UK likely to have "clean break" with EU

Britain will not be seeking a “half in, half out” deal with the European Union. That’s according to officials ahead of a long awaited speech by Prime Minister Theresa May in which she is expected to set out her Brexit priorities.

She will call for a “new and equal partnership” with the EU: “Not partial membership of the European Union, or an associate membership of the European Union.”

So far the premier has been accused of “muddled thinking” in her approach to the divorce talks with Brussels. But recent signals that she is now preparing for a hard Brexit have worried some.

Nicola Sturgeon, Scotland’s First Minister is among them. In particular she has been alarmed by comments made by the UK’s finance minister, Chancellor Philip Hammond, to German media at the weekend.

Hammond told the German newspaper Welt am Sonntag that Britain is prepared to “do whatever we have to do,” including turning away from Europe and towards other markets, to protect its economy.

Hammond also suggested that Britain could cut taxes to encourage companies to move to the UK.

“ The hints about what (Theresa May) she is likely to say and the comments of Phillip Hammond in the German newspaper are deeply troubling. What he is describing is a race to the bottom – a sort of bargain basement economy where the UK government will try to attract business to the UK by offering lower taxes, lower wages, less regulation in terms of workers rights,” said Nicola Sturgeon.

On the eve of May’s speech in front of a gathering which will include foreign ambassadors in central London, sterling fell sharply.

Currency traders and and investors are generally opposed to a clean break with the EU – away from preferential single market access in an economic bloc which accounts for roughly half of Britain’s experts and imports. They don’t want to hear that access to the EU’s single market will be sacrificed in favour of tighter control over immigration.

But “Brexiteers” ( suporters of the “Leave” campaign”) claim that’s exactly what the country voted for in the June 23 referendum.

One wonders if this Theresa May “speech” will say anything we don’t yet know by the time it’s given… #Brexit https://t.co/PfdetVBIro pic.twitter.com/jloROHAT0q— Jon Worth (@jonworth) January 7, 2017

Theresa May has said she intends to trigger Article 50 by the end of March which will mark the beginning of formal divorce talks with Brussels.