Brexit secretary David Davis has resigned from his Cabinet position on Sunday night, after saying he did not “believe” in Theresa May’s strategy. After nearly two years in his role, Davis tendered his resignation on Sunday saying that “the current trend of policy and tactics” was making it “look less and less likely” that the UK would leave the customs union and single market. In his letter, he added that he was “unpersuaded” that the government’s negotiating approach “will not just lead to further demands for concessions” from Brussels. He concluded by saying that “that the national interest requires a Secretary of State in my Department that is an enthusiastic believer in your approach, and not merely a reluctant conscript.” The resignation will come as a blow to Prime Minister Theresa May, possibly underscoring the lack of progress that has been made in negotiations since the vote in 2016. One or two of Davis’ junior ministers are expected to resign as well. Theresa May responded by thanking Davis for his service, but adding: “I do not agree with your characterisation of the policy we agreed at Cabinet on Friday.” Cabinet agreed a policy for progressing forward with the negotiations, which Davis said may “just lead to further demands for concession”.

An official report into the collapse of Carillion has shown “fundamental flaws” in the government’s approach to contracting. The report by the House of Commons public administration and constitutional affairs committee found that the government try to spend as little money as possible and force contractors to take high levels of financial risk. “It is staggering that the government has attempted to push risks that it does not understand on to contractors and has so misunderstood its costs,” said Sir Bernard Jenkin, who chairs the committee. “The Carillion crisis itself was well-managed, but it could happen again unless lessons are learned about risk and contract management and the strengths and weaknesses of the sector. Public trust requires that outsourcing better reflects public service values. The government must use this moment as an opportunity to learn how to effectively manage its contracts and relationship with the market,” he added. The report was published on Monday and found that has had to renegotiate over £120 million of contracts since 2016 in order to ensure the continuation of public services. Carillion collapsed in January under £1.5 billion worth of debt. The government refused to bail the construction company out. The group’s collapse means major construction projects, including the £335 million scheme to construct a new Royal Liverpool hospital, have been badly affected. The project has been put on hold until a new builder and funding can be allocated. A separate report in January blamed the collapse on Carillion’s “recklessness, hubris and greed.” A Cabinet Office spokesman has said that the government will respond to the most recent report. “The government is committed to ensuring a healthy and diverse marketplace of companies bidding for government contracts and we have recently announced a wide package of new measures to further improve how we work with our vendors,” said the spokesman.    

Mark Carney has warned Donald Trump that the escalating trade war will cost the world economically and damage the US most. The governor of the Bank of England said on Friday that further escalation would have serious consequences for global GDP and US growth could fall by up to five percent. Speaking in Newcastle, Carney said that the import tariffs imposed by the US and other countries were already slowing the global economy. “There is a growing possibility that trade uncertainty could crystallise the longstanding risks of a snap back in long-term interest rates, increased risk aversion and a general tightening in global financial conditions,” he said. Recent figures revealed by Carney showed that the American economy would suffer a 2.5 percent drop in GDP. The world economy would fall just over one percent. The hit to the UK would be “smaller, reflecting a greater exchange-rate driven boost to net exports”, he said. On Friday, the US imposed US tariffs on $34 billion (£25.7 billion) of Chinese goods. China shortly retaliated and imposed with a 25 percent tariff on US goods. Before the tariffs went through, China accused the US of “opening fire” on the world. Carney also hinted towards a rise in interest rates next month. “Domestically, the incoming data have given me greater confidence that the softness of UK activity in the first quarter was largely due to the weather, not the economic climate,” he said. “Overall, recent domestic data suggest the economy is evolving largely in line with the May Inflation Report projections, which see demand growing at rates slightly above those of supply and domestic cost pressures building. An ongoing tightening of monetary policy over the next few years would be appropriate.”