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UK edges closer to the end of Brexit’s beginning

Jeffrey Sacks

By Jeffrey Sacks

Head - EMEA Investment Strategy

October 23, 2019Posted InEquities and Investment Strategy

  • The UK's new EU withdrawal agreement - which now contains no Irish 'backstop' - won 'in principle' approval from UK lawmakers. A bill passed with a majority of 30 even without the support of Northern Ireland's DUP. 
  • 'No deal' economic risk has been easing for several months. The 'no deal' probability is now very low. 
  • The EU is likely to agree an extension to UK membership beyond the 31 October 2019 deadline. The extension is unlikely to go beyond 31 January 2020 and could be even shorter. 
  • With or without a general election before the end of the new extension deadline, our expectation is that a Conservative-led goverment is likely to pass legislation for the Withdrawal Agreement. This would mark the end of stage one of Brexit. 
  • Stage two is the transition period, during which future UK-EU trade arrangements are negotiated, and currently is due to end in December 2020. 
  • While the UK's way ahead now looks clearer, reducing uncertainty for investors, the precise roadmap remains fluid. We continue to advise buying the British pound and UK equities upon any weakness. 

Click here to read Europe Strategy.