sign in sign up
<<
Home , Brexit, Didier Seeuws, Tim Barrow

Brexit: A Data Sheet for the EU-UK Negotiations 5 July 2017

1945 End of World War II 1. Expected Path of Negotiations* 2. Current State of the Parties 3. Key UK and EU negotiators 14 Other 2017 Q3–Q4 2018 2019 Q1 2019 Q2–Q4 UK 12 Liberal Democrat 650 Total Seats June 2017 April 2019 Four Possible Sec. State for 1950 639 Working Seats 35 1951 Treaty of creates coal Outcomes Exiting EU Expected Start of the Talks UK leaves the EU 262 Labour Sets EU’s direction & steel community David Davis Only 260 can vote European Heads of gov’ts. (2 deputies) UK Ambassador Commission President Orderly Brexit to EU Executive body 1957 creates Sir of EU. Proposes, Brexit task force UK-EU Soft Brexit economic community Trade implements Negotiations 325 For majority 10 Democratic Unionist Party Prime Minister legislation 1960 Long-Term European Withdrawal Transition UK and EU 317 Conservative Relationship 320 Working President Parliament Negotiations Arrangement Ratification Only 315 can vote Jean-Claude Junker Negotiations UK-RoW Majority Chancellor of Legislative body (1 speaker/1 deputy) Trade the excheq. Chief Negotiator President Negotiations Phillip Hammond Hard Brexit Antonio Tajani Cabinet Brexit negotiator 1970 PHASE 1 PHASE 2 PHASE 3 TRANSITION Various Source: House of Commons, YouGov Source: BBC 1973 Accession of , Extension and the United 4. Migration to the UK (Data for Dec) 5. Annual Change in Employment by Nationality UK EU Non-EU 10. Country Breakdown of Exports Kingdom Contingency Contingency Extension New Extension Source: ONS EU8 EU5 % % Talks Talks Talks Negotiations 21 RoW 10 Germany 3% 6% 1979 First direct elections Rest of 1980 to Parliament STATUS QUO 300 400K Asia 6% NL* 200 4% 6% Crash UK Non-EU China Ireland 1985 Greenland leaves 0 Negotiates 7% Bilateral Crash Brexit 100 Middle % Agreements East 18 % Rest of EU with RoW EU14 15 % -400K 3 1990 1992 (TEU) 0 US Switzerland creates the European Union Source: Research NO-DEAL EXIT 2006 2009 2012 2015 Source: ONS 2000 2005 2010 2015 Source: WTO and the

1995 Accession: 6. Trade flows between the EU, the US and the UK (USD bn) 7. Structure of Trade, by Country 8. Structure of Trade, by Product 9. Trade Dynamic 11. UK Exports to EU and Tariffs (EUR bn) (GBP bn) Austria, Finland, Sweden Selected exports that attract a high $1,699 Rest of EU $1,781 GOODS EXPORTS SERVICES EXPORTS Germany Finished Manufactures tariff under WTO trading Exports 300 Avg AV 2000 Duties Imports Non-EU 200 2002 Euro replaces 12 currencies Vehicles & parts 17,271M 5.8% $251.0 France Semi-Manufactures Non-EU 100 2004 10 more countries accede EU $231.4 EU Plastics 6,532M 6.0% to EU $370.3 0 2007 Bulgaria, Romania accede IMPORTS IMPORTS Food/Beverages/Tobacco 2000 2005 2010 2015 2000 2005 2010 2015 0 Chemicals 5,521M 5.4% $ 2010 6 $58.6

EXPORTS EXPORTS % 15 EU -100 EU Clothing 4,639M 11.5 7 Ireland Fuels $ 0 Non-EU 54.3 ,2 -200 63.7 $ 1 Aluminum 1,518M 6.4% $ 3 UK $ Spain Oil Non-EU -300 2016 UK votes ‘Leave’ 4 US Net Net Meat 1,471M 5.1% 17 Goods Goods -400 Prepared food M % 2019 Brexit Source: 2 Services Services GOODS IMPORTS SERVICES IMPORTS 1,437 9.2 2020 3 European Union, ,9 Source: Source: Barclays Research Source: WTO $ 1 -60 -40 -20 0 20 40 WTO -150 -100 -50 0 50 100 WTO Source: ONS Source: Bruegel Brexit: A Data Sheet for the EU-UK Negotiations 5 July 2017

12. The Legal Basis of Trade 14. 2017 GDP Forecasts 2017 Inflation Forecasts 15. Size of BoE Balance Sheet 23. Rate 24. Historical GBP Source: Consensus Economics Source: Bloomberg Source: Bank of Source: ONS, Barclays Research Self-employment Source: Barclays Research 14% RoW & Zero-hour contract 2.5 2.5 (GBP bn) 120 4 Unemployement rate 2.0 CCF Replacement 2.0 CCF Replacement 400 1% Potential Basis Basis 2 110 Index, % 21% Under 51 1.5 1.5 300 Jan Negotiation EU Consensus 0 1980 9% Existing Employment 100 1.0 1.0 (Monthly 200 -2 Consensus Survey) (excl. Self-employment 31% & Zero-hour contract) (Monthly EU 0.5 0.5 100 -4 90 Survey) PTAs 4% 0 0 0 -6 EEA+CU Source: Bruegel Apr 2016 Oct 16 Apr 17 Apr 2016 Oct 16 Apr 17 2010 2015 2017 1996 2000 2004 2008 2012 2016 1970 1990 2010

13. Future of UK-EU Trade: 16. Growth Outlook‡ Source: Barclays Research 17. UK credit card spending 25. Income Flows are a Key Driver of CA Fluctuations 26. Primary Income Declining (GBP bn) Source: Barclays Research, ONS † Source: Barclaycard Source: , Barclays Research Spectrum of Possibilities (pp contrib.) Govt consumption Fixed investment % 1.0 10 6.0 4 Change Free movement of goods, services, Real GDP Barclays GDP in stocks 5 people and capital. Low non tariff (% y/y) growth forecasts barriers. Financial passporting. 4.0% 0.8 2 0 Norway | EEA Access and restrictions of single -5 0 2.0% market as EEA member, including 0.6 four pillars. Outside customs union. Private Share Explained by Trade Balance -10 Implements EU laws and directives consumption Net trade balance -2 0 and pays into EU budget but does not Share Explained by 2014 2015 2016 2017 2018 2013 2015 2017 0.4 -15 participate in EU legislation. Not party Investment Income to FTAs with other countries via EU. § -20 | 18. Income, Savings Source: ONS 19. Consumption to Slow Source: Barclays Research Switzerland EFTA Retail sales incl. fuel 0.2 EFTA member. Bilateral trade agree- and Consumption (lhs, % 3m/y) Trade balance Secondary income 6 Barclays forecast -25 ments with EU. No four pillars, but Consumption Primary income Current account 100 does contribute to EU budget. 4 40 -30 Real disposable Private consumption 0 | FTA 1900 1920 1940 1960 1980 2000 2006 2008 2010 2012 2014 2016 50 income (lhs, % y/y) Deep trade agreement for goods trade. 2 20 Some non tariff barriers. Excludes 0 services including financial services. 0 0 27. Effect of Sterling Depreciation Non-tradable Import prices Net exports Output Inflation Most Favoured Nation | WTO -50 -2 -20 Net exports and prices Consumers’ intent to purchase Default option. Average EU tariff on UK domestic demand Gross savings (rhs, % balance) exports of 3.2%. No services coverage. -100 -4 -40 initially decline due to “J-curve” Source: Barclays Research 2005 2008 2011 2014 2017 2010 2012 2014 2016 2018 UK firms’ margins, Foreign currency effect Domestic Via consumption hedging, contract UK export prices Demand wealth effect 20. Fiscal Response Structural 21. Declining Intent to Purchase Headline 22. Uncertainty Indicator currency denomination, degree of competition, Source: ONS, Barclays Research (Next 12 months) Source: Barclays Research Cyclical Confidence menu costs in Wider 3.8 Trade 4 Economy 2.9 6 balance 3 2.6 2.4 Wider Personal GBP Economy Finances 4 2.0 Apr 17 2 1.5 (Next 12 0.8 0.4 0 -0.4 (Last 12 months) months) 2 Investment 1 CA NIIP income balance 0 0 -0.1 -0.1 -0.1 Capital gains on foreign currency denominated -1 -2 assets (~93% of total) > capital losses on foreign Source: Wider Economy Personal Finances 2015/16 16/17 17/18 18/19 19/20 20/21 GfK, Barclays Research (Last 12 months) (Next 12 months) 2006 2010 2015 2017 currency denominated liabilities (~58% of total) Source: Barclays Research Important Content Disclosures Notes

Personal Use Only No Liability * Previously published in the Brexit: A Guide to the EU-UK Negotiations All information contained herein shall only be used by the recipient To the extent permitted by law, in no event shall Barclays, † Previously published in the Aftermath of the UK referendum: A tentative guide for his/her own personal reference. Any other use, including any nor any affiliate, nor any of their respective officers, directors, partners, ‡ Previously published in the Global Economics Weekly: The slowing has begun disclosure or distribution to of any information to any third party, employees or third party licensors have any liability, direct or indirect, requires the express written permission of Barclays. including but not limited to (a) any special, punitive, indirect, or § Previously published in UK Economics Research: Q1 17 GDP (Preliminary): The slowing has begun consequential damages; or (b) any lost profits, lost revenue, loss For Information Purposes Only of anticipated savings or loss of opportunity or other financial loss, even if notified or advised of the possibility of such damages or This information has been prepared by the Research Department potential loss, arising from any use of the information provided herein. within the Investment Bank of Barclays Bank PLC and is distributed by Barclays Bank PLC and/or one or more of its affiliates (collectively and each individually, “Barclays”). The views expressed in this No Advice publication are those of the author(s) alone and are subject to change The information provided does not constitute investment advice or without notice. Barclays has no obligation to update this publication. take into account the individual financial circumstances or objectives This information is intended for informational purposes only and of the clients who receive it. You should consult with your own should not be regarded as an offer to sell or a solicitation of an offer accounting, legal or other advisors as to the adequacy of this to buy the products or securities to which it applies. No representation information for your purposes. is made that any returns will be achieved through its use. No Use For Valuation Purposes Information Provided May Not Be Accurate or Complete and No data or price information should be used for any valuation, trading, May Be Sourced from Third Parties settlement, accounting purposes or other related functions. All information, whether proprietary to Barclays or a third party, is provided “as is” and Barclays makes no express or implied warranties, Not Available In All Jurisdictions and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data included herein. Not all products or services mentioned are available in all jurisdictions. Other than disclosures relating to Barclays, the information contained No offers, sales, resales, or delivery of any products or services in this publication has been obtained from sources that Barclays described herein or any offering materials relating to any such products Research believes to be reliable, but Barclays makes no representations or services may be made in or from any jurisdiction except in that the information contained herein is accurate, reliable, complete, circumstances which will result with compliance with any applicable or appropriate for use by all investors in all locations. Further, Barclays laws and regulations and which will not impose any obligations does not guarantee the accuracy or completeness of information which on Barclays. is obtained from, or is based upon, trade and statistical services or other third party sources. Because of the possibility of human and mechanical Tax Disclaimer errors as well as other factors, Barclays is not responsible for any errors Barclays does not provide tax advice and nothing contained herein or omissions in the information contained herein. Barclays is not should be construed to be tax advice. Accordingly, you should seek responsible for, and makes no warranties whatsoever as to, the content advice based on your particular circumstances from an independent of any third-party web site accessed via a hyperlink contained herein tax advisor. and such information is not incorporated by reference.

Intellectual Property Information Provided Is Not Indicative of Future Results © Copyright Barclays Bank PLC (2017). All rights reserved. Any data on past performance, modelling or back-testing contained No part of this document may be reproduced or redistributed herein is not necessarily indicative of future results. All levels, prices in any manner without the prior written permission of Barclays. and spreads are historical and do not represent current market levels, prices or spreads, some or all of which may have changed. The Barclays Bank PLC is registered in England No. 1026167. information referenced herein or any of the results derived from any Registered office 1 Churchill Place, London, E14 5HP. analytic tools or reports referenced herein are not intended to predict actual results and no assurances are given with respect thereto. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity).