Time for Cexit talks?
The UK-EU divorce negotiations hit a problem over the Irish border question (also, apparently, the European Court of Justice question). We still believe a deal will be done as the Irish DUP (which supports the minority UK government) is unlikely to favor another election at the moment.
The possibility of granting Northern Ireland special status in the European customs union has led to demands for a similar customs union status from London, Scotland and Wales. The risk is that more regions decide they want to stay and Canvey Island (a roughly 7 square mile island in the Thames) leaves the EU customs union on its own. Perhaps Cexit is an easier deal to do than Brexit?
The EU is getting excited about tax issues. A list of 11 countries that do not comply with transparency rules has been drawn up – including South Korea and the UAE. Separately, Ecofin meets today and will discuss whether US tax changes violate World Trade Organization rules. Tax, competitiveness and global capital flow is not going to go away as an issue.
The data calendar is clogged with service sector PMI opinion polls. These are not worth bothering with.