Another day, another gloomy assessment of the potential effects of the UK’s withdrawal from the EU. Actually, there were a few gloomy assessments to add to the ones we have already seen this week. Chancellor Philip Hammond began the day by saying that the UK will be worse off ‘in pure economic terms’ under all possible outcomes, including Theresa May’s Brexit deal. Some analysis has shown that 94 Tory MPs have confirmed they will be voting against the deal which, if true, does not bode well for the chances of agreeing a deal or the fate of the pound.
Then late in the afternoon, the Bank of England released its latest Brexit analysis which showed that a no-deal Brexit would be worse than the 2008 financial crisis. BoE say that if the UK crashes out of the EU without a deal then there will be a deep and damaging recession with worse consequences than the 2008 financial crisis.
Now, we know we often talk about forecasts and how unreliable they can be, but the alarm bells do have to start ringing sometime soon, right? If nothing else, it makes for a fascinating run-up to the 11 December 2018 – the date when Theresa May’s Brexit proposals will be presented to Parliament for a meaningful vote. If you’re concerned about the potential impacts of significant sterling weakness on your plans, please do not hesitate to get in touch with your Personal Trader on 020 7898 0541 to find out more.
Somewhat surprisingly, the Federal Reserve has warned that Brexit is one of the key threats to US financial stability. In a new report, America’s central bank warned that a range of economic and financial activities could be disrupted if the UK withdraws from the EU without a deal. Clearly, there is even more at stake than we might have initially imagined.
Today we will see mortgage approvals in October from the UK, the unemployment and inflation rate from Germany, and business confidence from the eurozone. We will also see initial jobless claims from the US and the minutes from the latest Federal Open Market Committee meeting. All in all a busy day, but it wouldn’t be surprising if Brexit dominated the headlines again.
