In a recent poll we asked for your feedback on the consequences of the UK’s BREXIT omnishambles. Clearly the results showed how divided the sceptred isle (as described by Shakespeare’s Richard II) still is and why Parliament can’t, and probably never will, find common ground.
3 years after the referendum took place, people’s views of the outcome is still fairly ‘Even Stevens’ between things getting worse, no different or better – with Remainers’ worst fears just pipping the post. A high proportion seemed embarrassed by the whole shenanigans, and just a few just wanting to get away from it all. So what does this suggest for investors?
Well, uncertainty is an investor’s worst enemy. Combine this with a global economic slow-down and you get the most prolonged slump in business investment in 17 years, according to the British Chambers of Commerce (BCC). Setting Britain on a course for weaker economic growth in future, the lobby group also said business spending in the UK was expected to decline by 1.5% in 2019 and by 0.1% next year as companies put their investment plans on ice amid the global political turmoil. Perhaps the worst thing of all is that the markets don’t seem to have priced-in, or reflected, this risk into stocks and the British Pound. One challenge for the former is that many of the UK’s FTSE100 companies do most of their business outside the UK and EU. So a weaker pound is actually favourable. As for the Pound itself, if there is no compromised exit solution with the technocrats in Brussels, then it won’t be long before we see parity against the Euro and the Dollar. Now wouldn’t that make things easier next time you go on holiday?!