Davide Ugolini of Currencies Direct takes a look at the implications of Brexit, nine months after the UK referendum
With the triggering of Article 50, Brexit is about to get real. Theresa May is entering divorce proceedings with the EU in a position of strength that was unimaginable in the chaotic aftermath of the referendum. There has been no constitutional crisis and the economy has been resilient (we have seen buoyant growth and falling unemployment). However, markets are still trying to figure out what these political events mean for the UK.
As the first quarter of 2017 came to an end, the slight deterioration seen in data (inflation, sterling devaluation) and the prospect of slower growth post-Brexit might have suggested that uncertainty was starting to have a real impact. There are no more talks of a hard or soft Brexit, but businesses are starting to adjust to the prospect of new barriers when it comes to trading with the EU.
Concerns are mounting as Scottish First Minister Nicola Sturgeon has now confirmed she will be calling for a new Scottish independence referendum. Also, potential hard borders with Northern Ireland, the only part of the UK sharing a border with the EU, could be economically damaging and destabilize the region.
Brexit is certainly the biggest challenge facing the UK in a long time. Theresa May will have to rise to the challenge and show that she has the political clout to strike the deal the UK needs in a post-Brexit world. currenciesdirect.com