Sterling has enjoyed a strong, if bumpy ride, since late-June. It has been the second strongest major currency against the US Dollar and appreciated 3.7% in NEER term, thanks in part to a build-up of speculative long-Sterling positions. Markets have seemingly taken heart from government measures to support the economy, including the labour and housing markets and service sector, the
Read moreSterling has appreciated 1.5% in Nominal Effective Exchange Rate terms since 26th November to a 7-month high, a notable move in a world of depressed currency volatility. Markets have seemingly taken comfort from the (modest) widening of the gap between the ruling Conservative Party and opposition Labour party in opinion polls to about 10pp and YouGov predicting that Prime Minister
Read moreIt is now three years since the referendum on 23rd June 2016 in which 52% of the British electorate voted for the UK to exit the EU. The issue of whether, when and how the UK will leave the EU has shaped the UK’s political agenda and economic and social landscape. The chronic uncertainty associated with Brexit has had a
Read moreThe recent local elections and European Parliament elections and Prime Minister Theresa May’s announcement a week ago that she would resign on 7th June have materially altered the probability distribution of the possible Brexit outcomes, in our view. British voters threw their weight behind parties which unequivocally back either i) a “no-deal” Brexit – namely Nigel Farage’s newly formed Brexit Party,
Read moreMuch has happened in the past two months and yet the UK finds itself in a similar situation as in mid-October 2018 when it had just over five months to get a deal through parliament before its (original) exit date from the EU on 29th March. We have so far correctly forecast that the UK and EU would reach an
Read moreThe House of Commons (HoC), the lower house of parliament, will on 12th March hold a legally-binding vote on whether to approve Prime Minister May’s draft Brexit deal – the Withdrawal Agreement and Political Declaration on the UK’s future EU relationship. We expect the outcome of this critical vote to be closer than on 15th January when an all-time high
Read morePrime Minister May Theresa May yesterday evening survived a Conservative Party leadership vote, in line with our forecast, by 200 votes to 117. She will likely remain in office but it is debatable whether she is still in power. We now expect the delayed House of Commons’ vote on the draft Brexit deal to take place in the new year
Read moreIn the past three weeks, British and European Union (EU) negotiators have formally reached an agreement on a draft “Brexit deal”, in practise two separate albeit inter-linked documents: 1) The terms and conditions of the UK’s exit from the EU – the legally binding Withdrawal Agreement (WA) and 2) The non-legally binding “Political Declaration on the UK’s future relationship with
Read more873 days after the referendum on 23rd June 2016, the British government announced yesterday that UK and EU negotiators had reached a draft agreement on the terms and conditions of i) the UK’s exit from the EU and ii) the outline of the UK’s future relationship with the EU beyond 29th March 2019. The first hurdle which Prime Minister May
Read moreIn principle, the United Kingdom (UK) will officially cease to be a member of the European Union (EU) on 29th March 2019, regardless of whether: 1) The UK and EU reach agreement on the terms and conditions of the UK’s exit from the EU (the “Withdrawal Agreement”) and importantly of the UK’s new deal with the EU and; 2) The
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