Brexit Watch

Brexit remains one of the historic and seismic event of 60-year European Union (EU) history. Brexit is the term given for the prospective withdrawal of the United Kingdom from the European Union using the Article 50 process. This is now being keenly watched across the globe due to its far-reaching implications.

Brexit: Latest news and events

  • Bank of England Governor Mark Carney has said that the UK economy is hampered by ‘Brexit effect’ in the short term. Carney said that despite the acceleration in global growth, the UK economy is now 1% smaller than the Bank predicted due to the impact of Brexit.
  • The Norwegian Prime Minister, Erna Solberg said that Britain should push for a "soft Brexit" and that close ties to the European Union (EU) are very important for the UK and the European economy.
  • The findings of the Guardian/ICM survey shows that Labour voters are becoming increasingly receptive to reconsidering Brexit, wherein 65% of Labour backers want the public to have the final say on leaving once negotiations are complete, compared with 19% who oppose the idea. Meanwhile, voters support the idea of holding a second EU referendum by a 16-point margin, according to the survey.
  • The Scottish government has said an EU Continuity Bill is likely to be introduced at Holyrood next month. It said the move was needed to prepare Scotland's laws for EU withdrawal if it is not possible to find agreement over the UK government's own Brexit bill.
  • According to FT, Brexit Secretary David Davis has reportedly complained to Theresa May about EU guidance stating the UK would become a "third country" in 2019 with no reference to a possible trade deal.
  • French President Emmanuel Macron has suggested the UK could get a special trade deal with the EU after Brexit. But he warned that Britain would not have full access to the single market without accepting its rules like freedom of movement across the EU, budget contributions and the jurisdiction of the European Court of Justice.

Brexit: What is happening @ UK and EU?

  • EU is seeking to tighten the conditions which will apply to the UK during the transitional period which the EU proposes will last up to 31 December 2020. The UK's freedom to determine its own rules on immigration, trade, and fishing in a transition period after Brexit may be further restricted, according to revised EU guidelines on a transition.
  • International Trade Secretary Liam Fox has said that the UK may join a multi-nation Pacific free trade zone after Brexit.
  • Tory MP Jacob Rees-Mogg has called for a fundamental change in ministers' tone on Brexit, accusing UK negotiators of being "cowed by the EU". Chancellor Philip Hammond, meanwhile, has said he hopes the UK and EU economies will only move "very modestly" apart after Brexit.
  • Head of Confederation of British Industry (CBI), Carolyn Fairbairn has said that it would be best if the UK would remain in a customs union with the E, citing that there was a "lack of clarity" surrounding ongoing talks about the future of UK-EU trade.
  • The European Council President Donald Tusk has suggested that the UK would be welcome to stay in the EU if it changed its mind about Brexit.

Impact on the Markets

  • The rate of UK interest rate rises over the next year will depend heavily on Britain’s Brexit negotiations with the EU, as per Bank of England governor Mark Carney.
  • Sterling hits $1.40 for the first time since Brexit vote due to the economy benefiting from an upswing in global growth. The UK currency also dined off the weakening US dollar and employment data pointing to a record number of people in work.
  • According to a forecast by the International Monetary Fund this week, the UK is set to grow at almost half the rate of the US in 2018 and lag behind every other G7 nation except Japan.
  • Shares in blue-chip companies with big overseas businesses have done much better than shares in UK-focused businesses since the Brexit vote. Shares in global businesses are up 33% since the June 2016 referendum, whereas shares in UK-focused businesses are only up 2%.

Brexit: Latest news and events

  • Thanks to the agreement on three key issues: Britain's Brexit "divorce" bill, the rights of EU citizens in the UK after Brexit, and the Irish border; the deadlock on talks between EU and UK was broken and phase 2 of the talks have started. This is said to be the ‘Brexit breakthrough’.
  • The Government is facing a High Court challenge over the legality of Article 50, which can possibly bring Brexit negotiations to a halt.
  • British passports issued after October 2019 will be restored to its iconic dark blue and gold instead of the burgundy model prescribed under EU membership.
  • The Court of Session in Edinburgh has said that a legal action can go ahead for establishing whether the UK can stop Brexit if British voters decide the final deal is unacceptable.
  • British officials fear that Spain will veto Theresa May's Brexit deal in case she refuses to negotiate a separate agreement to cover Gibraltar. 

Brexit: What is happening @ UK and EU?

  • UK is scheduled to depart from EU at 11 pm UK time on 29 March, 2019. But instead of going cold turkey, there would be a temporary “transition period” after the UK leaves the EU and before the final arrangements kick in. EU has now set a 21-month limit for this period, ending by 31 December 2020.
  • EU is bracing for Brexit impact by proposing a bill to bring the biggest investment firms in the euro area under the supervision of European Central Bank (ECB). The access criteria for companies outside the EU is also aimed to be toughened.
  • Political and economic uncertainty from Brexit continues to affect the UK housing market due to high inflation.

Impact on the Markets

  • Thanks to the news of Brexit breakthrough, Europe's stock markets are surging and the pound briefly topped $1.35. Europe's banking index also boomed. However, all these are expected to remain volatile for near future depending on positive/ negative Brexit news.
  • Due to Brexit boost, 100 new firms back London on Stock Exchange in 50% rise in a year. This shows that London will remain a global financial player post-Brexit.
  • British stocks and Eurozone equities cut down by funds due to Brexit uncertainties.
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