Five Brexit scenarios for investors to chew over
By Kristen McGachey, 21 Jun 17
Brexit negotiations are officially underway. But what’s the final Brexit going to be – hard, soft, wobbly, red white and blue? Or will the UK economy simply plunge off the cliff edge? Investors weigh in.
Then, of course, there’s the possibility that Article 50 could be revoked altogether, putting an end to the UK’s divorce proceedings from the EU.
While at this early stage in the negotiations said scenario seems more like wishful thinking than anything else, 7IM envisions a situation in which it could happen.
If the surprise general election result were to make it politically, economically and bureaucratically expedient to soften the UK government’s stance on Brexit, negotiations with the EU target minimal disruption, and the UK economic slowdown persists, it is conceivable that the British public might renege on its original verdict, speculated the investment manager.
This disagrees with the latest YouGov poll, which revealed that 70% of Brits believe that Brexit must be enacted, with the group being split between the 44% that actually want it and 26% who don’t back it but think the government has a duty to push on.
However, according to another YouGov poll, over 36% of Brits believe that the general election result will make a bad deal more likely so they could be open to suggestion.
Societe Generale’s “long-held view has been that the talks will go badly and that the UK will be surprised by just how awful the deal turns out to be,” said Hilliard.
On that basis, there is a chance that parliament will not approve the final incarnation of the deal, or more likely “during the flow of Brexit legislation through parliament (some papers talk of up to 15 bills), the government is defeated at some stage,” he said.
But, revoking Article 50 could require another election or referendum to endorse, he added.
Tags: Brexit | Investment Strategy
