Tristán de Borbón (London) | On March 2 the British government started to negotiate a free trade agreement with the EU… and to set out its goals for an agreement with the USA. A strategy that puzzles analysts.
JP Marín-Arrese | Those betting Brexit would take a heavy toll on Britain, discover much to their surprise that the EU stands as the first collateral casualty. The vacuum left in the budget by the UK departure has fuelled bitter acrimony between the Member States, especially in those receiving large amounts of Community money, like Spain. Its PM Sánchez has described the proposal tabled by the Council Chair as deeply disappointing.
Political uncertainty about the Brexit procedure caused the United Kingdom’s (UK’s) gross domestic product (GDP) to stagnate in the fourth quarter of 2019. However, the strong decrease in political uncertainty since the 12 December parliamentary election should allow the UK economy to rebound back to growth during the first quarter of this year, explains Janwillem Acket, chief economist at Julius Baer.
The chances of “getting Brexit done” reasonably quickly and smoothly have never been better.
Allianz GI / Victory for Prime Minister Boris Johnson’s Conservative party in the UK general election is likely to be welcomed by markets and potentially boosts prospects for the UK economy. It doesn’t, however, end the Brexit uncertainty overnight – and the UK continues to be vulnerable to a late-cycle global environment.
David A. Meier (Julius Baer) | Prime Minister Johnson’s Conservative Party grabbed a commanding victory. An orderly Brexit based on the withdrawal agreement is highly likely on 31 January. Given plenty of looming uncertainties during the transition period, such as the final UK-EU trade relationship and Scottish appetite for independence, we stick to a Neutral short-term British pound outlook.
“If the conservatives of Boris Johnson obtained the majority in the Parliament, the agreement of exit of the prime minister would return to the agenda of the new House and probably it would be approved. The United Kingdom will then begin the transition period (which in principle extends until the end of 2020) during which the future relationship with the EU will be defined,” analysts at Degroof Petercam point out.
D. A. Meier (Julius Baer) | Based on a lead in polls, a Conservative majority is highly likely. Labour’s socialist manifesto seems too radical to spur a full catch-up. A hung parliament remains a considerable risk. After a Conservative victory, a moderate fiscal boost could limit the Brexit fallout. After a Labour win, its political agenda could erode its huge fiscal spending plans, despite a softer Brexit.
Olivier de Berranger (La Financière de l’Échiquier) |”Let’s have fun”. Have the words of President Charles de Gaulle been prophetic? He was against the United Kingdom’s entry into the Common Market in 1963… More than 50 years later, although the tribulations of Brexit may cause amusement or disappointment, the truth is that they have been poisoning investors’ lives for more than three years, by separating them from British stocks. However, the outcome of this endless soap opera could well change the situation.