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May’s Brexit deal, no-deal or delay? British PM offers lawmakers a choice By Reuters

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© Reuters. Britain’s Secretary of State for International Trade Liam Fox is seen outside of Downing Street in London

By William James, Kylie MacLellan and Elizabeth Piper

LONDON (Reuters) – Prime Minister Theresa May on Tuesday offered lawmakers the chance to vote in two weeks for a potentially disorderly no-deal Brexit or to delay Britain’s exit from the European Union if her attempt to ratify a divorce agreement fails.

Opening up the possibility of a delay and removing the immediate threat of a no-deal exit on March 29 marks one of the biggest turning points in the United Kingdom’s labyrinthine Brexit crisis since the 2016 referendum vote to leave the EU.

In a move which pushes back the Brexit cliff edge by three months to the end of June, May announced she was to give the lawmakers two votes on March 13-14 if she failed to get a deal approved by March 12.

The government would allow a vote on March 13 at the latest asking whether lawmakers supported leaving without a deal. If they rejected such an option, on March 14 they would vote on a “short, limited extension” Brexit delay.

“The United Kingdom will only leave without a deal on March 29 if there is explicit consent in the House for that outcome,” May said, though she was clear that the British government was not removing the ultimate threat of a no-deal Brexit.

“An extension cannot take no deal off the table,” May said. “The only way to do that is to revoke Article 50, which I shall not do, or agree a deal.”

May said any extension, not beyond the end of June, would almost certainly have to be a one off and that her government must honour the decision to leave the EU because the credibility of British democracy was at stake.

Earlier, The Sun and Daily Mail newspapers reported that May would formally rule out a no-deal Brexit. Reuters reported on Monday that May’s government was looking at different options, including a possible delay.

Sterling, which has lost about 20 cents against the dollar since the 2016 Brexit referendum, rallied 1.4 percent to $1.3284, the highest since September 2018, and it also rallied strongly against the euro.

“She seems to be giving us a date for a new cliff edge – the end of June,” veteran pro-EU Conservative lawmaker Kenneth Clarke said of May’s statement.

NEW CLIFF EDGE?

The EU would be ready to approve a short Brexit delay if Britain need more time to ensure parliamentary ratification of their divorce agreement, three EU officials said.

After parliament voted 432-202 against her divorce deal in January, May is trying to negotiate changes to the exit deal she agreed with the EU last year and had promised to bring it back for approval in parliament by March 12 at the latest.

The ultimate outcome remains unclear, with scenarios ranging from a last-minute deal to another referendum that May has warned would reopen the divisions of the 2016 referendum campaign or even scupper Brexit.

May’s decision to give lawmakers more say over the outcome was an attempt to see off a rebellion by lawmakers and ministers in her own party who had warned they could vote on Wednesday with opposition parties to grab control of Brexit.

After May’s statement, lawmakers said there would not now be a vote on Wednesday on the plan for parliament to take control if ministers confirmed May’s pledges.

A delay would increase the chances of a reversal of Brexit, especially as the opposition Labour Party is tilting towards supporting another referendum.

Jacob Rees-Mogg, a leading Brexit-supporting lawmaker in May’s Conservative Party, expressed concern: “If it’s being delayed… as a plot to stop Brexit altogether, then I think that would be the most grievous error that politicians could commit.”

Both of Britain’s main parties are under intense pressure to change course on Brexit: both are deeply divided though both are officially committed to implementing Brexit.

REFERENDUM

Opposition Labour leader Jeremy Corbyn said on Tuesday that even if May got her Brexit deal approved by parliament then it should be put to a “confirmatory” public vote.

“The prime minister’s botched deal provides no certainty or guarantees for the future,” he said, accusing May of running down the clock in a “grotesquely reckless” way.

But the tilt towards another referendum raises problems for Labour, many of whose traditional voters backed Brexit.

The 2016 referendum, in which 17.4 million voters backed leaving and 16.1 million backed staying, showed a country divided about much more than the EU, and has fueled soul-searching about everything from secession and immigration to capitalism and modern British identity.

The crisis has left allies and investors puzzled by a country that was for decades touted as a confident pillar of Western economic and political stability.





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IMF endorses Japan PM Suga’s reform agenda, urges BOJ to review inflation goal By Reuters

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© Reuters. Japanese PM Suga walks past the Indonesian national flag as he arrives for a press conference in Jakarta

By Leika Kihara

TOKYO (Reuters) – The International Monetary Fund gave a thumbs-up on Wednesday to plans by new Japanese Prime Minister Yoshihide Suga to maintain the thrust of his predecessor’s “Abenomics” stimulus programmes, while pushing through reforms to revitalise the economy.

Odd Per Brekk, deputy director of the IMF’s Asia and Pacific department, also urged the Bank of Japan (BOJ) to consider reviewing its 2% inflation target to make it more flexible — repeating a recommendation made earlier this year.

“Such a review would provide the BOJ with an opportunity both to reconfirm its commitment to the target and to increase policy flexibility as needed,” he told Reuters in a written interview.

In succeeding Shinzo Abe as prime minister last month, Suga pledged to maintain the first two “arrows” of Abenomics – huge fiscal and monetary stimulus measures to prop up growth.

He also vowed to pursue a re-modeled version of structural reforms, such as steps to boost smaller firms’ productivity, promote digitalisation and consolidate regional banks.

“Giving renewed momentum to the ‘third arrow’ of structural reform would help in the recovery and in putting the economy on a longer-term growth path,” Brekk said.

“In this regard, reforms to promote the digital economy, revive regional economies, and deal with regional bank issues should be given high priority,” he said.

Labour market reforms, such as opening up more career opportunities for women and encouraging more telework, must also remain a priority, Brekk said.

Japan’s economy suffered its biggest postwar slump in the second quarter as the coronavirus pandemic slammed domestic and global demand, and analysts expect any rebound to be modest as uncertainty over the outlook weighs on consumption and capital spending.

FLEXIBLE TARGET NEEDED

The economy was already in recession before the health crisis due to the blow from last year’s sales tax hike. Regional banks are reeling from sluggish credit demand, a rapidly ageing population and narrowing margins from years of ultra-low interest rates.

With high uncertainty over the economic outlook, the BOJ should avoid a premature withdrawal of stimulus and wait until a recovery takes hold, Brekk said.

It could take additional steps if needed, such as an expansion of its special lending programmes, a cut in longer-term yield targets and an increase in purchases of exchange-traded funds, he said.

In the longer run, the BOJ should consider a review of its price target and policy framework to allow itself more room to address financial system risks, Brekk said.

Under yield curve control (YCC), the BOJ guides short-term rates at -0.1% and 10-year bond yields around zero as part of efforts to achieve its elusive 2% inflation target.

Years of heavy money printing and the adoption of YCC, however, have failed to fire up inflation, drawing criticism that the policies were doing more harm than good by hurting commercial banks and discouraging them from boosting lending.

Brekk’s comments followed those in a staff report in February, in which the global lender urged the BOJ to re-define its inflation target as a long-term goal with room for some allowances.

It said this would give the central bank more flexibility in whittling down stimulus to ease the pain on financial institutions.





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U.S. set to announce legal action on opioid maker By Reuters

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© Reuters. Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

By Doina Chiacu and Susan Heavey

WASHINGTON (Reuters) – The U.S. Department of Justice on Wednesday will announce legal action involving an opioid manufacturer, the department said in a statement as officials have sought to stem the decades-long public health crisis involving painkiller addiction.

U.S. officials will “announce the results of the global resolution of criminal and civil investigations with an opioid manufacturer,” at a news conference scheduled for 11 a.m. (1500 GMT), it said.

The department did not identify the company involved.

But U.S. officials have been seeking to negotiate a settlement with Purdue Pharma LP, maker of the addictive pain drug OxyContin, and members of the wealthy Sackler family that own the drugmaker.

Painkiller addiction has claimed the lives of hundreds of thousands of people in the United States since 1999 while communities have sought to grapple with the financial and societal costs of the overdose crisis.

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Fed’s Bullard says U.S. can wait on fiscal aid, businesses adapting By Reuters

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© Reuters. FILE PHOTO: St. Louis Fed President James Bullard speaks about the U.S. economy during an interview in New York

(Reuters) – St. Louis Federal Reserve Bank President James Bullard on Wednesday repeated his view that U.S. businesses are largely adapting to life amid COVID-19 and the U.S. economy is on track to better-than-trend growth even without further fiscal stimulus.

“In terms of the aggregate resources it seems like we should have enough” fiscal aid to bolster growth until the first quarter of next year, when any further need could be reassessed, Bullard said at the Federal Home Loan Bank of Des Moines Leadership Summit.

Per-day fatalities per-million population in the coronavirus pandemic are down in the United States from the peak in the spring, he said, adding he does not expect a resurgence, or a second wave, by that metric.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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