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Weekly Economic Briefings > Eurozone Weekly Economic Briefing

  • January 2017
  • -
  • Oxford Economics
  • -
  • 7 pages

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Next Tuesday, Theresa May, the UK Prime Minister, is to give a speech billed as setting out her government's priorities for Brexit. Reading the tea leaves, however, suggests that the governments negotiating priorities have been clear for some time. It therefore seems almost certain that Britain will leave the single market as the price for regaining control over immigration. But Britain would also like to avoid the imposition of tariffs on trade this would imply.

One possibility would be an arrangement centred on continued membership of the European customs union. This would enable Britain to control immigration and avoid the need to pay into the EU budget. But there is never a free lunch and membership of the customs union would appear to preclude the ability to sign bilateral trade agreements with other countries. Hence, the UK seems to be aiming for some form of bespoke customs agreement with the EU, rather than remaining in the EU customs area.

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