A SHORT-TERM BREXIT ROAD MAP DEAL AGREED?
YES
NO
Approved by MPs
EU offers extension NO
MPs approve a deal LEAVE WITH A DEAL ON 31 OCTOBER OR SHORTLY AFTERWARDS
YES YES NO
YES
Boris Johnson finds a way to avoid extension Yes
No
Johnson asks for extension or resigns
UK Government [OGL 3]
NO DEAL
Resigns
Extension
(POSSIBLE OUTCOMES) NEW PM, LIKELY GENERAL ELECTION, SECOND REFERENDUM
sterling and how it performs against other major currencies such as the euro and the US dollar. Since the June 2016 vote to leave the EU sterling has traded in a rough range between $1.20 to $1.40 against the dollar, having been at around $1.50 immediately before the vote amid expectations for a remain result. (See chart on next page) More recently, and since the election of Johnson as Conservative Party leader and ultimate elevation to Number 10 this summer, it has traded much closer to the $1.20 mark. This reflects Johnson’s apparent greater willingness to accept a no deal outcome than his predecessor Theresa May. Nigel Green, chief executive of wealth management firm deVere, says: ‘Since Boris Johnson succeeded Theresa May in July, our consultants have registered a 35% increase in
investors – both UK domestic and international – seeking to reduce their exposure to UK assets, including UK pensions, bonds and sizeable holdings of sterling. The only exception is UK property.’ FOREIGN PREDATORS SWOOP FOR UK FIRMS The weakness in the UK’s currency has also made its companies less expensive for foreign suitors and we’ve seen several high profile deals since the Brexit vote. For example, UK technology champion ARM was snapped up by Japanese firm Softbank as early as July 2016. Comcast snared pay-TV broadcaster Sky for £30bn in 2018 and London Stock Exchange (LSE) was recently the target of a blockbuster bid from its Hong Kong counterpart – a proposal which has been firmly rebuffed for now. 26 September 2019 | SHARES |
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