Theresa May and Her 12 Point Brexit Plan

Theresa May and Her 12 Point Brexit Plan

Everything is leading to a hard Brexit and massive uncertainty. The thoughts of Gilt Edge.

It seems that politics and political rhetoric have dominated investment markets for the past two weeks. This provides risks and volatility to markets as political risk can rarely be priced in correctly. Politicians have and will continue to shock markets by acting in ways they feel best for their electorate which always sends shocks and reverberations through markets globally.

The following quote from Plato epitomises this point:

‘Those that are too smart to engage in politics are punished by being governed by those that are dumber’

If focus is solely on these events it will eventually cause issues. 2016 highlighted how the unthinkable may happen but may not be as bad as first thought.

This leads onto the fast-moving actions of the UK in the Brexit negotiations and timeline for leaving the EU.

What has happened so far in 2017?

Theresa May has continued to keep markets guessing on whether a hard Brexit will be achieved. Clarity has been shown on how the UK will formalise alliances with global markets and what leaving the EU will entail.

Supreme Court Ruling:
The Supreme Court published its findings into whether the government could enact article 50 without seeking approval from Parliament. The panel of 11 justices confirmed that the December High Court ruling was correct and that Parliament would have to be involved before article 50 can be enacted. This meant that a draft white paper was commission on how the government is looking to evoke article 50 and what type of deal is looking to be made with the EU and other global countries.

The Supreme Court found in favour of the government that separate approval was not required from the three devolved governments of Scotland, Welsh and Northern Ireland. This did not make the Northern Irish and Scottish happy as they are still considering options to leave Britain and thus able to re-join the EU. A majority vote in both Scotland and Northern Ireland of not leaving the EU in last year’s referendums.

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