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ONS releases - UK consumer price inflation: May 2017, UK house price index: Apr 2017, UK producer price inflation: May 2017, Prices economic commentary: June 2017, Index of private housing rental prices (IPHRP) in Great Britain: May 2017

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13 June 2017


Economy

Index of private housing rental prices (IPHRP) in Great Britain: May 2017

Private rental prices paid by tenants in Great Britain rose by 1.8% in the 12 months to May 2017; this is unchanged from April 2017.

In England, private rental prices grew by 1.9%, Wales saw growth of 0.9% while Scotland saw rental prices decrease (negative 0.1%) in the 12 months to May 2017.

UK producer price inflation: May 2017

The rate of increase in factory gate prices appears to be stabilising now that manufacturing input costs have largely fallen month-on-month since January.

The annual rate of factory gate price inflation (output prices) remained at 3.6% for the third consecutive month and slowed on the month to 0.1%, from 0.4% in March and April.

Understanding the different approaches of measuring owner occupiers housing costs: Jan to Mar 2017

Owner occupiers' housing costs (OOH) in the UK under the rental equivalence approach have grown by 2.5% in Quarter 1 (Jan to Mar) 2017.

OOH according to the net acquisition approach have grown by 2.1% in Quarter 1 2017.

UK consumer price inflation: May 2017

The Consumer Prices Index including owner occupiers' housing costs (CPIH, not a National Statistic) 12-month inflation rate was 2.7% in May 2017, up from 2.6% in April.

The rate has been steadily increasing following a period of relatively low inflation in 2015 and is at its highest since April 2012.

Rising prices for recreational and cultural goods and services (particularly games, toys and hobbies) was the main contributor to the increase in the rate.

UK house price index: Apr 2017

Average house prices in the UK have increased by 5.6% in the year to April 2017 (up from 4.5% in the year to March 2017). While up against March 2017, there has been a general slowdown in the annual growth rate since mid-2016.

 The average UK house price was £220,000 in April 2017. This is £12,000 higher than in April 2016 and £3,000 higher than last month.

Prices economic commentary: June 2017

The supply chains for a range of products manufactured in the UK, including motor vehicles, became more import-intensive between 2010 and 2013 – leading to input prices more closely reflecting movements in the sterling effective exchange rate for these products compared with less import-intensive products.

Falls in property transaction volumes in London in particular are feeding through into lower average house price growth.

Commenting on today's inflation figures, ONS Deputy National Statistician Jonathan Athow said: 

inflation quote 13 june

People, population and community

Deaths registered in England and Wales, provisional: week ending 2 June 2017

The provisional number of deaths registered in England and Wales in the week ending 2 June 2017 (week 22) was 8,332; this represents a decrease of 1,708 deaths registered in comparison with the previous week (week 21).

The average number of deaths for the corresponding week over the previous 5 years was 8,417.

The decrease in the deaths registered in the week ending 2 June 2017 is likely to be due to the closure of register offices over the spring bank holiday. This pattern is similar to previous years.


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Brexit weekly briefing: shock election result means new negotiation calculus

EU Referendum Morning Briefing

Brexit weekly briefing: shock election result means new negotiation calculus

A weakened Theresa May will need support of political rivals, including those who support a softer Brexit

Theresa May
Theresa May is significantly weaker after the unexpected election result and is now reliant for her majority on Northern Ireland's DUP. Photograph: Toby Melville/Reuters

Jon Henley and Ian Walker


Welcome to the Guardian's weekly Brexit briefing, a summary of developments as the UK lurches towards the EU door marked exit. If you would like to receive it as a weekly early morning email, please sign up here.

You can listen to our latest Brexit Means podcast, updated every Wednesday, here. And with the general election approaching in the UK, you can also sign up to the Snap, our daily email election briefing, here.

Also: producing the Guardian's independent, in-depth journalism takes a lot of time and money. We do it because we believe our perspective matters – and it may well be your perspective too.

If you value our Brexit coverage, become a Guardian Supporter and help make our future more secure. Thank you.

The big picture

So many questions. Britain's shock election result has huge but unknowable Brexit consequences, with about the only thing most people seem to agree on being that it will now be very difficult for the government to pursue the kind of "clean break" with the EU that it was pushing for.

For the time being, the Brexit secretary, David Davis, is sticking manfully to the script, telling the BBC on Monday:

We've made pretty plain what we want to do. It's outside the single market but with access. It's outside the customs union but with a customs agreement. It's taking back control of our own laws and borders. Those things are fundamental.

But key elements of the new reality do seem – in contrast to earlier government acknowledgment that "taking back control" of its borders, laws and money means Britain cannot stay in the single market – to suggest it may end up doing so after all:

  • The election result has significantly weakened Theresa May and means she is unlikely to survive for long as prime minister and party leader – how long is a moot question.
  • However long she stays, she now needs the support of political rivals inside the Conservative party, including "pragmatists" such as the chancellor, Philip Hammond, who favour a softer Brexit.
  • The prime minister is also reliant for her majority on Northern Ireland's DUP, whose demand for a "frictionless border" with the Republic could necessitate staying in both the customs union and the single market.
  • The support of pro-European Scotland's cohort of new Conservative MPs will also be critical. Their newly powerful leader, Ruth Davidson, has already called on the government to pursue an "open" Brexit.
  • The so-called "Norway option" is back. Previously dropped because it requires free movement of people, this would see the UK retain full access to the single market by rejoining the European Free Trade Association (Efta).

Which is not, of course, to say that any of the above will happen. Other factors may prevail (and increase the chances of a car-crash Brexit), including:

In any event, it seems as though the start of Brexit talks – like the Queen's speech – may now well be delayed.

The view from Europe

Concretely, the election result changes little for the EU27: they still want to get on with it, they will still insist the UK respects their schedule of "divorce first, trade talks second", and their Brexit red lines remain unaffected – just as they would have if May had won a large majority.

Europe is worried, however, that a weakened prime minister will no longer be able to bring her party to compromises. Senior EU diplomats also say the election has magnified their uncertainty about what the UK really wants, as London has not sent Brussels a single position paper.

Several leaders and EU officials warned about delaying the start of the talks by too long, pointing out that the clock was already ticking on the two-year time period allowed for the article 50 divorce negotiations:

We don't know when Brexit talks start. We know when they must end. Do your best to avoid a "no deal" as result of "no negotiations". #GE2017

— Donald Tusk (@eucopresident) June 9, 2017

Others called the election a "disaster" and an "own goal" that would "make already complex negotiations even more difficult", and risked increasing the chances of the talks breaking down altogether.

Senior EU sources also said that if London insisted on talking about a free trade deal before the issues of the divorce bill, citizens' rights and the border in Ireland, the EU would take a year to draft a new mandate for its chief negotiator, Michel Barnier, in effect killing the negotiations.

Meanwhile, back in Westminster

As of this week, the political action is finally back in Westminster following the election campaign, as MPs return to the Commons – and in notably different political proportions to those that more or less everyone expected.

The 30 extra Labour MPs and 13 fewer Tories might be only a relatively small proportion of the entire 650-seat Commons, but it has dramatically transformed the political landscape.

Theresa May, who called the snap election in the expectation of winning a crushing majority, is instead hanging on to her job by her fingernails, and must placate furious – and no longer afraid – Conservative MPs with a more conciliatory style, and perhaps a tweaked platform of policies.

Already her two main advisers have departed, and a planned shake-up of May's cabinet instead became a tweak, not least as she no longer has the authority to remove any fellow big beasts. The vital pact with the DUP that will allow her to stay at No 10 has, moreover, yet to be sealed.

For Labour, the problems are more benign, and to look at Jeremy Corbyn's face you might never guess it was his party that, officially, lost the election. He has postponed a shakeup of his front bench, mainly to keep the media focus on the Conservatives' many problems.

Now suddenly seen as electable, the Labour leader has seen a few of Labour's previously critical heavyweights allow talk to happen about how they might consider a return to the shadow cabinet. A few might be given roles, but Corbyn is also believed to want to remain loyal to the MPs who stuck with him. Yes, it's a conundrum. But as a problem, it is one that May would love to have.

You should also know ...

Read these:

In The Guardian, Charles Grant of the Centre for European Reform thinktank is optimistic about a softer Brexit, arguing that May's crumbling authority offers a new chance for compromise:

The EU will make it clear that if you want more economic integration, you must give up sovereignty. In recent months they have grown increasingly frustrated with May, her team and the key Whitehall ministries, accusing them of being ill-prepared, lacking expertise and making too many unrealistic demands ... The 27 hope for a softer and more realistic British approach – whether they have to talk to May Mk II or a new prime minister. If the British oblige, the EU could scale back some of its demands, for example on money. And then a deal would become more likely.

On Project Syndicate, Ngaire Woods, dean of the Blavatnik school of government at Oxford University, offers negotiating tips for a weakened UK government, saying that thus far it has been too combative and too self-interested, and has created altogether unrealistic expectations:

May called the recent election because she wanted a stronger mandate to negotiate a good deal for her country. She didn't get it. Now more than ever, securing a deal will require shifting to a collaborative, outward-looking, and realistic negotiating strategy.

And in a brilliant essay in the New York Review of Books, Fintan O'Toole argues that this tumultuous election showed above all that the Brexit chickens were finally coming home to roost:

Brexit is a back-of-the-envelope proposition. Strip away the post-imperial make-believe and the Little England nostalgia, and there's almost nothing there, no clear sense of how a middling European country with little native industry can hope to thrive by cutting itself off from its biggest trading partner and most important political alliance …

The Brits want what they can't possibly have. They want everything to change and everything to go as before. They want an end to immigration – except for all the immigrants they need to run their economy and health service. They want it to be 1900, when Britain was a superpower and didn't have to make messy compromises with foreigners. To take power, May had to pretend that she, too, dreams these impossible dreams. And that led her to embrace a phoney populism in which the narrow and ambiguous majority who voted for Brexit under false pretences are be re-imagined as "the people" …

May's appeal to "the people" as a mystic entity came up against Corbyn's appeal to real people in their daily lives, longing not for a date with national destiny, but for a good school, a functioning National Health Service, and decent public transport. Phoney populism came up against a more genuine brand of anti-establishment radicalism that convinced the young and the marginalised that they had something to come out and vote for.

Tweet of the week

Ian Dunt on fighting form (thread):

We have no Brexit plan. We have no consensus, in either of the main parties, in parliament, or in the country, about what we want.

— Ian Dunt (@IanDunt) June 12, 2017
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