Post-Brexit boost continues for UK economy as output strengthens Britain’s economy continued to enjoy a post-Brexit boost as the latest data showed stronger-than-expected industrial and manufacturing output in December, while the country’s trade balance narrowed. Industrial production rose 1.1 per cent month-on-month in December, close to double the rate expected, while manufacturing was up 2.1 per cent, giving an annual growth rate of 4.4 per cent. – The Times (£) Some economists have suggested a lower exchange rate will help to rebalance the economy, which they say is overly dominated by debt-fuelled consumption, the financial services sector and activity in London. Others maintain that any rebalancing will mean shrinking the overall size of the economy and squeezing consumer spending by making imports more expensive. Services make up about 80 per cent of the UK economy, while manufacturing accounts for only about 10 per cent. – FT The ONS estimates overall GDP grew 0.6% in the final quarter of 2016, matching the pace in the previous two quarters and suggesting the economy remained resilient to any uncertainty sparked by June’s vote to leave the EU… “We all thought the BoE were mad when they came out with a 2% growth forecast for this year. They may come out of this looking very smart,” said Clarke. – Guardian Britain’s manufacturing boom is now underway – Ross Clark for The Spectator Labour Brexit rebels escape punishment over Article 50 vote All 52 of the party’s MPs who voted against beginning the Brexit process – including 14 frontbenchers – will instead receive a formal warning about their future conduct from Labour bosses. The sanction was thrashed out in a meeting between Mr Corbyn and chief whip Nick Brown this afternoon. – PoliticsHome Convention dictates that members of the leader’s shadow team should resign or be sacked if they defy such an order. Some did resign, including shadow business secretary Clive Lewis, who was replaced by Rebecca Long-Bailey. But, after a meeting between Mr Corbyn and his chief whip Nick Brown, the remaining rebels will receive only a letter insisting that they must “comply with the whip” in the future. – BBC But the scale of the rebellion raised questions about whether the party has become ungovernable in the wake of the referendum result. Backbencher Chris Leslie, who refused to back the bill, said: “Collective unity, especially among the ‘payroll’ vote, ought to be a trait for any putative government-in-waiting. In a parliamentary system, the team is everything”. – Guardian Secret plan to tie Britain to EU after Brexit is being kept ‘under the radar’ Ministers have provoked fury for trying to put through a treaty “under the radar” which will keep Britain tied to the EU after Brexit. An early day motion (EDM) will today be put down by Ukip MP Douglas Carswell objecting to the Unitary Patent Court Agreement (UPCA). The deal, which ministers have tried to avoid having a vote on, means that Britain will still be subject to the European Court of Justice (ECJ) after Brexit and mean we are still tied in with single market rules despite promises by Theresa May that we will completely leave. – Daily Express Brexit transitional deal will lock UK into EU court, says Verhofstadt Britain will remain under the jurisdiction of the European court of justice for years to come if it seeks a transition deal to cushion its withdrawal from the EU, the chief negotiator for the European parliament has said. In the clearest sign to date that Britain is on a collision course with Brussels over the court, Guy Verhofstadt said European negotiators were primed to push back against Theresa May’s promises to remove the UK from the writ of European judges as soon as Britain leaves the EU in 2019. – The Guardian Brexit leaks could put journalists in prison Journalists who obtain leaked official material could be locked up under proposals drawn up for the government. Disclosing contents of Brexit documents deemed harmful to the UK’s economic wellbeing could land journalists in jail under an extraordinary proposal requested by the Cabinet Office and unveiled by the Law Commission… According to the commission, the proposed “redrafted offence” of espionage would “be capable of being committed by someone who not only communicates information, but also by someone who obtains or gathers it”. – The Times (£) Brexit-backing MPs plot their attacks on WhatsApp They are the most powerful opposition force in British politics, but even the denizens of Westminster would not recognise the group by its official name. They have more influence than Her Majesty’s official opposition, five times more MPs than the Lib Dems and a sense of discipline that puts the SNP to shame. The most aggressive and successful political cadre in Britain today is run by a nucleus of Brexit-supporting Tory MPs from the traditional right who for more than a decade were derided by David Cameron. – The Times (£) Whatsapp group ‘directing Government policy on EU exit’ – Daily Express Brexit ‘squeeze’ on living standards will be ‘offset’ by rising wages, predicts economist Gerard Lyons, a co-founder of Economists for Brexit, said that post-referendum economy was in “good shape” and said a recent rise in wages indicated the ability to deal with inflation. He said a rise in product prices was not inevitable but said leaving the EU was a “dynamic process”. Mr Lyons told Express.co.uk: “It’s not clear whether there will be a drop in living standards, there will be some squeeze maybe, but it’s a dynamic process. Let’s remember that the UK economy is in relatively good shape, the job market has been very strong.” – Daily Express Cameron’s own ‘business tsars’ say UK must be positive post-Brexit Michelle Mone has suggested an entrepreneurial spirit is needed to progress with Brexit. The entrepreneur, who founded the successful women’s lingerie brand Ultimo, said Brits had to be “positive” and “go for it”. Dismissing currency fluctuations and economic uncertainties, the Baroness said there was no point having an attitude of “doom and gloom” as the UK faces up to new global challenges. Dishing out advice on Brexit and business on CNBC, she said: “It’s very challenging but everything in life is challenging. If we all sit back and doom and gloom, where would we get to? – Daily Express Mark Fox: The easy bit of Brexit is over – now comes the hard part The debates were scrappy and ill-tempered. Remainers have been cowed by the referendum result. Some Brexiteers seemingly cannot absorb the fact their side won and bang on relentlessly. More grace and elegance would be welcome and both sides need to catch-up with the fact that the debate at Westminster now lags behind what is going on outside. Businesses, voluntary groups, society as a whole understands that Brexit is now a fact, a process and not an argument. Politicians and much of the national media need to catch-up. – Mark Fox for Reaction Matthew Parris: How the winds of Brexit could shipwreck May Which way will the wind blow? One reason we get the future wrong is the same reason we are often baffled by the past. We forget that invisible agent, the climate of opinion. How will it feel (or how did it feel) at the time? Instead we play around with mechanistic forecasts or pulseless reconstructions of events but ignore the prevailing political weather. Yet it’s against the climate of public sentiment — fears, fads, anxieties, resentment, trust and suspicion — that judgments are made, decisions taken. In politics the wind can be very compelling. – Matthew Parris for The Times (£) Richard Whitman: How devolution makes Brexit even more complicated When the UK government published its white paper outlining its plan for Brexit, it dedicated a chapter to “strengthening the union”. This was an important reminder of the significant implications leaving the EU holds for the UK’s current devolved system of government. Brexit will not just affect the UK’s current devolution arrangements, it will also potentially impact on the nation’s external affairs in areas such as energy, the environment and international trade. So when the government vows to “deliver an outcome that works for the whole of the UK” after Brexit, it needs to consider the specific interests of Scotland, Wales and Northern Ireland. Each voted differently in the referendum and as the UK seeks to leave the EU, each will have its own interests. Brexit is truly a two-union issue. – Richard Whitman for The Conversation LISTEN – Excerpts from this week’s Legatum Institute Brexit trade briefing The UK has been a sleeping giant, but it has now woken up – New Zealand’s former chief trade negotiator, Crawford Falconer Brexit was a shock but no disaster – Mexico’s chief negotiator for NAFTA, Luis de la Calle I voted Remain but Brexit can still be a big success – Former trade negotiation in Asia, Razeen Sally Brexit news in brief Nick Clegg mocks ‘nutty Brexiteers’ in EU rant – Daily Express EU foreign affairs chief Federica Mogherini asks US not to ‘interfere’ in European politics – The Independent Anger after leak shows steel industry is ‘low priority’ in Brexit talks – City A.M.