(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
Boris Johnson is not in charge of the UK’s negotiations to leave the European Union. Yet the new British foreign minister has said one of the most helpful things on the topic so far. “It would be geographically, physically, culturally, emotionally and historically impossible for the UK to leave Europe,” he said on July 14. “That is not our destiny. That is not our future.”
The City of London will remain a financial hub for longer than Britain remains a member of the European Union. Talks over how the United Kingdom leaves the EU could end with extra regulation, higher costs and more capital requirements for the financial sector. But it’s unlikely that clients – principally, asset managers and non-financial companies – will move much. They are the ones who drive the so-called “cluster effect”.
The tragic deaths of over 80 people celebrating Bastille Day in the southern French city of Nice will keep border issues front and centre. The truck driver who ploughed through a crowd in what French President Francois Hollande called a terrorist act held French and Tunisian dual nationality, according to news reports. But that won’t prevent intensified fears about Europe’s frontiers.
Theresa May has a beef with privilege. The UK’s new prime minister used her first remarks in the role on July 13 to pledge support for workers and the less wealthy. There’s plenty she can do if she is serious about correcting the economic disparities that played a part in Britain voting to leave the European Union.
The humble four-fingered chocolate bar could play a key role in fending off bidders for Hershey. Meanwhile, the EU-shunning UK battles political instability, a tanking currency and a run on commercial property funds, while the economic pain of allowing in far fewer migrants looms.
UK markets, like the Roman god Janus, have two faces. A week on from Britain’s vote to leave the European Union, equity markets present a view that things won’t be too much worse than the past. Falling government bond yields point to a bleaker future. The pessimistic thesis has more going for it.