Brexit delay: Good for GBP, disconcerting for UK Plc

The boss of the world’s largest independent financial advisory group says the decision to delay Brexit – following a Wednesday (11 April) agreement between Brussels and London – might well give the pound sterling a benefit rally, but for businesses little else has changed.

UK Prime Minister Theresa May and EU leaders agreed overnight to delay to Brexit to 31 October along with a review in June. Commenting on the concerns of investors’ and businesses, deVere Group CEO Nigel Green says a relief rally of the pound is to be expected, as investors digest the news that Brexit negotiations have longer to run, and the UK will not crash out of the EU on Friday, and the likelihood of a softer Brexit is significantly increased.

“A softer Brexit would be welcomed by businesses in the UK and those around the world that trade with Britain. Investors are advised to now be on the watch for this relief rally in Sterling, UK stocks, and also a mini spurt in economic activity in the UK, as delayed household and business spending takes place.”

Green says this medium extension period also makes a second referendum - a ‘confirmatory vote’ on any deal the Parliament finally agrees to - more likely, and with that a good chance of Brexit being voted down. 

“But in the meantime, this medium-length extension doesn’t change the fundamentals significantly. What businesses in the UK, the EU, and around the world that trade internationally need and want is decision, not further fudging. The best way to do this would be to put it back to the people in a second referendum.”

While the idea of a second referendum is deeply controversial for some, the deVere CEO has always been in the second vote camp. 

“Brexit will impact economic, security, diplomatic and foreign policy decisions for the UK for many decades. After MPs have tried but failed, this issue is too important not to now be put back to the people.”