With just a week remaining, Theresa May has her work cut out in order to win over critics of her Brexit deal as MPs vote on the 15th of January on the withdrawal agreement. A further setback occurred this Tuesday with a group of cross-party MPs launching a successful bid to block a no-deal exit from the EU. A further blow was added on Wednesday as MPs voted that an alternative back up plan must be provided within the next 3 days as opposed to the expected 21 days. While this is a blow for Theresa May’s government, a backup plan may help reduce concerns of Business chiefs and investors who fear leaving the EU without a deal would slow trade, spook financial markets and dislocate supply chains for the world’s fifth-largest economy.
With such an important decision looming and a large cloud of uncertainty the UK market and GBP is due for a skittish response, providing an opportunity to review the current UK economy and the standpoint of other firms preparing for the decision on January 15th.
British productivity growth slowed to a two-year low during the three months to last September, official figures showed on Wednesday, reinforcing concerns about the underlying health of the economy ahead of Brexit.
EY financial services’ Brexit Tracker said 20 companies had announced plans to transfer assets – chiefly client cash and investments such as stock and bond holdings – out of London before 29th March. The move could total up to £800bn worth of assets. With Banking, Pharmaceuticals, Airlines and Insurance the most at risk market sectors, these companies have been and will continue preparing for what is to come in the weeks and months ahead. This provides a speculative opportunity dependant on what deal Theresa May is able to get her Government to agree on. On the counter side of this the market sectors which look to be least affected by Brexit are Mining and tobacco as most producers are already based outside of the UK with minimal assets in the UK to be affected.
Robert Kaars Sijpesteijn
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