Brexit Day 7: "I have never seen so contemptible and irresponsible a situation", "There is a very deep pit in hell reserved for such as he #gove"

Conservative leadership: Gove knifes Boris. In the front. In broad daylight.

At 7am I was worried that this section might be a bit dull today. Boy, was I wrong.

The leadership process is moving metronomically towards a conclusion on 9th September. Graham Brady, chair of the 1922 Committee and returning officer, can barely disguise his glee on the TV when discussing it. ‘Look’, he seems to suggest, ‘we Tories know how to run a leadership contest’. The first ballot in the Parliamentary party will be held next Tuesday and my colleague Joe has written a helpful piece here.

So much for the process. What about the politics? The brutality of Tory power politics is breath-taking to behold. It appears to me now that life is imitating art, and that Thrones and House of Cards are now seen as training courses in Westminster rather than entertainment.

The Conservative nominations closed at lunchtime today and there was drama to the last. Earlier in the week Michael Gove was building support for Johnson. This morning he did Johnson over with such aplomb that it will surely be the subject of an HBO mini-series. A press statement issued at 9am (presumably timed to torpedo Bo Jo’s launch) stated that Gove did not think Johnson was up to the job of leading the country and that he was entering the contest himself. Supporters of Johnson started switching allegiances to Gove. Nick Boles, a Tory moderniser, will run Gove’s campaign.

The apoplexy in the Boris camp was all over town. From the Sun’s pol ed:

To make it worse for BoJo, May's campaign launch was text book. Playing to the Tory right, and backed by Leave stalwart Chris Grayling, she gave an assured and prime ministerial performance. She played to her strengths, focussing on competence and the need to put a safe pair of hand in charge, by implication suggesting that Boris is neither competent nor safe. The BBC’s Norman Smith described it as a ‘hatchet job’ on Boris. She spelled a number of things out: no wriggling out of the result, no second referendum, no general election, no Article 50 before the end of the year, Autumn Statement as usual and a Brexit department in Whitehall to be headed by a Leaver. She even managed to smile and make jokes, which doesn’t come naturally to her.

At just before 12 noon, Boris gave his speech. He called for a capitalism that is fairer and specifically mentioned FTSE 100 pay CEO packets. He then defended his record as mayor – rather more than one might have expected (why?). At the end he said that he would not be standing for the leadership.

At 5pm Gove surfaced, giving an interview to the BBC’s Laura K to twist the knife further. Over the previous days he said that many supporters had said that he was the man to lead the party and the country, not Boris.

Michael Heseltine gave an excoriating interview to BBC 5Live. Speaking of Bo Jo he said:

“He's like a general that led his army to the sound of guns and at the sight of the battlefield abandoned the field to the claims of his adjutant who said he wasn't up to the job in the first place. I have never seen so contemptible and irresponsible a situation.”

Final runners: Theresa May, Stephen Crabb, Liam Fox, Andrea Leadsom, Michael Gove

Labour: the nightmare continues

For the most part it was a day for the Conservatives. Labour shadow ministers (or at least those left) appear to be in a competition to compete for who can resign in the most innovative way. Rob Marris resigned at the despatch box today during the Finance Bill. Angela Eagle did not launch today but is definitely running (apparently). As mentioned in previous bulletins, if Corbyn is not vanquished the PLP will almost certainly split. It appears that the plan is to let Corbyn stew for a few more days, hoping that he folds.

Future relationship with the EU

Teresa May is going after single market access for services says CityAM editor Christian May. Our Executive Chairman, Iain Anderson is :). Key point: a May Government will not trigger Article 50 until it is good and ready. That could be 2017.

Article 50 corner: The House of Lords library has published a characteristically helpful paper on the role of Parliament in leaving the EU, including Parliament’s role in Article 50. Opinion is divided on the matter. We tend to take the view here at Cicero that the PM has the powers required. Key quote: The Prime Minister has said it would be for his successor and his or her Cabinet to decide whether the House of Commons should have a vote on the decision to trigger Article 50, the formal process set out in the Treaty on European Union for member states to follow should they decide to leave the EU. Some legal commentators agree that prerogative powers would enable a Prime Minister to take this decision; some have suggested that Parliament could have a role, and others have gone further, arguing that prior parliamentary approval would be required before Article 50 could be invoked.

Machinery of Government

Oliver Robbins, head of the new EU Unit in the Cabinet Office, is on twitter. @OllyRobbins Amongst the 249 accounts he follows are the CIA and the Archbishop of Canterbury. He looks like this:

Trading places

The idea of the Anglosphere tends to get Leavers all aquiver. So the news that Australia is looking for an FTA and New Zealand may offer their trade negotiators to assist the UK will surely go down well. I will resist the obvious jokes about expertise in sheep and sauvignon blanc and make the serious point that there are lots of experienced, talented trade bods down under. Of course there’s a quid pro quo. Australia and New Zealand will be looking to get more of their fine agricultural products in British supermarkets once we are out of the EU. Incidentally, Boris Johnson said in his launch speech that he had heard from India, Malaysia and Singapore also wanted to talk trade.

I will keep banging on about this every day – we need to talk about services as well as goods in these negotiations. Services is what we do in this country.

The Governor speaks: Rate cut coming, QE back on the cards?

Mark Carney gave a rather sobering assessment of the prospects for the UK economy following Brexit today. Growth forecast has been downgraded to 1.6 per cent (though that’s still growth). He said “The economic outlook has deteriorated and some monetary policy easing will likely be required over the summer”. The MPC will make an initial assessment on 14 July, and a full assessment complete with a new forecast will follow in the August Inflation Report. In August, the MPC will also discuss further the range of instruments at its disposal. He continued: “Part of the plan ruthless truth telling. And one uncomfortable truth is that there are limits to what the Bank of England can do. In particular, monetary policy cannot immediately or fully offset the economic implications of a large, negative shock”. Our holiday to the US just got more expensive again.

Companies and Markets

Maurice Lévy, chief executive of Paris-based Publicis, said that France would benefit from Brexit and that start-ups would go to Paris because of the loss of single market access for UK start-ups. We are going to get a lot of trash talking about the UK in the weeks ahead and I am sure corporate France will find it particularly enjoyable sport. It appears that the FT will be the route to market for those wishing to engage in a bit of sledging. I will be picking out the best ones here.

The plural of anecdote is not data. However, I have heard from a friend that two major London estate agents have told him that transactions are holding up at the moment. A cheap pound suddenly makes the market look attractive for foreign investors. However, there were reports today that a major Singapore bank is halting loans to buy UK property amidst uncertainty. An interesting piece from the Guardian on the impact on real estate. My hunch is that people are going to sit on their hands, or else use this as an opportunity to renegotiate on price. Gazundering may be back.

HSBC is staying in London according to Douglas Flint. He told an audience at the TheCityUK conference that Brexit had already been taken into consideration and did not affect their calculation. He said: “The most important thing is we start with the presumption we need very full access to the single market and what will it take to deliver that.” I suggest reading the FT coverage of his remarks. It’s very instructive indeed from one of the most important people in global finance.

FTSE 250 up today again. Is the FTSE experiencing a dead cat bounce? Who knows. I am going to be tracking Lloyds shares as my bellweather of market sentiment on the UK economy. It’s a UK-focussed lender with tons of SME and retail customers and it’s fallen very sharply since Brexit. HSBC, a global bank HQed in the UK has gone up in value since the beginning of the month.

Remains of the day

UEA’s Chris Hanretty has done the maths and calculated that 421 out of 574 English and Welsh Westminster constituencies probably voted to Leave. That is a quite astonishing figure. All the details here.

Saatchi and Saatchi have released ads that were not used as part of the campaign. You can see them here – some of them have considerable impact. One of my favourites below:

Serious question: is the post-War order breaking down?

While we are all watching the machinations inside the bubble, there are some serious questions to confront as a friend in the US points out:

“this all worries me in terms of European integration, but also about how the vote is emblematic of a broader anti-trade and anti-globalization push in the West and that plays into the hands of China in particular. Worrying for all of us and the post-WWII global order.”

I’d add that all this dislocation is surely very pleasing for Vladmir Putin too. In analysing the EU referendum, Professor John Curtice spoke of ‘the second dimension’ of politics – which does not respect left/right identity. In basic terms that second dimension is about whether you feel society and the economy is working for you. And it’s clear too many people in the UK do not feel that globalisation has worked for them. Donald Trump has ruthlessly exploited this dynamic. Hillary ought to be paying attention.

One week ago: the Earth Was feverous and did shake

The UK went to the polls one week ago. It was a dark and stormy night before the polls opened and I didn’t sleep much at all. On the morning of the poll, I sent this quote from the Scottish Play to colleagues:

"The night has been unruly. Where we lay,
Our chimneys were blown down and, as they say,
Lamentings heard i’ th’ air, strange screams of death,
And prophesying with accents terrible
Of dire combustion and confused events
New hatched to the woeful time. The obscure bird‎ Clamored the livelong night. Some say the Earth Was feverous and did shake.”

At the time I thought it was a rather amusing thing to send, without really thinking that the Bard’s words would foretell the week ahead. An esteemed client, and Labour man, observed that good Tories tend to prefer Macbeth to Hamlet.

Tweets of the day

From Jake Berry MP:

Zing of the Day

‘Last time Boris went to Germany for a negotiation, he came back with three nearly-new water cannon’ Theresa May