With the Brexit deadline fast approaching, the global market is looking for the UK parliament to reach a consensus on how the exit from the European Union will – or will not – take place.
On 8 January 2019, prime minister Theresa May experienced a further defeat when members of parliament voted for restricting HM Treasury’s powers to prepare for a ‘no-deal’ Brexit.
However, according to Karen Ward, chief market strategist for Emea at JP Morgan AM, a no-deal scenario would not be the worst outcome for the market and investors.
‘A solution for something that is impossible to solve’
“Worst case scenario to us isn’t no-deal, we don’t think there’s a majority in parliament and obviously the vote that we’ve seen overnight on the finance bill shows that there is a clear majority against no-deal.”
However, JP Morgan AM doesn’t believe in no-deal as an option still available to the British government.
“The worst-case scenario for us is that we extend article 50 and we go around this for another six months. You cannot square that circle,” Ward added.
“Prolonging this period and trying to find a solution for something that is impossible to solve is, I think, a complete waste of the time.”
Ward says that confidence has already weakened across the board and the UK is experiencing a lack on investment that would only keep going if article 50 were to be extended.
It would only be a matter of time before investors eventually choose other countries over the UK, Ward added.
