Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements. We hope you will find this review to be of interest.
MPs secure no-deal Brexit veto…….
With less than four weeks until Brexit day, parliamentary gridlock means it remains unclear whether the UK will leave the EU as scheduled, or whether the Brexit process will be postponed, or even completed at all. Although the Prime Minister continues to state her commitment to leaving the EU as planned on 29 March, the chances of a delay in the process have increased significantly. Theresa May was once again forced to postpone a Commons vote on her deal, that had been scheduled for 27 February, after failing to secure any major concessions on the backstop from her EU counterparts, and it therefore became apparent that she still did not command sufficient parliamentary support for her deal. The Prime Minister was then forced to accept MPs’ demands for a vote on delaying Brexit if the House of Commons rejects both her deal and no-deal. A second ‘meaningful vote’ on her EU Withdrawal Agreement will now take place by 12 March – just 17 days before the UK’s scheduled EU departure – with a further vote between no-deal or delay following, if the bill is rejected again. Any request from the UK government to delay Brexit would require EU
approval. And it is unclear whether the EU bloc would sanction such a request unless the parliamentary impasse had been broken and a clear path forward had emerged. Meanwhile, Labour Leader Jeremy Corbyn has said he will now back a second EU referendum. This policy reversal came after his alternative Brexit plan – which focused on the UK joining an EU customs union –once again suffered a Commons defeat. While the likelihood of the UK leaving the EU without a deal on 29 March has certainly diminished, it remains distinctly unclear what the ultimate outcome to the Brexit process will be. At the moment, there appears to be no parliamentary majority for any one course of action and, until one emerges, any outcome would still appear possible.
MPs SFFS Economic Review_Feb 19