Analysis: UK Foreign Secretary Truss is set to unveil the UK's plan for new legislation that will override parts of the Northern Ireland protocol (timing TBC)

Analysis details (09:20)

• Today, UK Foreign Minister Truss will appear before the House of Commons following a cabinet meeting this morning and yesterday's calls with EU VP Sefcovic and her Irish counterpart Coveney.


• Note, today will not see the presentation of fresh legislation, merely what future legislation will contain/aim to achieve.


• This comes in the wake of UK PM Johnson's meeting with political leaders in Northern Ireland yesterday whereby he stated that although he wishes for existing issues to be resolved in a consensual way, a legislative solution is required.


• The proposed legislation will focus on reducing paperwork for goods moving between Britain and Northern Ireland, a potential regulatory regime for goods sold in NI, UK tax setting powers in NI and potentially seek the end of the ECJ's role in NI.


• Politico suggests that "the U.K. will propose further cooperation with Brussels on data sharing, as requested by Šefčovič, to assure them that the integrity of the EU’s Single Market will be safeguarded".


• Politico also notes that the idea is to put pressure on the EU without formally tabling legislation and then potential table legislation in early June if there is no movement from the EU side in the coming weeks.


• Commentators suggest that the above will be a tough ask for Brussels and could prompt a trade war with the EU. Furthermore, it remains to be seen whether such an announcement will convince the DUP to return to Stormont.


• Capital Economics has cautioned that in the event the EU placed tariffs on UK exports and the UK responded by placing tariffs on imports from the EU, this could add 0.4ppts to CPI. Note, the consultancy is doubtful that the UK would pursue such a course of action during the cost of living crisis. Instead, Capital Economics expects inflation to be bolstered via the FX impact on GBP which in turn could weigh on GDP. 

17 May 2022 - 09:20- Data- Source: Newsquawk/Politico