| What's happening? The U.K. charts its own course for financial services, and the Bank of England delivers a gloomy outlook.
Chancellor of the Exchequer Rishi Sunak indicated he's given up on an equivalence agreement for financial services with the European Union, leaving the U.K. to make its own way on regulation of the industry. Equivalence would have given U.K. banks and insurers wide-ranging access to the bloc, but the EU's effort to bolster its own financial sector make a deal unlikely. Bank of England Governor Andrew Bailey delivered a cautious outlook for the U.K. economy, urging policy makers not to overreact to what he said is likely to be a temporary jump in inflation. The pound weakened after the remarks, which suggested the central bank will give the economy time to recover before tightening monetary policy. Bailey warned that after a sharp rebound, the U.K. "will revert to the lower average underlying growth rates." In a boost for negotiators from Brussels and Britain — just hours before they were set to announce new arrangements on goods checks across the Irish Sea — a Belfast judge tossed out a lawsuit challenging the Northern Ireland Brexit protocol. Campaigners had contended that it was incompatible with the U.K.'s constitution. The two sides agreed to extend the grace period for trading rules so that the sale of chilled meats and fresh sausages into Northern Ireland from the rest of the U.K. isn't banned. That's cooling tensions in what the British media labeled the "sausage wars."  Pork sausages and beef burger patties are pictured for sale in the counter at McAtamney's butcher's shop in Ballymena, Northern Ireland Photographer: PAUL FAITH/AFP via Getty Images Speaking of grace periods, another spat over fishing rights was also shelved after Channel Island of Jersey allowed French vessels to fish in its waters for an extra three months. They had been due to comply with additional licensing requirements from Thursday, prompting the threat of a blockade of Jersey. Britain flexed its freedom from Brussels bureaucracy by announcing its post-Brexit subsidy plan. It promises "more agile and flexible" decisions on state aid than when the U.K. was in the EU. Business Secretary Kwasi Kwarteng said the new system will "create more jobs and make the U.K. the best possible place to start and grow a business." What's the big deal about state aid? Aoife White explains in this handy Quicktake explainer. — Lizzy Burden We aim to keep you up to date on how the U.K. navigates the world after Brexit. Got tips or feedback? Email us at beyondbrexit@bloomberg.net Chart of the Week Photographer: Burden, Lizzy Photographer: Burden, Lizzy A dearth of drivers in the U.K. food industry, in addition to labor shortages at farms, warehouses, pubs and restaurants, threatens to choke off the flow of goods. The problem started with Brexit, which capped inflows of low-paid workers from the EU. It escalated during the pandemic with thousands of people from the bloc leaving the U.K. Now, as the economy reopens, many of those workers seem in no rush to come back. Don't MissWant to keep up?You can follow us @Brexit on Twitter, and listen to Bloomberg Westminster every weekday. Share Beyond Brexit: Colleagues, friends and family can sign up here. For full EU coverage, try the Brussels Edition. Get More From BloombergYou can find all of our newsletters here, but here are some we think you'd particularly enjoy: Bloomberg is also tracking the progress of coronavirus vaccines and mapping the pandemic. Sign up here for our Coronavirus Daily newsletter and here for our podcast. Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and expert analysis. | 
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