The view of Brexit from the Baltic

Earlier this month TheCityUK visited the Swedish capital Stockholm for meetings with our embassy, Swedish policymakers, locally-based members and the British-Swedish Chamber of Commerce.

Sweden's small but open economy is susceptible to changes in global trade. In recent months the Krona has tumbled and is approaching a low of 11SEK to the euro. Interest rates have been below zero since 2015, although the Riksbank has indicated it intends to raise them later this year or early next year.

As has often been the case with our European trips, Brexit dominated discussions. As in the UK, most Swedish stakeholders have given up trying to predict what may happen and are waiting for the political process to unfold.

Many of those we spoke to were concerned about the loss of the UK's voice at the EU table, with all stakeholders expressing regret at the UK's decision. The UK and Sweden voted together in 90% of issues at Council level.

Given the changes in the UK's Brexit proposal, there was a generally held view from those we met that the new UK government was looking to move further away from the EU market than the previous administration. This led to questions over what this would mean for services market access, despite no mention of services in the Withdrawal agreement and limited mentions in the Political Declaration.

The Swedish experience of bordering a non-EU country (Norway) was frequently raised, with varied perspectives on the issue. We met an MP whose rural border constituency benefited from proximity to a much richer neighbour, preventing the depopulation seen in other rural areas. However, on the whole, businesses expressed frustration with cross-border trade - there is a sense that after Russia, Norway is the most difficult country with which to do business.

The clear desire from the Swedes was that the future relationship with the UK will be as close as possible. There was agreement that services needed to take a more prominent role in the next phase of the negotiations, although there were some questions on why the UK government appeared not to have pushed harder for services, and particularly financial services, in the first phase of negotiations.

Across all meetings, there was also interest in continued recognition and enforcement of civil judicial judgements and we will be following up with a number of stakeholders on this point.

Beyond Brexit and the UK relationship with the EU, an interesting thread through a number of the conversations was the benefits that some see from having the UK as a distinct voice to advance a liberal agenda in global fora, particularly in the context of the WTO. The UK is seen as having the potential to bring US, Australia, New Zealand, Canada, EU together to drive forward reform and advance work on areas such as data.