Brexit Day 29: stay in the single market and accept freedom of movement or have another status

Today marks one month since this crazy journey began. Later I will pick out some of the most notable bits from these remarkable last 4 weeks. I will write on occasion in the weeks and months ahead when I think it’s worthwhile. Before the fun, we must deal with business:

A note on Theresa May’s trip ‘over there’…

If Mrs May’s visits to Berlin and Paris set the tone for the rest of the Brexit process there must be some grounds for optimism that we can depart the EU on good terms – though probably not ones which are as economically advantageous as the ones we have now. Key points from Paris:

Hollande said he recognised the UK needed time to prepare but the sooner it triggers Article 50 the better.  
My take: this is consistent with Mrs Merkel’s position, but with an added reminder that France will not stand for the UK sitting in pre-Article 50 limbo forever. Nobody likes the person that says a party is rubbish, goes around telling everyone they are leaving right now because the party is rubbish. And then just hangs out by the front door not leaving. Don’t be that person.

Hollande also said the UK's choice is to stay in the single market and accept freedom of movement or to "have another status".

My take: This is key. Part of the reason, I suspect, that the approach of Germany and France has been reasonable thus far is because that May and Hammond (Remainers both) have recognised that the EU cannot compromise on free movement (even if there may be some clever trade-offs in order to secure targeted single-market access). Boris Johnson, and many BeLeavers I might add, are ‘pro cake and pro eating it’ – wanting all the benefits of the single market and none of the costs. I don’t think the UK will accept freedom of movement, as its not compatible with reducing net migration, so we will not stay in the single market. What the ‘other status’ the UK achieves is, of course, is the billion euro question.  

So the lines of engagement have been drawn? The UK will have to trigger Art 50 pretty soon after the new year arrives, and will have to leave the single market if cannot offer freedom of movement.

….And those miserable Markit PMI numbers

Yes they are pretty dreadful and imply a contraction in the economy later this year. Health warning: this is high frequency survey data that was taken in the immediate aftermath of Brexit. While this is certainly concerning, let’s see where we are once everyone has got back from their summer holidays. Next economic policy checkpoints: MPC meeting on 4 August, Conservative party conference in early October and the Autumn Statement in December (what will Philip Hammond’s policy reset look like?).   

And now ladies and gentlemen, without further ado...the Brexit awards...