Date: 4th January 2021
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest UK policy developments:- The UK entered into a new relationship with the EU on 1 January 2021, under the UK-EU Trade and Cooperation Agreement (TCA).
- Under the TCA, there are zero tariffs and zero quotas relating to goods trade. But the services chapter is somewhat limited with no agreement on 'equivalence' for financial services.
- There is a novel 'rebalancing mechanism' in the TCA to deal with infringements of the 'level playing field' relating to regulations and subsidies.
- The TCA will be supervised by a Partnership Council, supported by a network of other committees. There is no role for the European Court of Justice (ECJ).
- Recent government announcements have significantly tightened Covid-related restrictions (England).
- Public sector net borrowing (PSNB) was £31.6bn in November 2020, and £240.9bn in the first eight months of FY2020 (April-November 2020). In November the OBR forecast borrowing of £393.5bn for FY2020, implying a further £152.6bn of borrowing for the final four months of FY2020.
- Public sector net debt (PSND) was £2,099.8bn (99.5% of GDP) at end-November, the highest debt to GDP ratio since the financial year ending 1962 (FY1961).
- The ONS's revised GDP data showed growth of 16.0% (QOQ) in 2020Q3, following a 18.8% (QOQ) fall in 2020Q2. GDP in 2020Q3 was still 8.6% lower than pre-pandemic 2019Q4.
- The Nationwide Building Society reported a 0.8% (MOM) rise in house prices in December, to be 7.3% higher YOY, a six-year high.
- The Society of Motor Manufacturers and Traders (SMMT) reported that UK car production was 31.0% lower YOY in the year-to-November.
Press enquiries:
Arbuthnot Banking Group PLC:
Ruth Lea, Economic Adviser
07800 608 674, 020 8346 3482
ruthlea@arbuthnot.co.uk
Follow Ruth on Twitter @RuthLeaEcon
Maitland:
Sam Cartwright
020 7379 4415
arbuthnot@maitland.co.uk
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Arbuthnot Banking Group plc published this content on 04 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 January 2021 09:43:04 UTC