The British government said that the post-Brexit trade rules it negotiated with the European Union “cannot go on” and need a major rewrite, straining already-tense U.K./E.U. relations and drawing a message of concern from the U.S. government, the Associated Press reported. The government said Britain would be justified in unilaterally suspending the legally binding Brexit agreement but had decided not to do so just yet. Since the U.K. left the EU’s economic embrace at the end of 2020, relations have soured over trade arrangements for Northern Ireland, the only part of the U.K.
Britain's supermarkets, wholesalers and hauliers were struggling to ensure stable food and fuel supplies after an official health app told hundreds of thousands of workers to isolate after contact with someone with COVID-19, Reuters reported. Coronavirus cases in Britain have been broadly rising for a month, with more than 44,000 recorded on Wednesday. "We're very concerned about the situation," Business Secretary Kwasi Kwarteng said.
British public borrowing last month was almost a fifth lower than a year earlier, when the economy was feeling the full force of the coronavirus pandemic, but rising inflation put upward pressure on debt costs, Reuters reported. Public sector net borrowing, excluding public sector banks, fell to 22.8 billion pounds ($31.0 billion) in June, still the second-highest June figure on record. Economists had forecast a drop to 21.6 billion pounds.
The Bank of England signaled it’s not overly worried that the U.K.’s current housing boom, fueled by a temporary tax cut, will lead to an unsustainable buildup in mortgage debt, Bloomberg News reported. In its twice-yearly assessment of financial stability, the central bank said while the share of households struggling with debt increased “slightly” during the the pandemic, it “remains significantly below its pre-global financial crisis level.” The sanguine assessment comes amid a surge in U.K. house prices as buyers race to take advantage of a cut in stamp duty, a levy on transactions.