UK economy grew faster than previously thought in 2016 Q4 Britain ended 2016 growing more quickly than previously thought amid signs that factories and exports have enjoyed a resurgence since the vote to leave the European Union, according to official figures. In its first revision to GDP for the final quarter of last year, the Office for National Statistics upgraded growth from its initial 0.6 per cent estimate to 0.7 per cent, the fastest pace of expansion in a year, confounding the Treasury’s pre-referendum warning that a pro-Brexit vote would lead to recession. Exports rose by 4.1 per cent compared with the previous quarter and imports fell by 0.4 per cent, in a clear sign that the collapse in the pound has improved the competitiveness of UK trade. There was also strong growth in manufacturing of 1.2 per cent. – The Times (£) Confidence boost for exporters ahead of Article 50 trigger – British Chambers of Commerce Economy boom shows that the British people know best – Daily Express editorial Sir Ivan Rogers tells MPs that EU members will play ‘hardball’ with ‘British dosh’ European leaders will play “hardball” and demand “British dosh” in return for a free trade deal from the start of Brexit negotiations, the former UK ambassador to the EU has warned. Sir Ivan Rogers said the issue of Britain’s Brexit bill would be an issue from the start of negotiations and he predicted it would come to a head at a “gory” meeting of European leaders in autumn next year… However, he added that the loss of the British contribution to the EU would be significant and therefore could be used as a bargaining chip on both sides. – Sky News Brexit talks could get ‘gory, bitter and twisted’, says former ambassador – The Guardian It’s in the EU’s interests to make Brexit as difficult and expensive as possible – this is how they’ll do it – Andrew Grice for The Independent Secret talks underway to give Parliament a veto on any Brexit deal the PM brings back in bid to fend off court fight Secret talks are underway to allow MPs and peers a vote to authorise the eventual shape of Britain’s EU exit, even if it is a negotiations walk out without any deal. They were sparked by warnings from senior legal figures that Theresa May’s ultra-tight 137 word Article 50 bill is not enough to satisfy a Supreme Court ruling last month that only Parliament can sign the final exit terms. One Cabinet minister told The Sun yesterday: “At the end of the day, Parliament is sovereign. We have to take MPs with us on Brexit. If we don’t either they will force us, or the courts will. That is now becoming clear”. The Supreme Court’s former deputy president, Lord Hope, reinforced the legal warning when Lords began debating the bill on Monday. The senior ex-judge increased Downing Street’s alarm by warning ministers that “they cannot escape from the effect of the Miller decision when we reach the end of the negotiation”. – The Sun City of London steps up fight to retain euro clearing after expert warnings against “currency nationalism” High-profile regulators, politicians and financial experts have warned that any move by the European Union to force euro clearing out of London could have grave consequences for global economic stability. Sir Jon Cunliffe, the deputy governor of the Bank of England who supervises financial stability, hit out at “currency nationalism” on Wednesday… A Treasury spokesman said: “Any attempt to force clearing to be done in a place that is sub-optimal would have a cost and that cost would ultimately be borne by consumers.” Miles Cecil, chief executive of TheCityUK, said euro clearing is dominated by the City for a reason. “London has the scale, expertise and infrastructure to keep costs as low as possible,” he said… Anthony Belchambers, a director of the Financial Services Negotiation Forum, said the EU was at risk of reviving “fortress Europe” accusations, adding: “It’s in the broader interest of the EU to allow clearing to take place outside of the Eurozone.” – City A.M. Specialist UK regulator for ratings agencies needed to take over from Paris-based watchdog Esma after Brexit – FT (£) Mark Field MP: Maintaining London’s euro-clearing crown is vital to the EU as well as the UK Being able to continue euro-clearing operations is an important component of the future health of the City of London, for sure. But it is also vital to the health of the EU itself… Denying London the right to clear euros in a discriminatory action would need to be universally applied to other non-EU financial centres and could spark retaliatory measures. This risks undermining the euro as a reserve currency and could place extra costs on market participants at a time when fresh crisis looms for the currency. All of the EU politicians and financiers I have spoken to understand that this is a risk not worth taking. They express no desire to prevent euro-denominated trades from being cleared in London and indeed privately rail against the notion that such business might be forcibly moved to Paris. – Mark Field MP for City A.M. >Peter Leahy on BrexitCentral: The EU’s attempts to drive euro derivatives clearing out of London post-Brexit are doomed to fail ‘Experts’ must stay out of politics, says Bank of England deputy governor Central bankers, academics and civil servants must not wade into politics if they are to maintain credibility, according to the deputy governor of the Bank of England. Dame Minouche Shafik, who is in charge of markets and banking, said it was important for “experts” to display “humility” when they were wrong as well as “candour” about the limits of their expertise to secure the public’s trust… She said, “If experts cross that line, they undermine the credibility of their expertise and their accountability to their professional standards.” – Daily Telegraph Experts are vital, but so is scepticism and debate – take it from the Bank of England’s Minouche Shafik – Christian May for City A.M. Record number of EU migrants to UK expected in latest ONS data New official UK migration figures to be published on Thursday are expected to show that a record number of European migrants have come to work in Britain since the Brexit vote last June. Separate official figures are expected to show that the post-Brexit rush by European Union nationals in Britain to secure their right to remain by applying for residency certificates has left the Home Office with a mountain of nearly 100,000 “work in progress” applications… They are expected to show that annual net immigration remains above the 300,000 mark – three times the level of Theresa May’s target to reduce it below 100,000 for the 12 months to the end of September 2016. – The Guardian Four in ten European doctors working in Britain ‘considering leaving because of Brexit’, according to survey – The Independent Richard Tice: Britain will not shut its doors on the EU after Brexit, but it must not forget its workforce at home David Davis is right, the UK will not completely shut our doors to talent after we leave the EU, but the Government must be bold in seizing the opportunities presented by Brexit to match a sensible, managed immigration policy with a vision to grow and train a workforce that will serve Britain’s economy in the long-term. – Richard Tice for the Daily Telegraph (£) Scrap the utopian net migration target (among other things) to reconcile traditionalists and liberals on immigration – Ryan Shorthouse for City A.M. Instead of blaming immigration, we should make sure it works for everyone – Carolyn Fairbairn, CBI Director General for the Daily Telegraph (£) Labour drawing up plans to work with Theresa May over Brexit, leaked memo reveals Jeremy Corbyn’s most senior aide has urged the leadership to take a “constructive approach” that will risk the party “getting our hands dirty” by not voting against the Government, a leaked memo has revealed. The email was sent to Seumas Milne, the leadership’s head of strategy and communications, by the former Labour Chief Whip Rosie Winterton. The memo, which admits that Labour is not currently “facing up to what the detailed agreements should like like” after Brexit, followed a meeting of Mr Corbyn’s top team on Monday night. It warns that Labour “will have to acknowledge that immigration has caused friction in some areas.must not be “simply seen to be opposing everything the government does”. – Daily Telegraph Labour faces new civil war after plan to back up PM’s Brexit plans in parliament is exposed – The Sun Brussels faces fresh crisis over CETA as 100 French MPs take EU-Canada trade deal to court Left-wing representatives in Paris submitted a legal challenge to France’s highest constitutional authority arguing that CETA will severely erode the country’s sovereignty. In particular they argue that the highly controversial Inter State Dispute Settlement (ISDS) system, by which US corporations can sue European governments, is incompatible with French law… In an open letter the 106 National Assembly representative said CETA represented an unacceptable loss of sovereignty for the individual member states and went “beyond what they agreed upon in favour of the EU”. – Daily Express RT Howard: Emmanuel Macron’s tough talk to Britain rings hollow – France’s military needs us too much Visiting London yesterday, the French presidential candidate Emmanuel Macron voiced some harsh rhetoric about the relationship between his own country and a post-Brexit Britain. But his apparent threats should not be taken at face value… There is a fast- growing cooperation between Britain and France, and over the past few years the two countries have become more militarily intertwined than at any previous time since 1945… It is also another reminder of a truth about Brexit Britain: despite the threats and hostile rhetoric, Europe needs us at least as much as we need it; and we will still be in a position to exert leverage over the EU and its member states, although sometimes in more subtle, indirect ways than before. – RT Howard for the Daily Telegraph (£) Paris announces seven new skyscrapers as it steps up bid to lure London jobs – The Independent L’anti-Trump: can Emmanuel Macron live up to his hype? – Freddy Gray for The Spectator What does François Bayrou’s endorsement of Emmanuel Macron mean for the French presidential race? – Stephen Bush for the New Statesman Emmanuel Macron’s idyllic vision of France is a myth – Gavin Mortimer for The Spectator Coffee House Allister Heath: We must leave the EU quickly – it is falling apart faster than I thought We keep worrying about how Brexit will affect Britain. But the real question is how Brexit will debilitate Brussels, shift the balance of power and ideology on the continent, with smaller, more pro-market nations losing their British champion, and trigger a new dash to yet more unpopular centralising treaties, fuelling more range and anger. Yet the Eurocrats in Brussels and some Remainers in Britain keep on talking as if nothing has changed, as if the UK were leaving some powerful, eternal, economically successful superpower. The status quo is gone, forever, and what is left could be smashed further in just three months’ time. – Allister Heath for the Daily Telegraph (£) Scott Mann MP: Brexit is a great opportunity for British agriculture Our withdrawal from the EU presents a golden opportunity for the agricultural sector. We can create our own domestic agricultural policy which works for our British farmers as well as for our environment. Initially under the CAP, farmers were encouraged to intensify farming even as the butter mountains and wine lakes built up. This harmed our environment which can take decades to reverse, and although we do have initiatives in place to address that, such as the Agri-Environment Schemes, they have not properly helped the resurgence of wildlife… An independent Britain will inherit a strong farming sector which can still go from strength to strength. – Scott Mann MP for ConservativeHome Ken Worthy: Does the Single Market really boost exports? Between 1973 to 2012, nine non-members (China, Russia, Brazil, India, Turkey, Korea, Australia, Mexico and South Africa) increased their EU exports at rates varying from 11 per cent a year (China) to 5 per cent (South Africa). In the same period, Britain’s rate of export growth to the EU was 2.9 per cent, and average growth in exports to other members across the EU was 2.7 per cent. Only four of these non-members have FTAs with the EU; the others trade under WTO rules… The Single Market itself has given predominance to bureaucracy… As a result, the EU has held back the economic dynamism of its member states. – Ken Worthy for CapX Ayesha Hazarika: Will politicians listen to the Brexit message? We are not learning the lessons of the Brexit vote in the same way that we didn’t learn the lessons of the financial crash. Around 2008, politicians of all hues were boldly proclaiming “we must rebuild a society and economy that works for everyone – not just a privileged few at the top”. Sounds familiar? But that didn’t happen and we’re in danger of repeating that. – Ayesha Hazarika in The Scotsman Brexit comment in brief While Europe burns, Brussels scribbles – Florian Eder and Jacopo Barigazzi for Politico Theresa May’s new third way between globalism and nationalism – James Forsyth for The Spectator How Boris plans to turn Britain into a nation of queue-jumpers – Michael Deacon’s sketch for the Daily Telegraph (£) Brexit goes nuclear: The consequences of leaving Euratom – Enrico Nano and Simone Tagliapietra for Bruegel The Stoke by-election isn’t just a referendum on Brexit – Oliver Wiseman for CapX Both possible successors to Corbyn have electorally disastrous views on the EU – Matthew Ellery for ConservativeHome Who has more in common? Leave & Trump voters or Remain & Clinton voters? – Nigel Marriott’s blog Brexit news in brief Lib Dem leader Tim Farron tells Brussels not to push for second referendum – Daily Express Ex-EU boss Herman Van Rompuy sends Nicola Sturgeon warning over second Scottish independence referendum – Daily Express British tourists face US-style electronic visa scheme when travelling to EU after Brexit – The Independent Commission postpones new vision for Europe until December – EurActiv Dutch MPs set to force through EU-Ukraine deal voters rejected in referendum – Daily Express Brexit could help EU strike free trade deal with India, MEPs believe – The Guardian Britain ‘needs battle-hardened team’ for Brexit talks – The Times (£) Architect plans to build on post-Brexit opportunity – FT (£) Voting underway in crunch by-elections in Copeland and Stoke – BBC And finally…The Mirror picks up on Matthew Elliott’s account on BrexitCentral of a crucial pre-referendum meeting It was the campaign led by Tory millionaire Boris Johnson. Yet a crucial meeting of Vote Leave was held not in a lavish country club – but a south London Wetherspoon’s. The Brexiteers’ former boss has revealed a branch of the bargain pub giant played host to key talks that would define the style of the campaign. Matthew Elliott met cabinet minister Chris Grayling at the pub in December 2015 to “force David Cameron’s hand” and let him campaign for Brexit. – Daily Mirror