Everything you need to know…
The global markets seem to suffer from a chronic case of short-term attention span because stakeholders always seem to forget the effects of market-moving events too quickly. Last year, the global markets experienced a monumental level of volatility after Britain voted to leave the EU in the historic Brexit move. The markets suffered massive volatility in response to the ‘Yes’ vote to Brexit and the pound fell to its lowest level in years.
However, investors, traders, and stakeholders in the global economic landscape seem to be forgetting that the Brexit vote is only a vote. The actual process of divesting Britain from the EU will usher in a potentially volatile phase in the global economic landscape. This piece provides insight into how the actualization of the Brexit agenda could trigger a butterfly effect rippling through the global economic landscape.
Many people don’t think Theresa May can get a good Brexit deal
British Prime Minister, Theresa May is saddled with the responsibility of leading the British camp to negotiate the terms of Britain’s exit from the EU. Depending on the strength of Britain’s diplomacy, strategic plans, and negotiating skills, Brussels could give Britain a soft exit or a hard exit. Peter Sawyer, an analyst at Saxon Trade submits that “a hard Brexit is more likely because the EU would want to send out a strong message that would deter other countries from contemplating leaving the EU”.
Theresa May will initiate the formal Brexit proceedings next month and she has maintained that she is committed to getting the best deal possible for Britain. She has also created a rallying cry noting that “No deal is better than a bad deal”. However, the results of a poll conducted by Ipsos MORI reveals that only 44 per cent are confident that May will get a good deal for Britain and 51 per cent of respondents think she won’t be able to get a good deal.
Interestingly, Theresa May might find it easier to work out a good deal for Britain because a large part of the citizenry agree with her that ‘No deal was better than a bad deal’. In the survey, 52 per cent of respondents believe that Theresa May should walk away with a ‘no-deal’ if the EU is pushing for a hard Brexit, which is potentially a bad deal.
Interestingly, only 18 per cent of people in Britain believe that Brexit will improve their standard of living, 37 per cent believe that their standard of living will be worse off after Brexit, and 24 per cent of the respondents believe that Brexit won’t make any marked difference.
Interestingly, market watchers seem to have forgotten Brexit and they have now focused their attention on the upcoming French elections. Of course, the French election is a legitimate cause of concern for EU stakeholders because one of the French candidates, Le Pen has been vocal about her plan to drop the Euro and revive the Franc if she wins the election.
Many political commentators believe that France’s decision to stop using the Euro EU could be the first step in an inevitable ‘Frexit’. The French elections are still a couple months away but analysts at the Financial Times believe that the actualization of Brexit and not the French elections is the biggest risk hanging over European firms.