Rex

• Belgium and Spain released their national Harmonized Index of Consumer Prices (HICP) data, marking the start of a series of reports leading up to the full euro area print this Wednesday. • Belgian harmonized CPI showed a significant decrease, dropping from 4.1% in May to 3% in June. • Spanish inflation unexpectedly remained steady at 3.6% annually, defying the 3.4% consensus forecast due to a monthly price increase of 0.6%.

• Britain is facing a critical threat to its national sovereignty driven by the dominance of foreign-owned artificial intelligence and a lack of domestic infrastructure. • High industrial electricity prices compared to France, the Netherlands, and Nordic countries are deterring data center investments, with some operators already choosing Ireland or Denmark over the UK. • A 2025 report by the Data Centre Council warns that the UK risks losing billions in AI-related investment if energy costs are not stabilized and long-term supply is not secured.

• Today's economic calendar focuses on European data, specifically the European Commission's confidence indicators and June inflation figures for Spain and Belgium. • Market participants are awaiting the EMU CPI figures due Wednesday, with consensus expectations of 3% Y/Y for headline inflation and 2.5% Y/Y for core inflation. • These projected declines in inflation may reduce the immediate pressure on the European Central Bank (ECB) to implement further monetary tightening.

• The EUR/JPY currency pair experienced a decline to 183.14 last week before seeing a partial recovery. • Analysts view the drop from 186.30 as the third leg of a larger pattern originating from the 187.93 level. • The current market bias remains neutral, with a critical support level identified at 182.01.

• ActionForex forecasts a moderation in labor market growth, predicting June payroll additions will slow to 120K. • The unemployment rate is expected to remain stable at 4.3%, suggesting that while conditions are steady, the recent rapid pace of hiring is unsustainable. • Chair Warsh is scheduled to deliver his first major public remarks, where he is expected to introduce a more structural framework for central banking.

• May US PCE deflators, the Federal Reserve's preferred inflation gauge, were released yesterday and aligned closely with market expectations. • The data serves as a critical reality check following the Fed's explicit commitment last week to prioritize its price stability mandate. • This focus on inflation persists as the US economy continues to show resilience in both overall growth and the labor market.

• Core bonds rallied recently, with US Treasuries outperforming German Bunds as yields fell across the curve. • US Treasury yields dropped between 5.2 bps for 2-year notes and over 10 bps for 30-year bonds, while German rates eased by 2.4 to 6 bps. • The decline was primarily driven by end-of-quarter extension buying and a continuous drop in oil prices.

This week marked 10 years since the UK chose to leave the EU. In a series of interviews with key players from both sides, Kiran Stacey looks back on the Brexit vote that changed the country foreverRead the Guardian’s full article on Brexit here Continue reading...

• Bloomberg argues that the UK and EU must strengthen their security and trade partnerships to navigate the post-Brexit landscape. • The analysis suggests that closer cooperation is achievable and necessary, even though there are no immediate plans for the UK to rejoin the EU. • This shift is critical for stabilizing economic ties and enhancing collective security measures between the two major powers.

• Trustnet analyzed the performance of UK and European funds ten years after the Brexit referendum to determine the best-performing assets. • Adrian Murphy, CEO of Murphy Wealth, acknowledged that while Brexit contributed to sluggish economic growth, it is not the sole reason for the UK stock market's underperformance. • Murphy highlighted that the FTSE 100's heavy concentration in financials, energy, and pharmaceuticals caused it to lag as global investors prioritized high-growth tech stocks.

• The Dax 40 and other European equities are experiencing a consolidation phase following a wave of selling in the technology sector. • The downturn was triggered by investor concerns regarding the profitability of massive, debt-funded investments in AI infrastructure by major US tech firms. • This shift highlights a growing market skepticism toward the immediate financial returns of large-scale artificial intelligence spending.

• Keir Starmer has resigned as UK Prime Minister, marking his fall from a landslide election victory and becoming the sixth person to hold the office since 2016. • European media outlets, including Spain's La Vanguardia, are reacting with bemusement, describing the UK's political landscape as a "revolving door." • The situation signifies a major shift in international perception, as Britain's reputation for political stability has been replaced by a sense of chronic instability.

• Nearly a decade after the Brexit vote, the European Union has consolidated its identity while the UK continues to struggle with the long-term shape of its relationship with the continent. • EU leaders, including Poland's Donald Tusk and Spain's Pedro Sánchez, have expressed a desire for the UK to return, with Tusk explicitly mentioning a "Breturn." • Public sentiment remains favorable toward reintegration, as a European Council on Foreign Relations poll shows 66% of citizens across 15 EU countries support UK membership.

• Former EU Brexit negotiator Michel Barnier stated that the UK could potentially rejoin the European Union on a "short" timeline if the political will exists. • Barnier suggested that the UK could also integrate into a newly proposed European security and defence council to strengthen regional stability. • Separately, leaders from the Visegrad Four (Czech Republic, Hungary, Poland, and Slovakia) are meeting in Hungary to revive their regional grouping.

• As the tenth anniversary of the Brexit referendum approaches, new polling indicates a significant shift in European sentiment toward the United Kingdom. • Majorities in every polled EU country, from Poland to Portugal, now express a desire for Britain to rejoin the European Union. • Many respondents suggest the European Commission should soften its "red lines" to improve bilateral relations, particularly regarding shared security concerns.

In this week’s newsletter: As the EU consolidates,​ t​he UK faces renewed debate ​over the long‑term shape of its relationship with the continent• Don’t get This Is Europe delivered to your inbox? Sign up hereThe morning of 24 June 2016, the day after Britain voted to leave the EU, dawned grey and overcast in Brussels, after a stormy night. As the Guardian’s correspondent in the city, after a few hours’ sleep, I hurried to a breakfast briefing with Conservative MEPs at a smart hotel in the EU quarter. Large trays of eggs, sausages and beans were barely touched, as MEPs fielded questions they couldn’t answer: What happens now? When would the UK leave? Would David Cameron resign? A few hours later he did.In the EU institutions officials broke down in tears. A few top British EU civil servants prepared to resign. Anti-EU populists were jubilant. European leaders feared a domino effect of withdrawals. Sadness, shock and anger swirled on that humid day. The then-president of the European parliament, Martin Schulz, told me that EU lawyers were studying whether it was possible to speed up the triggering of article 50, the then-obscure and untested EU exit clause. Then European Commission president Jean-Claude Juncker declared he would like to get Brexit negotiations started “immediately”. The idea of hurrying Britain out the door was soon dropped, but those statements reflected the febrile mood. Continue reading...

• British politics remains deeply fractured following the 2016 EU referendum, leading to a cycle of instability and the appointment of seven prime ministers since the vote. • Labour Prime Minister Keir Starmer announced his resignation on Monday after two years in office, citing a sluggish economy and a malfunctioning government. • The political turmoil is attributed to the lasting legacies of Brexit, which have left the British electorate divided and jaded.

Who put Theresa May’s back up on Instagram, what did Boris Johnson say about bananas and much moreIt is 10 years since the British public decided to pack up its troubles in its old kit bag, give Jacques Delors the final up yours and march off into an EU-free paradise. Opinions may differ on how that has worked out. Certainly several of the architects of the whole thing are enjoying lovely well-paid retirements on the speaking circuit or have seats in the House of Lords. Anyway, here are 18 questions about Brexit and the referendum campaign. How much do you remember about some of the weirder aspects of those few weeks, months and then years as the UK negotiated its exit?The Guardian 10th anniversary Brexit referendum quiz Continue reading...

Front pages across the continent reflect on Britain’s political turmoil after Starmer becomes seventh prime minister to quit since 2016Europe live – latest updatesIn Germany, Downing Street was likened to a transit station, given the regular comings and goings of different prime ministers and staff. Meanwhile, a bemused Spanish newspaper concluded No 10 seemed to have been fitted with a revolving door.As news outlets across Europe digested the implications of Keir Starmer’s precipitous fall from landslide election winner to ousted prime minister, many also focused on a wider reality – Britain’s once much vaunted political stability was a thing of the past. Continue reading...

Analysis, commentary and reaction on the decade since the UK voted to leave the European UnionAs expected, Czech president Petr Pavel has filed a complaint against the government’s decision to exclude him from the Czech delegation for next month’s Nato summit in Ankara.The move comes after the Czech prime minister, Andrej Babiš, said yesterday that the decision to exclude the president was “purely practical,” as he dismissed “an unnecessary” dispute with the president (Europe Live, Monday). Continue reading...

How five months in 2016 that encompassed Boris Johnson siding with Vote Leave, Jo Cox’s murder and David Cameron’s resignation shaped the UK’s futureDavid Cameron, having promised in 2013 that a future Conservative government would offer a referendum on Britain’s membership of the EU, announces the date of the vote: 23 June 2016. The next day, Boris Johnson, then the mayor of London, says he will campaign for leave. Continue reading...

From north-east Scotland to Romford, London, what do those who spoke to the Guardian during the referendum campaign make of how it all panned out?The Guardian has revisited five bellwether constituencies we reported on during the 2016 EU referendum campaign, and asked those we spoke to at the time how they now feel about Brexit a decade on from the vote. Continue reading...

Ten years on, leaving the EU has made life more difficult and costly – here are some of the ways we’ve lost outIt is 10 years since voters in the UK chose to leave the EU, and our wallets have been feeling the effects ever since.From paying more to take the dog on holidays in France – and making calls while you are there – to higher grocery bills and the headache of filling in customs forms for parcels, Brexit has made many simple tasks more complicated and expensive. Continue reading...

Underlying operating profits down 19% with 2019 frigate-building programme making loss, firm reportsOne of the UK’s biggest defence contractors has blamed Brexit and Covid among a catalogue of problems to beset a key contract for the Royal Navy, which led its annual profits to plunge.Annual profits at Babcock International fell by almost a fifth in the year to the end of March, as the firm reported a £140m charge on its contract to build five Type 31 frigates for the Royal Navy. Continue reading...

Former party leaders reflect on the turbulence that followed the referendum in which most Scottish voters backed the losing sideThe decision to quit the EU bolstered support for Scottish independence, which a decade after the Brexit referendum is at near record levels, according to Scottish Labour’s former leader Kezia Dugdale.Dugdale said the Brexit vote “creates a frame around fairness” for many in Scotland because, unlike England, Scottish voters comprehensively backed remain in 2016, by 62% to 38%, yet found their country taken out of Europe. Continue reading...

Ten years ago Ebbw Vale had the highest proportion of leave voters in Wales despite huge EU funding, which has not been fully replacedWhere Ebbw Vale’s steelworks once stood is now a cluster of gleaming modern buildings including a hospital, a leisure centre and a college. Over the past decade, these public facilities have been joined by a public-private cybersecurity research centre and two tech firms. A new railway station opened at the site in 2015.Yet, during the Guardian’s visit to the Welsh valleys town last week, the area was quiet. Nearly as many sheep as people appeared to be using the new facilities: a ewe and three lambs, escaped from somewhere, busied themselves in a strip of rewilded land next to the tech buildings. Continue reading...

Guardian investigation also finds same areas experienced relative decline over same periodLeave-voting areas have seen faster relative growth in foreign workers since the Brexit referendum, a Guardian investigation has found.Data analysis suggests that the decade since the Brexit vote may not have matched the expectations of many Leave supporters, showing their local areas have also become relatively more deprived over the same period. Continue reading...

• Former EU chief Brexit negotiator Michel Barnier suggested that the UK could potentially rejoin the European Union under "special" terms. • This proposal comes roughly a decade after the UK's referendum decision to leave the bloc, highlighting a possible path for future reintegration. • A key point of negotiation would be currency, as current EU law requires member states to adopt the euro, with Denmark being the only permanent exception.