Nomination for the UK Conservative party leadership opened today. At the time of writing, neither Boris Johnson nor Theresa May have announced their candidacy.
At yesterday's dinner for EU leaders, Cameron said that Britain will refuse to sign a free trade deal with the EU unless it includes curbs on free movement. He also blamed the other EU leaders for the 'leave' win as they refused to give him a good enough deal on immigration. Both Theresa May and Boris Johnson are expecting to campaign for party leadership on a platform of reducing immigration. For more see Daily Mail story .
Political chaos within the Labour party continued today. At the moment we do not know whether Labour's leader Jeremy Corbyn as incumbent leader automatically is on the ballot paper or if he is to find the support of 50 Labour MPs (which he could struggle to find). Labour's national executive committee has to rule on this, see Independent . Angela Eagle is to formally challenge Corbyn for the leadership tomorrow according to ITV (LON:ITV) . An online petition shows big support for Corbyn (230,000 signatures at the time of writing). In a parliamentary debate today, PM David Cameron said it was in the 'national interest' that Jeremy Corbyn steps down as Labour leader.
Nicola Sturgeon is in Brussels today fighting for protecting 'Scotland's place in Europe'. Among others she has met with EU Commission President Jean-Claude Juncker.
ECB President Draghi believes euro area GDP growth could decrease as much as 0.5% for the next three years after UK's leave vote, according to a note obtained by Bloomberg . Draghi should also have said all international markets would be affected, especially FX markets, but he confirmed that the ECB would do everything necessary to ensure price stability.
Despite the expected hit to GDP growth, the ECB should be in 'no rush' to ease monetary policy after the Brexit vote , see Reuters . One argument was the calmer-than-feared market reaction while this is seen as a 'political problem not a monetary phenomenon'. It was also argued that it is too early to assess the impact andthe ECB is likely to wait for the September projections. In our view, the ECB will use the flexibility within the QE programme in the near term, but on a 1-3m horizon, we expect a temporary step-up in the QE purchases to EUR100bn triggered by a weaker inflation outlook.
France's President Hollande attempted to add some additional pressure on the UK as he said 'the City, which thanks to the EU was able to handle clearing operations for the eurozone, will not be able to do them' and 'it can serve as an example for those who seek the end of Europe.. it can serve as a lesson', see FT.
The 27 EU heads of states said in a common statement this afternoon that they deeply regret the outcome of the UK referendum and 'we hope to have the UK as a close partner', but access to the Single Market required acceptance of all four freedoms. On the future of the EU, the leaders said 'We are determined to remain united. We stand ready to tackle any difficulty that may arise from the current situation', see statement .
See overleaf for comments on financial markets and Brexit time table. See financial markets charts from page 3 and onwards.
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