After Brexit, the German Chancellor Angela Merkel has warned that the UK will become ‘an economic competitor on our own doorstep’ if the UK is allowed to turn into a ‘Singapore-on-Thames’; in-line with the current UK Prime Minister’s view. When Boris Johnson was Foreign Secretary he had already stated his desire to recast the UK as a low-regulation and low-tax state. In what looks like an offer of reconciliation, Merkel said, ‘No country in the world can solve its problems alone and if we all work against each other we will not win. I believe in win-win situations if we work together’.
The warnings came during a parliamentary debate and comes after several EU countries expressed their fears that the UK will drive for a massive deregulation push in the hope to gain an economic advantage. Merkel told the delegation that, ‘We still have every chance of getting an orderly Brexit and the German government will do everything it can to make that possible – right up to the last day. But I also say we are prepared for a disorderly Brexit’. However, she went on to say: ‘But the fact remains that after the withdrawal of Britain, we have an economic competitor at our door, even if we want to keep close economic, foreign and security cooperation and friendly relations’.
We also saw Donald Trump stepping up the pressure on the Fed to slash rates to zero ‘or less’ in a new attack. As is normal these days, he again targeted the Fed’s monetary policy via Twitter calling them ‘boneheads’ and accused them of missing out on a ‘once in a lifetime opportunity’. He tweeted (or rather Dan Scavino, the White House social media director tweeted): ‘The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet’, adding, ‘The USA should always be paying the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads’.