In the run up to our exit planned for 29 March 2019 the EU passed a  number of measures to ensure continuity if the UK left without signing the Withdrawal Treaty. Measures included an aviation agreement to ensure the planes fly, a haulage agreement to allow road transport to continue, a rail agreement, “legal certainty for ship operators”, compensation for EU fishing businesses if they lose access to UK waters, continuity for students currently in the Erasmus programme, and more time for the Peace and Interreg programmes for Ireland and Northern Ireland.

In the update produced for the recent EU Council they also noted that rights of UK citizens currently legally settled in the rest of the EU will be protected. They are ensuring medicines  and Reach approved chemicals can continue to be traded, and have increased customs capacity at UK facing ports and transport centres to handle any need to introduce tariffs.

This of course all goes largely unreported by the Remain facing UK media, who carry on with silly scare stories based on an imaginary exit with none of these agreements in place.

The Monetary Policy Committee is struggling. It perseveres with an out of date notion of national capacity, thinks it can judge where we are against it, and then threatens us with interest rate rises and more monetary tightening if it thinks we are at or near capacity. They have been saying for some time that we will get too close to capacity within the next two years and that therefore they need to tighten money to avoid too large an increase in wages and prices. They point towards a further 25bp rate rise after the two so far since the low point.

This month they accept that they have slowed the economy more than their previous forecast, and they accept we may stay below their idea of capacity going forward. Despite this they say they want to tighten consumer credit more, and think the next change in rates will be upwards. This comes at a time of world slowdown, with a nasty manufacturing recession on the continent and elsewhere. The Fed, the ECB and the Chinese Central Bank are all talking of relaxation or additional stimulus owing to the world slowdown and car industry meltdown.

The old Bank of England  forecast said they wanted “an ongoing tightening of  monetary policy over the forecast period”. The slightly lower forecast of growth this time round makes that less clear. Core inflation was just 1.7% in May, below the symmetric 2% target. They have halved the rate of consumer credit growth since 2016 by FPC action, hitting car loans hard and now wanting to curb credit card debt more as well. They now say 2019 growth could be ” a little below its potential” yet want to do nothing to correct that.

It appears the Bank is out of step with the rest of the world and the reality of the world economy and markets. The Bank says it stands ready to move rates either way in the event of a kind of Brexit it does not expect. None of this is quantified or precise and seems to be another case of the Bank adopting a stance from a pro Remain standpoint, like all those wildly too pessimistic forecasts it made for 2016 – 18 prior to the referendum vote.

UK capacity is augmented daily by big imports of things we cannot make or grow for ourselves, and our workforce is constantly being increased by inward migration. The Bank’s forecasting model needs to take better account of that. Many in the markets do not  believe the UK can hike rates when the rest of the advanced world is going the other way. The Fed had a row with the market view that rates had to come down late last year, and lost.

The Governor of the Bank of England tells us we cannot escape tariffs by offering to negotiate a free  trade agreement. If the EU agrees to free trade talks as we leave the EU then we can.

Gatt is a Treaty designed to promote ever freer trade. Article 24 allows members of Gatt – now the WTO – to negotiate free trade agreements with each other that go further than the trade liberalisation and tariff reduction offered to all other members by the states concerned. The two states must not seek to raise barriers with others as a result of proposing a Free Trade Agreement between themselves. The aim   “should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such countries”

The only requirement to gain GATT approval for having no tariffs on each other’s trade whilst in negotiation is that the two states or customs unions must agree ” a plan and a schedule for the foundation of such a free trade area within a reasonable length of time”.

I have tweeted about this today and will write a considered piece for tomorrow.

As predicted the Conservative party has a clear choice to make between the two remaining leadership contenders.

I am pleased it is Mr Hunt and not Mr Gove in the final. If it had been Mr Gove the media would have had a month of re running all that Mr Gove said and did to stop Mr Johnson running the previous time,  trying to make it into a bitter personal feud whatever the candidates wanted. This  would have got in  the way of a serious debate about the future of our country and its democracy.

The Johnson campaign made clear yesterday to supporters like me  it did not want Johnson voters voting tactically to influence who was second. I continued to vote for Boris.

The media and the Remain MPs are stuck in their own rhetorical canyon, ignoring the wider public and trying to prevent intelligent debate about the opportunities for the UK once liberated from the EU. The BBC is particularly bad. Either it does not invite someone on who wants to put a positive case for the decision of the voters on the EU, or it interrupts and hectors us  around the tired and extreme language of the Remain campaign. Voters did not believe  the idea of the cliff edge or the cataclysm, and  rejected the forecasts of the economic damage Remain wrongly put out  3 years ago. Despite this the media and their chosen MPs and business interlocutors go on as if it were true and as if they did not lose the vote on his topic. The shambles of a Conservative  leadership debate they created has been roundly condemned. The BBC has yet to explain its excessive puffing of Mr Stewart’s candidature who came well below three of the other candidates in each round he fought and was never going to get many MP votes given his absurd position on the EU issue. Why did the BBC suggest he was the likely opponent of Boris when he ended with just 27 votes out of a maximum 313.

I have never once heard a BBC interviewer ask a Remain MP or advocate why they want to giveaway £39bn we do not owe. It is a rare interview indeed which asks anyone about how we might spend all that money if we do not send it to the EU. The topic on our borders is always threats to EU citizens living in the UK where the government has always been clear they can stay. Rarely are we asked about what a globally fair UK migration policy would look like. Interviews are conducted on trade and tariffs without any understanding that the UK will decide how big a tariff to impose on imports, and with no knowledge that the UK has already set out a low tariff schedule for exit. There are no interviews with farmers to explore how much more of our food we can grow at home if tariffs are placed  on to continental produce. There are no explorations of what joining the TPP free trade area might mean for the UK. We are told that any trade deal with the US would mean compulsory eating of chlorine washed chicken, as if we had to agree to its entry and then had to buy it! There is no mention of chlorine in our domestic water  or chlorine washed EU salads.

Meanwhile the Leave majority just shouts back “Get on with it.” The media who seek to thwart us will lose more audience as a result of their craven servitude to the EU government. The more they shove out the Remain and EU spin lines, the more many voters think they do not speak for them. If they want to show they are better edited and disciplined than social media, they need to return to being fair and balanced, and to accept there are many sensible people saying there  is a great future for the UK outside the EU, as we voted for.

In the muddle of the tv debate on Tuesday there were three positions advanced on how to get out of the EU, and effectively three positions on when to get out.

Mr Stewart argued that Parliament had to pass the Withdrawal treaty it has thrice rejected. That looks very unlikely. In default of that he invented all sorts of new processes which would entail a long delay in exit. HIs further consultation with the public might well be designed to move towards a  second referendum or some other way to stop Brexit altogether.

Messrs Hunt, Javid and Gove argued there had to be a renegotiation, with efforts at least to remove the backstop from the current Withdrawal treaty. It is difficult to believe any of this. The EU has made clear they do not intend to re open the Withdrawal Treaty issues. Changing the Political declaration would not change the backstop or any of the other bad features of the draft Treaty. There is no obvious authority to negotiate with before the new Commission is formed. It seems impossible for a new PM to engage in talks, get meaningful changes to the Treaty and put it through Parliament before October 31. Two of the three countenanced a short delay to get an agreement, with Mr Gove favouring a delay until  end December 2019.

Mr Johnson insisted on exit on 31 October. He has in mind offering a free trade deal to the EU. If they will agree to talks on such a proposition then the UK need not impose any new tariffs on them as we leave, nor them on us. Under GATT 24 there would be ample time to discuss the Free Trade Agreement whilst continuing to trade without tariffs whilst doing so. If the  EU refuses to discuss a Free Trade Agreement then we leave without a deal and impose the same tariffs on the EU as we impose on everyone else. They do the same to us. The EU has always said they are interested in a free trade agreement but it has to be negotiated after we have left.

The elimination of only one  contender drags out the contest a bit longer. The contest anyway has become  a race for second place, to see who would be best to go up against Boris in the  lengthier phase of the contest appealing to the members in the country. I think a Johnson/Hunt contest would be best.

It was unfortunate that Rory Stewart wishes to turn the contest into a re run of the referendum, in denial of the clear stance for Brexit all Conservatives put to the electorate in order to become MPs in 2017. He studiously avoided even contacting many Conservative MPs he knew to be committed to our 2017 promises, preferring to attract the support and good wishes of the media, especially the BBC, and sections of  the general public  wanting a second referendum. He then claims he could get the completely unacceptable Withdrawal Treaty through the Commons after its three big defeats.

The contest has had an unreal air for another reason. Several of the candidates claimed they could renegotiate the Withdrawal Agreement in time for  our exit on 31 October. There has  never been any glimmer of reason to suppose the EU would enter deep and serious talks about rewriting the Agreement, or that such work could be completed between the end of July and the end of September allowing time to ratify the Agreement by both sides.

The BBC debate was dreadful. It was set up  and chaired badly so we learned little. There was no wish  to allow or require a serious discussion of the major issues facing the country. Boris was constantly interrupted by the presenter and the BBC pursued its agenda to make sure the candidates could not discuss the great opportunities that follow if we just get on and leave.

The Foreign Press event about my book “We don’t believe you” may not allow the public tickets we now learn. I will keep you posted if the press relents over wider public access to the event on  24 June

Owing to strong demand I have arranged a new  presentation and event with Politeia for 2 July at lunch time at the Oxford and Cambridge Club, Pall Mall. They can help you with tickets on 0207 799 5034. This will help those who were too late for tickets for the IEA. It will be a different talk with a  panel to follow up interesting and topical issues.

The Fed realised late last year it was raising rates too much and tightening the money supply too severely. It backed off and announced a re think. It is currently working its way through how it can change its approach and make it friendlier to economic growth.

The Bank of England needs to do the same., It has been tightening too much for the last two years. Like the Fed, it relies on out of date theory based around the concept of national capacity. It thinks it knows what national capacity is, and argues that there will be inflation when we reach close to that capacity. For an open economy like the UK it is an odd way of thinking about it. We import goods and services and we import labour so our capacity is not constrained by UK resources, whilst world products, services and labour keep prices and wages down as a result of  global competitive pressures.

The Bank seems to want to prove a point about its errant pessimistic forecasts over Brexit. It should listen to what the Fed is saying, and back off from its current over tightening. The UK economy needs a bit more Bank flexibility at a time of slowing world growth and little inflationary pressure. They need to revise their views on how to settle interest rates, in line with the Governor’s lecture explaining  h0w the Phillips curve was now flat . Given this there is little need to raise rates as unemployment falls unless there are other signs of overheating or too much credit.