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May wants to extend post-Brexit transition, angers Westminster

The UK prime minister’s attempt to unlock the Brexit talks backfires as MPs across the Brexit divide lambaste her plans.

Brexit: One step closer

Theresa May has said she was prepared for Britain to remain in the European Union until 2021 in an attempt to break the deadlock in Brexit talks.

The UK prime minister’s new tactic was met with anger from MPs in both camps but appeased many EU leaders at a two-day European summit, where German Chancellor Angela Merkel called for more flexibility from both sides to settle the Northern Ireland question and avoid a hard border in the region.

However, some EU members remained unclear of the UK’s post-Brexit transition plan.

Meanwhile, UK retail sales fell by 0.8 per cent in September, driven by a 1.5 per cent drop in food store sales. These figures follow a volatile week for Sterling and set the scene for Mark Carney’s speech at The Economic Club of New York at 16.30 (GMT) today. The Bank of England (BoE) governor will turn his attention to the recent dip in inflation and the potential for wage increases to spiral up, which have already risen at the fastest pace in a decade.

In Europe, now that Italy has announced its spending plans for 2019, the yield on 10-year sovereign bonds continued to increase and hit 3.642 per cent. Investors have begun to sell them in anticipation of a stand-off between Brussels and Rome over the Italian fiscal plan.

In the US, Federal Reserve (Fed) member Raphael Bostic will speak today at 17:00 (GMT). A centrist among the Fed, analysts will wait to hear if he agrees with the recent shift to restrictive monetary policy. Any hint that he does will strengthen the Dollar further.

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