral economic relations. At the same time participants agreed that reduction of opportunities for bilateral collaboration caused by the sanctions had created the unique environment for international companies to invest and make business in Russia.
Quad 204 is the multi-billion-pound redevelopment of the Schiehallion and Loyal fields, located 175 kilometres west of the Shetland Islands
Schiehallion and the adjacent Loyal fields were first developed in the mid-1990s and have produced nearly 400 million barrels of oil since production started in 1998. After 15 years of operating in harsh conditions and producing nearly 400 million barrels of oil, the original Schiehallion floating, production, storage and offload (FPSO) vessel required replacement to enable continued production from the fields. Technological advances also increased understanding of the fields and BP saw the greater potential the Schiehallion Area holds.
With the fields’ redevelopment through the Quad 204 project, BP and co-venturers expect to unlock a further estimated 450 million barrels of resources, extending the life of the fields out to 2035 and beyond. Production from the project is expected to ramp up to a plateau level of 130,000 barrels per day.
The Quad 204 project has involved construction of a purpose-built FPSO, the Glen Lyon, which is expected to process 130,000 barrels of oil a day at peak production. The project has also seen a complete upgrade of the subsea infrastructure and the start of a major drilling campaign with up to 20 new wells planned.
Glen Lyon was constructed at the Hyundai Heavy Industries shipyard in Ulsan, South Korea. It left Asian waters in early December 2015 and, following a short stop in Norway, arrived on field West of Shetland in June 2016. This was quite a journey considering the FPSO does not have its own means of propulsion. Tugs were used to tow it, first, the 15,300 nautical miles from South Korea to Norway and then the 286 nautical miles to the West of Shetland.
Without the skills and expertise of the UK supply chain, delivery of the Quad 204 project would not have been possible. Rosyth-based Babcock fabricated 73 subsea structures for the project – one of the largest subsea fabrication orders placed in the UK. Other key UK contractors included Technip for the supply of flexible risers and offshore installation; Aker Subsea for subsea control systems and Amec Foster Wheeler for hook-up and commissioning support.
The Quad 204 project presents one of the most complex engineering challenges BP and its partners have ever undertaken.