Tuesday 18 December 2018
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Businessinsider - 1 month ago

28 months of work undone in hours : The City of London reacts to the chaos of Theresa May s crumbling Brexit deal

Brexit entered a chaotic new chapter on Thursday as a swathe of government ministers including Brexit Secretary Dominic Raab resigned in protest at the deal secured by Prime Minister Theresa May. Raab s resignation triggered a major fall in the pound, with UK-focused stocks following closely behind. Traders are bracing for a turbulent next few days, even weeks, in financial markets. Investors and analysts across the City of London are scrambling to make sense of Thursday s developments, especially the repercussions for the economy and UK assets. Here s what key figures in the City are saying. Check out their comments below:Dean Turner, economist at UBS Wealth Management s Chief Investment Office, says the deal will eventually get through parliament in its current form, but that it will be a bumpy road. The Brexit negotiations are entering the endgame but the final outcome still remains highly uncertain. The technocrats have, as expected, hammered a draft text for the withdrawal agreement it is now up to the politicians to finalize the deal, he said in a note to clients Thursday morning. The risk to the deal succeeding or failing is now in the hands of UK members of parliament. Theresa May s slim parliamentary majority, only possible with the support of the DUP, may not hold up when the WA is first shown to MPs. We expect a period of political turbulence in the coming weeks and the collateral damage to the government could be sizeable. However, we still think it is more likely than not that MPs will eventually ratify the WA as the alternative of a no deal exit will be a less enticing prospect.

Tina Fordham and Christian Schulz from Citi say the UK not leaving the EU is more likely than May s deal getting through. In terms of outcomes, we see either Never Brexit or a No-Deal Brexit the two best and worst outcomes for the UK economy and markets respectively, as considerably more likely than a successful vote on the current deal, the pair wrote to clients on Thursday.

Alasdair Haynes, chairman of Aquis Exchange, a London-based equities trading firm, is concerned that the current situation could see Jeremy Corbyn s Labour Party come to power. Corbyn self-identifies as a democratic socialist and has vowed to crack down on banks. The absolutely scary thing happening today is that a deal that could get done might not get done, and he could get in, Haynes said. If we have a hard Brexit and Corbyn, that s Armageddon.

See the rest of the story at Business Insider

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