Alison Ryan, London Office, Bord Bia – Irish Food Board
Key events this week:
The UK will have a new prime minister the week commencing Monday July 22, after Conservatives voted to tighten the rules for electing new leaders. There are currently eleven candidates in the race. the party decided to make it more difficult for MPs to stand. Under the new rules, a candidate wishing to stand in a leadership contest will need eight supporting MPs, instead of two, to make it to the first round of voting. The support of 16 MPs at the first round of voting and 32 MPs at the second round will be necessary to proceed in the contest, otherwise contestant must concede. Up to five rounds of voting are now planned between June 13 and 20, when two MPs will emerge to face a series of husting and then a ballot of the party’s 160,000 members.
Boris Johnson formerly launched his leadership campaign on Monday this week, with a video posted on social media highlighting his credentials to become the next leader of the Conservative Party. Throughout the day, his team released endorsements from MPS across the party’s spectrum, including the Brexit minister Kwasi Kwarteng. During his campaign trail this week, Johnson has stated that the Conservative party would “face extinction” if they delayed Brexit again. He has also ruled out an early general election and said he was against a second referendum.
Consumer borrowing dropped to a five year low due to continued Brexit uncertainty. The annual growth rate in unsecured consumer lending dropped to 5.9% from 6.4% in March amid persistent Brexit uncertainty. Concerns that the Conservative party will elect a new prime minister with a mandate to pursue a no-deal Brexit is also expected to dampen consumer spending over the coming months.
Implications for Irish food & drink companies:
The low consumer borrowing rate for March 2019 highlights that the economy is reacting negatively to the uncertainty of the current political environment. Furthermore, a number of candidates for the Conservative party leadership contest have come out in support of a no-deal Brexit, meaning that the threat of the UK leaving the EU without a deal on October 31 has increased. It is crucial therefore, that Irish food and drink manufacturers continue to prepare for all Brexit possibilities, including a no-deal Brexit, the threat of which has re-emerged.
Looking ahead:
- Newly elected MEPs will be taking their seats on July 1.
- A new Conservative Party leader is expected to be elected in the week commencing July 22.
- October 31 is the current Brexit deadline.