(Bloomberg) — Boris Johnson’s inflammatory rhetoric against his Brexit opponents is damping hopes of a divorce agreement with the European Union. But the government is not backing down, again calling the law to block a no-deal divorce from the bloc a “surrender act” on Friday.Read more: EU Is Losing Faith in Johnson’s Ability to Bridge Brexit GulfIn Belfast, the government won an appeal court ruling in a case to determine whether a no-deal Brexit would threaten the Good Friday peace accord.Key Developments:Northern Ireland Court of Appeal rules in U.K. government’s favorBrexit Secretary Steve Barclay meets EU’s chief negotiator Michel Barnier in BrusselsInternational Development Secretary Alok Sharma said the Benn law blocking a no-deal Brexit is a “form of capitulation”Japanese Firm Blames Brexit for U.K. Closure (11:45 a.m.)Some more evidence of the toll Brexit is taking on businesses: Japanese manufacturer Senju Metal Industry Co. said in a filing it closed its U.K. factory in June and moved production to the Czech Republic due to pressure from its European customers.Even Smooth Brexit May Need Rate Cut: Saunders (10:30 a.m.)The Bank of England may have to cut interest rates even if the U.K. avoids a no-deal Brexit, according to policy maker Michael Saunders. His argument is that Brexit uncertainties are likely to continue to depress growth even if the departure from the European Union is smooth, delayed or eventually canceled, especially if that is accompanied by a weaker global outlook.Separately, Bloomberg Economics now sees a no-deal Brexit early next year as its most likely scenario, which will drag the U.K. into a recession and push inflation higher. BE’s new report forecasts a drop in the pound and higher trade tariffs lifting inflation to 2.8% — above the Bank of England’s 2% target.Victory for Johnson in Belfast Court (9:55 a.m.)A Northern Irish court handed Prime Minister Boris Johnson a much-needed legal victory, throwing out a lawsuit that wanted a no-deal Brexit declared a violation of the Good Friday peace accord.The Appeals Court in Belfast upheld a lower court ruling that the peace accord is a purely political matter. The opinion is a boost for Johnson after the U.K. Supreme Court in London ruled this month his plan to suspend Parliament in the run up to the Oct. 31 Brexit deadline was an unlawful abuse of power.Sharma: ‘Surrender’ Accurate to Describe Brexit Law (Earlier)International Development Secretary Alok Sharma said calling a law to block a no-deal Brexit on Oct. 31 the “surrender act” accurately reflects its impact on the government as it negotiates with the European Union.“It does surrender our ability to have effective discussions with the European Union and it does surrender our ability to be able to walk away from the table if that is what happens,” Sharma told BBC Radio 4 on Friday. “If you were going into a negotiation with both hands tied behind your back, would you not think it somehow a form of capitulation?”Sticking to the government’s line from the last few days, Sharma refused to explain the apparent incompatibility between adhering to the law on Brexit and Boris Johnson’s repeated statements that the U.K. will leave the EU on Oct. 31 with or without a deal.“We are absolutely going to comply with the law, we are working incredibly hard to get a deal and we will be leaving on October 31,” he said.Drug Suppliers Not Ready for No Deal: Watchdog (Earlier)Medicine suppliers are less prepared for a no-deal Brexit now than they were in the run up to the original deadline for leaving the European Union, the government’s spending watchdog said.By Sept. 20, pharmaceutical companies surveyed by the Department for Health had sufficient stockpiles for 72% of medicine product lines, the National Audit Office found in its report published Friday.Earlier:EU Is Losing Faith in Johnson’s Ability to Bridge Brexit GulfTension Boils Over as A Deal Remains Elusive: Brexit BulletinDrug Suppliers Not Ready for No-Deal Brexit, Says U.K. WatchdogNo-Deal Brexit in 2020 Seen Dragging U.K. Economy Into Recession–With assistance from David Goodman and Joe Mayes.To contact the reporters on this story: Peter Flanagan in Dublin at [email protected];Dara Doyle in Dublin at [email protected] contact the editors responsible for this story: Tim Ross at [email protected], Stuart Biggs, Thomas PennyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
