And We’re Off

Today marks a pivotal event in the history of the UK. On the face of it, the long-awaited invocation of Article 50 commits the UK to withdraw from the EU by 29 March 2019, although a mutually agreed extension / transitional period remains a distinct possibility. There was a softening of language from Theresa May and her ministers after the official letter was handed to Donald Tusk today. This indicated both increasing pragmatism, and possible areas of compromise.  On trade there was a douse of realism as the government appears to be backing away from its threat to leave the EU without a deal, acknowledging it cannot “cherry pick” during Brexit talks.  On citizenship, rhetoric has become more conducive to negotiation (“we respect that” was May’s response to EU leaders’ assertions that Britain cannot stay in the single market without accepting free movement). Regarding the UK’s bill to the EU, there is an implied acceptance. Philip Hammond this morning refused to back the conclusion of a House of Lords report stating the UK had no legal obligation to pay the EU after it left. The markets were fairly subdued by lunchtime, likely a result of this more balanced language by ministers. But in the words of chief Brexit negotiator Michel Barnier, this is the first day of a “very long and difficult road”.