UK's Hammond says economy should be priority in Brexit talks

British Prime Minister Theresa May. | Stegan Rousseau  AFP via Getty Images

After intensive talks on the start date, the negotiations will go ahead as planned by the European Union, two days before the programme of British prime minister Theresa May's new cabinet will be set out in the Queen's speech on Wednesday (21 June).

Britain's historic decision to leave the 28-nation bloc has sent shockwaves through the political and economic fabric of the nation.

Later next week, Barnier will debrief the EU 27 leaders on the first round of talks, who will in Brussels for the traditional June EU summit.

Brexit negotiators will discuss Monday Britain's financial obligations to the European Union as the long, complicated and potentially perilous process of the United Kingdom leaving the bloc finally gets underway.

The Brexit discussions are due to begin on Monday when the British minister in charge of the process, David Davis, meets the EU's chief negotiator, Michel Barnier, in Brussels.

He wouldn't be drawn on whether he supported Britain's continued membership in the single market and said Prime Minister Theresa May's minority government will negotiate in a "pragmatic" manner, striving for a solution that works for both sides.

May gambled that a strong election win, as forecast by some pollsters, would boost her majority in the House of Commons in time for the Brexit talks, but instead, her party surrendered 13 seats in the lower chamber.

The government's plan for the next parliament will be outlined in the Queen's speech on Wednesday, and will include laws needed to deliver Brexit and new immigration legislation.

If Peston's source is reliable, however, it seems the "Soft Brexit" faction have lost crucial leverage.

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Brussels has been insistent that a new trade deal can not be discussed until after Britain has left the existing one.

She told BBC One's Sunday Politics: "Where you have politicians right across the European Union and the United Kingdom who share the desire for a successful outcome, with low tariffs, zero non-tariff barriers, free trade between ourselves, co-operation on security and so on, it should be perfectly possible to meet the time frame".

The Chancellor also said he would have liked to have been allowed to play a bigger part in the general election campaign, and that the campaign should have had a much greater focus on the economy.

Prime Minister May wants to negotiate the divorce and the future trading relationship with the European Union before Britain leaves in March 2019, followed by what she calls a phased implementation process to give business time to prepare for the impact of Brexit.

"It is indeed our understanding that the agenda of the first negotiation round consists of issues related to the first phase of negotiations, which means citizens, money, Northern Ireland and some other exit-related questions", one diplomat said.

The first issue at the Brussels talks will be the status of millions of European Union citizens living in the United Kingdom and British residents of the other 27 countries, including their right to stay, to work, and to access medical care.

"It is good that the British government thinks about the rights of European Union citizens in Great Britain", Verhofstadt said.

And Hammond described the divorce bill figures being bandied around in Brussels as "the most egregious pre-negotiation posturing".

But May's attempt to increase her majority in parliament were dashed and has weakened the government's negotiating position, with many arguing that May will have to take a softer stance and potentially seek some sort of access to the EU's single market.

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