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Britain, Switzerland agree on post-Brexit trade

By - Feb 11,2019 - Last updated at Feb 11,2019

Britain's Secretary of State for International Trade Liam Fox talks to Swiss Economy Minister Guy Parmelin after signing a bilateral agreement to continue trading on preferential terms after Brexit in Bern, Switzerland, on Monday (Reuters photo)

BERN, Switzerland — Britain and Switzerland signed a deal on Monday to preserve trade relations between the two countries even if London opts to leave the European Union without a deal with Brussels. 

British International Trade Secretary Liam Fox and Swiss Economy Minister Guy Parmelin signed the bilateral trade agreement in Bern on Monday.

"This new agreement lays the foundations for the two parties to continue their sound economic and trade relations once the United Kingdom has left the EU," the Swiss government said in a statement.

Switzerland is not a member of the EU, but its relations with Britain are based on a long line of bilateral agreements between Bern and the bloc.

If London and Brussels manage to reach a deal for an orderly Brexit, the bilateral agreements between Switzerland and the EU will continue to apply to Britain until the end of the transition period, the statement said.

But in the case of a "no-deal" Brexit, those agreements will no longer apply to Swiss-British relations and the new bilateral trade agreement between the two countries will kick in.

"Should the United Kingdom leave the EU on 29 March without a deal, the agreement will come into effect on a provisional basis from 30 March 2019," the government statement said.

Britain is currently one of Switzerland's biggest trading partners.

In 2017, Switzerland registered 11.4 billion Swiss francs ($11.4 billion, 10.1 billion euros) in exports to Britain, making it the wealthy Alpine nation's sixth largest export market. 

Switzerland, meanwhile, is Britain's fifth biggest export partner outside the EU.

The Swiss government is pursuing a strategy dubbed "Mind the Gap", which is intended to stabilise British ties after Brexit.

It said it had reached a range of agreements with London aimed at ensuring "that the existing mutual rights and obligations in its relationship with the UK will continue to apply as far as possible after the UK leaves the EU, and to expand them in certain areas”.

Switzerland and Britain have already signed agreements shoring up their cooperation in the areas of road transport, air transport and insurance.

They have also signed a deal to preserve the rights of some 43,000 British nationals living in Switzerland and the 35,000 Swiss residing in Britain after Brexit.

US team in Beijing for trade talks after IMF ‘storm’ warning

By - Feb 11,2019 - Last updated at Feb 11,2019

The head of the US trade delegation Jeffrey Gerrish arrives at a hotel after talks with Chinese officials in Beijing, China, on Monday (Reuters photo)

BEIJING — US negotiators met with their Chinese counterparts in Beijing on Monday for a new round of high-stakes trade talks, hoping to reach a deal before the March 1 deadline set by US President Donald Trump. 

The meeting comes as the International Monetary Fund (IMF) has warned of a possible global economic "storm".

Preliminary discussions had been expected to start on Monday, according to the White House, before US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin step in for the main event on Thursday and Friday. 

In December, Washington suspended for three months its plan to increase tariffs on $200 billion worth of Chinese imports — to 25 per cent from the current 10 per cent — to allow time for negotiators to work out a trade spat that has triggered fears of a global economic slowdown.

Deputy trade representative Jeffrey Gerrish was due to lead the US delegation in preparatory meetings to begin on Monday, the White House had said.

The talks will include officials from the agriculture, energy and commerce departments.

Gerrish left his hotel in central Beijing on Monday morning without talking to the media.

Mnuchin and Lighthizer will be joined by David Malpass, Trump's nominee for president of the World Bank who has worked to limit the bank's assistance to Beijing. 

The Chinese delegation will be led by Vice Premier Liu He, who will be joined by central bank governor Yi Gang.

Liu, China's chief trade negotiator, met last month with Trump, who announced that a final resolution of the trade dispute would depend on a meeting with Chinese President Xi Jinping "in the near future" to iron out the "more difficult points" fuelling the spat. 

While the two sides said major progress was made after talks last month in Washington, more recent comments have jarred financial markets, amplifying concerns about how the dispute will affect global growth.

Trump said last week that he did not expect to meet his Chinese counterpart before the trade truce expires on March 1, and top White House economic adviser Larry Kudlow said that while Trump was "optimistic" about a deal, a "sizable distance" still separated the two sides.

Washington is demanding far-reaching changes from China to address commercial practices that it says are deeply unfair, including theft of American intellectual property and myriad of barriers that US and other foreign companies face in the Chinese domestic market.

China has offered to boost its purchases of US goods during the truce, but is likely to resist calls for structural changes to its industrial policy including slashing government subsidies, said Louis Kuijs of Oxford Economics.

"The US side will not fully remove the spectre of tariff hikes any time soon," Kuijs said, given that there is "broad support in the US for a hard stance on China".

The two sides have already slapped tariffs on more than $360 billion in two-way trade, which has weighed on the two countries' manufacturing sectors and sent jitters through global markets.

 

 Economic storm 

 

The International Monetary Fund warned on Sunday of a possible economic "storm" as growth forecasts dip.

It cited the trade row as one of four "clouds" over the global economy, along with financial tightening, Brexit uncertainty, and China's slowdown.

"We have no idea how it [the trade dispute] is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets," IMF managing director Christine Lagarde told the World Government Summit in Dubai.

Last month, the IMF lowered its global economic growth forecast for this year from 3.7 per cent to 3.5 per cent.

High-stakes US-China trade talks resume as deadline approaches

By - Feb 10,2019 - Last updated at Feb 10,2019

Containers are seen at the Yangshan Deep Water Port in Shanghai, China on April 24, 2018 (Reuters file photo)

WASHINGTON — With a March 1 deadline fast approaching, US and Chinese officials resume negotiations next week to prevent escalation of a trade dispute that has major implications for the global economy.

China’s economy already has shown signs of slowing, while the trade war has shaken the confidence of US businesses, as retaliatory tariffs have raised prices and helped choke off a key export market.

President Donald Trump’s strategy has failed to produce a reduction in the US trade deficit with China, which he set as a primary goal.

Under the looming threat of a surge in tariffs once the 90-day truce expires, financial markets worldwide have lost ground in recent days as comments about the status of the talks turned more cautious.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will lead the US delegation for the third round of talks on Thursday and Friday in Beijing.

While officials seemed optimistic after talks last week in Washington, more recent comments have jarred financial markets, amplifying concerns about how the dispute will affect global growth.

US President Donald Trump said on Thursday he did not expect to meet his Chinese counterpart Xi Jinping before a March 1 deadline for the two economic superpowers to reach a deal.

Trump had said final resolution of the trade dispute would depend on the meeting with Xi “in the near future” but told reporters it had not yet been arranged.

Also, top White House economist Larry Kudlow said that while Trump was “optimistic” about prospects for a deal, there remained a “sizable distance” separating the two sides.

 

Deadline extension? 

 

While China has offered to buy more US soybeans and beef, officials have yet even to agree on a draft of a deal that would address key US concerns, according to media reports.

Washington is demanding far-reaching changes from China to address unfair practices it says are deeply unfair, including theft of American intellectual property and the massive Chinese trade surplus.

The dispute has escalated to encompass $360 billion in trade between the two economic superpowers, and without an agreement by the start of March, the Trump administration is poised to more than double the punitive duties on $200 billion in Chinese goods.

However, amid pressure from the business community for the two sides to resolve the dispute, CNBC cited a senior administration official saying the March 1 deadline could be pushed back.

“Right now it is in place but that is right now,” the official told CNBC. “It could change via telephone.”

The White House said there would be a preparatory meeting of senior officials beginning February 11 and the talks would include officials from the agriculture, energy and commerce departments.

The main delegation also includes David Malpass, whom President Donald Trump has nominated to be president of the World Bank and who has worked to limit the bank’s assistance to Beijing.

However, strident White House China critic Peter Navarro was not listed as part of the US team.

World stocks poised for weekly loss; dollar firms again

Worries about global growth, trade tensions persist

By - Feb 09,2019 - Last updated at Feb 09,2019

A woman uses a mobile device near a board showing currency exchange rates of the US dollar, euro and the British pound against the rouble in Moscow, Russia, on January 21, 2016 (Reuters file photo)

By Lewis Krauskopf

NEW YORK — World stocks fell for a third straight day on Friday on pessimism about global economic growth and trade tensions, putting them on track for their first weekly drop this year, while the US dollar was on track for its biggest weekly gain since August.

MSCI's gauge of stocks across the globe shed 0.60 per cent on the day, and was set to fall for the week following six consecutive weekly increases.

Investors were digesting economic and trade developments from Thursday, when the European Commission sharply cut its forecast for eurozone growth this year and next and President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal. 

Thursday's trade developments "took off the table what the market was probably starting to price in, which was a resolution by March 1", said Anthony Saglimbene, global market strategist at Ameriprise Financial in Troy, Michigan. "It just adds to the fact that investors want some of these trade tensions off the front pages, and it doesn't look like we are going to get that."

Stocks pared some losses after a White House spokeswoman said US-China trade talks would resume next week in Beijing.

On Wall Street, the Dow Jones Industrial Average fell 155.79 points, or 0.62 per cent, to 25,013.74, the S&P 500 lost 9.31 points, or 0.34 per cent, to 2,696.74, and the Nasdaq Composite dropped 14.80 points, or 0.2 per cent, to 7,273.55.

Adding to the dour mood, analysts now expect first-quarter earnings for S&P 500 companies to decline 0.1 per cent from a year earlier, which would be the first such quarterly profit decline since 2016, according to IBES data from Refinitiv.

"The sentiment continues to be investor anxiety about US -China trade relations, the slowing global growth, and I think this week what is starting to really creep into investors' anxiety is around corporate earnings," said Michael Arone, chief investment strategist at State Street Global Advisers in Boston.

The pan-European STOXX 600 index lost 0.56 per cent.

The dollar edged higher against a basket of currencies, keeping it on track for its strongest weekly gain in six months, as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.

The dollar index rose 0.14 per cent, with the euro down 0.16 per cent to $1.1322.

"The rally that propelled the dollar broadly higher last year has enjoyed renewed life with US growth remaining solid while peers abroad lose momentum," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

US Treasury yields fell for a fourth straight session.

Benchmark US 10-year notes last rose 6/32 in price to yield 2.6339 per cent, from 2.654 per cent late on Thursday.

Oil prices were little changed on the day, but were heading for a weekly loss on renewed concerns about slowing global demand.

US crude rose 0.15 per cent to $52.72 per barrel and Brent was last at $62.07, up 0.71 per cent on the day.

Shares go weak as data disappoints, dollar extends power surge

By - Feb 07,2019 - Last updated at Feb 07,2019

A US five dollar note is seen in this illustration photo on June 1, 2017 (Reuters file photo)

LONDON — Mounting global growth worries thrust share markets into reverse on Thursday, while the dollar scored its longest winning run since a hot streak in early October that helped trigger a wave of worldwide “bear” markets.

Wall Street looked set to suffer back-to-back losses later after Europe had set the tone. 

Some poor earnings and weak data out of Germany ensured most of the main bourses were lower and kept MSCI's main index of world stocks in the red for a second day, too.

The extent of the current slowdown in the global economy was highlighted, as India unexpectedly cut its interest rates and the euro got hit to $1.1346 by Germany's fourth consecutive drop in industrial output.

That only compounded the 1.3 per cent the euro has lost over the last week and the tailwind behind the dollar, which has risen every day since Friday's strong US jobs data. It has also recovered almost all the losses suffered after the Federal Reserve all but abandoned plans for more rate hikes last month.

"Another day, another piece of terrible German data. EUR/USD risks a move to $1.1300," said ING's chief EMEA FX and interest rate strategist, Petr Krpata.

Elsewhere the pound was struggling near $1.29 again after the Bank of England kept rates on hold, while gloomy jobs data saw New Zealand's dollar suffer a similar flop as its Australian counterpart had seen the previous day. 

The kiwi slid to $0.6744, losing nearly 2 per cent in the past 24 hours, as investors wagered on the risk of a cut in interest rates there. New Zealand's central bank holds its first meeting of the year next week. 

Asian trading was still light overall though with China on holiday and no major economic data on the diary.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 per cent as it rose to its highest since early October. 

The index has risen steadily since early January as the US Federal Reserve changed its tune and emerging markets have surged more broadly after a torrid 2018.

Australia's benchmark stock index jumped 1.2 per cent amid expectations of easy monetary policy after the central bank chief shifted away from his previous tightening bias.

Japan's Nikkei slipped 0.6 per cent though and the caution quickly spread to Europe. 

London's FTSE was the only major bourse clinging to positive territory, helped by a weak pound, whereas the rest were down at least 0.6 per cent as were E-Mini futures for the S&P 500 and Dow. 

 

We are all doves now 

 

One of the day's big surprises came from India where its central bank unexpectedly lowered interest rates to 6.25 per cent to boost a slowing economy after a sharp slide in the inflation rate.

Italian bonds were back under pressure with the European Commission slashing its 2019 growth forecast.

Italy agreed a deficit target of 2.04 per cent in December, averting a major fall-out with the EU, though this was based on a growth assumption of 1 per cent. Slowing growth in Italy could make it harder for the country to remain within EU rules.

However, Benjamin Schroeder, rates strategist at ING, said he did not expect the EU to demand more fiscal tightening from Italy, should its forecasts be reduced.

"The EU has another thing to deal with — Brexit — and the other thing is do you want to infuse the campaign ahead of the parliamentary elections with this topic." 

The next major trigger for markets will more likely be any breakthrough in the US-Sino tariff talks when the two sides meet in Beijing next week.

US President Donald Trump offered little new to chew on in his State of the Union speech but Treasury Secretary Steven Mnuchin said on Wednesday he and other US officials will aim to clinch a deal next week to avert a March 2 increase in US tariffs on Chinese goods.

Probably more pressing though for the US markets is the threat of another government shutdown, Nick Twidale, an analyst at Rakuten Securities Australia said.

"With both sides of the house standing firm on the contentious border wall issue at present, and the deadline approaching swiftly on February 15, we could be back where we were just a few weeks ago." 

The broad dollar gains put pressure on gold, which eased to $1,303.96 per ounce, slipping further from last week's top of $1,326.30.

Oil prices eased too after US crude inventories rose and as production levels in the country held at record levels.

Brent crude futures slipped 23 cents to $62.46. U.S. crude eased 19 cents to $53.82 a barrel.

Aussie dollar goes down under as global slowdown forces RBA shift

State of Union address throws up no market surprises

By - Feb 06,2019 - Last updated at Feb 06,2019

US President Donald Trump arrives to deliver the State of the Union address at the US Capitol in Washington, DC, on Tuesday (AFP photo)

LONDON — The Australian dollar nosedived on Wednesday after its central bank opened the door to a possible rate cut, in yet another indication the global economic slowdown is persuading policymakers to go easy on rate hikes. 

World stocks too stalled just off two-month highs , undermined by the growth worries as well as US President Donald Trump's combative State of the Union address in which he unveiled no new policy initiatives. European shares traded marginally in the black and equity futures signalled a flat to weaker open on Wall Street.

Australia's central bank is only the latest to signal policy easing in the face of economic headwinds — the US Federal Reserve has all but abandoned plans for further rate hikes, while the European Central Bank also sounded less certain that it will start tightening policy later this year.

The U-turn pushed the Australian dollar 1.5 per cent lower, putting it on track for its biggest daily drop in a year. Australian short-dated bond yields were set for their biggest one-day drop in more than two years, down 10 basis points on the day.

"When I look at the global economy, Germany on is on the cusp of recession, Italy is in recession, Japan in on the cusp, the Chinese economy is seeing the lowest growth in three decades. The Fed had a look at the picture and said the world is slowing, it is maybe appropriate to pause," said Rhys Petheram, a fund manager in the multi-asset team at Jupiter Asset Management.

"I want to be more defensive in my allocation to risk," he added.

Wall Street finished strong on Tuesday and is now some 16 per cent off December lows but sentiment was knocked by the US president's failure in his annual speech to unveil new infrastructure plans. 

He also raised the possibility of another government shutdown should financing not be forthcoming for a US-Mexico border wall.

Futures indicated a weaker open on US stocks with the S&P and Nasdaq both down 0.1 per cent. 

European stocks, meanwhile, were undermined by the latest batch of earnings, which further underscored the weak local economy and the drag on companies from slower global trade.

Shares in BNP Paribas and carmaker Daimler slumped 1 per cent and 3 per cent respectively, ending the market's six-day rally. French-listed BNP Paribas lowered its profit and revenue growth targets for 2020 while Daimler's profits were hit by trade war and ballooning costs for developing electric and self-driving cars

Germany's DAX index lost 0.5 per cent.

 

Europe drags 

 

Europe's economic weakness prompted demand for bonds, with German 10-year government bond yields trading around 0.17 per cent, well off the 0.21 per cent highs hit on Tuesday. 

Investors have pushed back expectations that the European Central Bank will hike rates this year, a view reinforced after data showed German industrial orders fell on weak foreign demand in December.

Investors will also be looking to the European Commission's winter macroeconomic forecasts, due to be published on Wednesday or Thursday. Large downward revisions to growth and inflation are likely, many analysts predict. 

"The moderation of growth is so widespread it makes the ECB's job easier, as it was more difficult for them to justify their stance when Germany was leading the economic cycle while other countries were lagging growth," said Monica Defend, chief strategist and deputy head of research at Amundi.

The appetite for bonds also was evident in the 33 billion euros worth of orders investors had placed for Italy's new 30-year bond by 11:15 GMT.

Concerns for world growth fanned fears for global energy demand, hitting crude prices. Brent futures were trading around $61.59 a barrel.

On the Brexit front, sterling looked fragile at around $1.2951 after losing nearly 0.7 per cent on Tuesday when weak service sector data underscored damage to the economy from Brexit uncertainty.

Prime Minister Theresa May will travel to Brussels on Thursday to tell EU leaders they must accept legally binding changes to the Irish border arrangements of Britain's divorce deal or face a disorderly no-deal Brexit.

BP results, miners boost Britain's blue-chip share index

BP jumps 4.2 per cent after Q4 results

By - Feb 06,2019 - Last updated at Feb 06,2019

Anti-Brexit placards are set up on street furniture outside the Houses of Parliament in central London on Tuesday (AFP photo)

British blue chip shares hit their highest in more than two months on Tuesday after heavyweight BP doubled its annual profit and miners rallied on higher iron ore prices, feeding into an upbeat mood on global markets.

London's main index rose 1.1 per cent by 09:43 GMT, hitting levels not seen since December 3 and extending gains as sterling weakened.

The index of midcaps was more subdued, up just 0.1 per cent.

A dip in the pound generally boosts the main index, which earns a lion's share of its earnings abroad. All sectors on the FTSE 100 were in the black by 09:48 GMT.

Sterling's weakening, to near two-week lows, was not good news for domestically oriented companies, however, as it came in reaction to a survey showing dominant services sector firms reported job cuts for the first time in six years.

That signalled further risks to Britain's economy although retailers were lifted by data showing a pickup in consumer spending last month.

Asian markets extended gains on Tuesday as overnight strength on Wall Street and the US Federal Reserve's cautious turn supported appetite for riskier assets.

On Britain's main index, oil major BP gained 4.2 per cent — on course for its best day since September 2016 — after full-year numbers topped expectations.

Mining stocks hit their highest since late June last year after Brazil ordered top producer Vale to shut its tailings dams following the deadly incident last week, raising concerns about falling output. Singapore iron ore futures were up 3.4 per cent overnight.

Online retailer Ocado, among last year's best performing stocks, shed early losses to rise 1 per cent despite results showing investment hit earnings.

Drugmaker Indivior, however, sank as much as 25 per cent on news of a loss in its fight against generic competitors in a US court. 

Retail stocks were in favour as a survey showing British consumers picked up the pace of their shopping in January offered some respite to a sector that suffered its worst Christmas in a decade. Marks & Spencer was 1.2 per cent higher. 

Prime Minister Theresa May headed to Northern Ireland on Tuesday, promising to find a solution to the border issue at the centre of her Brexit headaches.

German Chancellor Angela Merkel on Monday called for a "creative" compromise to future Irish border arrangements on Monday and she said in Tokyo that there was "still time" for a solution.

Chief EU Negotiator Michel Barnier said the EU would not reopen its Brexit Withdrawal Agreement, but that alternatives to the controversial Irish backstop could be worked on after Britain leaves the bloc.

"We have been mercifully free of any Brexit discussion so far but the clock is ticking on that... I am not sure they see either side giving way which would make life a lot more difficult in the near term," said Chris Beauchamp, analyst at IG.

"I think we are having a calm before the storm which could easily start from next week."

If May fails to get parliament's approval for a revised deal on February 13, lawmakers will vote on next steps on February 14.

‘Countries cutting Polish beef imports after meat scare’

By - Feb 04,2019 - Last updated at Feb 04,2019

In this file photo taken on August 18, 2013, storks stand next to cows on a meadow near Warsaw (AFP photo)

WARSAW — Several countries have started to cut the amount of beef they import from Poland after a TV documentary showed an abattoir killing sick cows, the head of the meat producers lobby said on Monday.

An undercover reporter got a job in a slaughterhouse outside Warsaw and broadcast footage last month of ill animals being mistreated, killed and sent on for human consumption.

A team of inspectors from the European Commission arrived in Warsaw on Monday to investigate the reports, Poland's chief veterinarian told a news conference.

No countries had cancelled meat imports from Poland, the head of the Polish Meat Association, Witold Choinski, told reporters. "But many countries are limiting their imports," he added.

He did not name any countries or give details on the size of the cuts.

Poland produces about 560,000 tonnes of beef a year, 85 per cent of it for export. 

Poland's Agriculture Minister Jan Ardanowski said on Monday that one case had been "exaggerated to an unimaginable size" and now threatened the image of Polish meat and food worldwide. 

The separate Polish association of beef producers and breeders said on Monday that local beef prices had fallen sharply in recent days and, if the trend continued, Polish producers could lose as much as 600 million zlotys ($160.27 million) this year.

Non-Jordanian ownership at the ASE reaches 51.6%

By - Feb 04,2019 - Last updated at Feb 04,2019

AMMAN — The total value of shares bought by non-Jordanian investors in January was JD26.3 million, representing 29 per cent of the overall trading value, while the value of shares sold by the same bracket amounted to JD 26.1 million, according to the ASE website.

Subsequently, net non-Jordanian investment in January reflected an increase by JD0.2 million, compared with a decrease by JD7.3 million during the same month of 2018. 

Arab investors’ purchases during the first month of this year totalled JD5.4 million, or 20.7 per cent of the overall purchases by non-Jordanians, while the value of non-Arab purchases amounted to JD20.9 million, constituting 79.3 per cent of the total purchases. 

Arab investors’ sales amounted to JD22.9 million, 87.8 per cent of non-Jordanians total sales, while the value of non-Arab sales amounted to JD3.2 million, representing 12.2 per cent of the total sales by non-Jordanians.

Non-Jordanian investors' ownership in companies listed at the ASE by the end of January represented 51.6 per cent of the total market value, 36.8 per cent for Arab investors and 14.8 per cent for non-Arab investors.

At the sector level, the non-Jordanian ownership in the financial sector is 56.2 per cent, while in the service sector, it is 18.3 per cent, and in the industrial sector is 61.9 per cent, according to the ASE website.

Nissan cancels investment plan for UK plant

Company’s decision comes at a time of uncertainty

By - Feb 03,2019 - Last updated at Feb 03,2019

In this photo taken on November 12, 2014, a ‘Check and Repair’ member of Nissan’s manufacturing staff (right) works in the ‘Trim and Chassis’ section of their Sunderland Plant in Sunderland, northeast England, on November 12, 2014 (AFP file photo)

LONDON — Japanese car manufacturer Nissan announced on Sunday it was cancelling plans to build its X-Trail SUV at its plant in northeast England despite Brexit assurances from the government, the Agence France Presse reported.

“While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future,” Nissan Europe Chairman Gianluca de Ficchy said in a statement.

“We appreciate this will be disappointing for our UK team and partners,” he added. “Our workforce in Sunderland has our full confidence.”

In 2016, the car giant announced that it planned to build the model at its plant in Sunderland, but will now assemble it instead at Nissan’s global production hub in Kyushu, Japan. 

“Other future models planned for Nissan Sunderland Plant — the next-generation Juke and Qashqai — are unaffected” by the decision, according to the statement.

The company said it had decided to shift investment away from the British plant, and towards developing vehicle technology.

“A model like X-Trail is manufactured in multiple locations globally, and can therefore be reevaluated based on changes to the business environment,” explained Hideyuki Sakamoto, Nissan’s executive vice president for manufacturing and supply chain management.

Local MP Bridget Phillipson, Tweeted that the reports “represent deeply troubling news for the northeast economy — So many jobs and livelihoods depend on Nissan’s success”.

The car giant is a major employer in the region, a former industrial powerhouse that has suffered decades of economic decline, and which voted heavily in favour of Brexit.

Labour MP Julie Elliott said Brexit had played an “inevitable role” in the decision, adding: “none of it is conducive to encouraging business investment in this country”.

Nissan employs almost 7,000 people at the Sunderland plant — its largest in Europe — which has produced cars since 1986.

Current production includes the LEAF electric car, which reached production of 46,989 units last year.

Other multinational giants, including, Airbus warned this week that British jobs could suffer in the event of an unfavourable outcome.

The scenario of Britain exiting the European Union without a “divorce” deal is becoming ever-more possible as the clock runs down the official departure date of March 29. 

The timing of the company’s announcement comes just two days after an EU-Japan free trade agreement kicked in, which includes the European Union’s commitment to removing tariffs of 10 per cent on imported Japanese cars, according to Reuters.

Many Japanese companies had long seen Britain as the gateway into Europe, after being encouraged to open factories in the country by former prime minister Margaret Thatcher but Brexit has thrown that into doubt, prompting consternation in Tokyo.

Sunday’s announcement also comes as the firm continues to deal with the fallout from the arrest of its former boss Carlos Ghosn, which has clouded the outlook for the automaking alliance between Nissan, Renault and Mitsubishi.

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