Brexit: Speaker’s refusal won’t hit pound but inflicts great uncertainty on business, economy

The pound will experience a short-term relief rally, but John Bercow’s
refusal to allow a Meaningful Vote on the new Brexit deal will further
weigh on the UK economy.

This is the stark warning from Nigel Green, the CEO and founder of
deVere Group, one of the world’s largest independent financial advisory
organisations.

His analysis came after the Speaker of the House of Commons said on Monday that there
will be no Meaningful Vote, saying it is the “same matter” and
therefore cannot be put to MPs again.

According to Green, “The pound experienced a small knock to the downside, but barely. There was no major surprise.

“This underscores that traders are waiting patiently because they expect
the EU to grant an extension to Brexit in the coming days.

“When this happens, we can expect sterling to rally more significantly.

“I also stand by my prediction that should the Prime Minister’s deal be
ratified, we can expect the pound to jump sharply.  It would be likely
to hit at least $1.35 as the prospect of a no-deal, and/or months of
further uncertainty ends.

“Sentiment towards UK stocks would also rally, particularly given the
attractive valuations of many UK companies.”

He stated further,  “Whilst the pound remains largely unmoved, the decision by
the Speaker could inflict further damage to the UK economy as the
precedented uncertainty and chaos continue to drag on.

“Wealth, jobs and opportunity-generating businesses – both in the UK and
internationally- are crying out for certainty.

“Brexit uncertainty is seriously denting business investment and
confidence in the UK – and the fallout of this has cost Britain three
and a half years of lost opportunity and many tens of billions of
pounds.

“It could take a decade or so to recover, even if that recovery of
certainty starts now.”

Mr Green added that “Britain is losing its edge in a competitive global
economy with the Brexit deadlock and politicking.  It is likely to
underperform against peers for many years to come.

“And on top of it all, despite some reports to the contrary, there is
still the risk of a no-deal Brexit which would further compound the
less-than-idyllic current situation. The reason this risk remains is
that the EU may not agree to an extension and parliament has not agreed
the deal.”

The deVere CEO concluded, “Whilst the pound, the so-called Brexit
bellwether may not be impacted too significantly by the Speaker’s
refusal to allow a Meaningful Vote on Monday, the wider economy will be
impacted due to the damaging ongoing uncertainty it creates.

“It is perhaps therefore unsurprising that UK and international
investors in UK assets are responding to the uncertainties posed by
Brexit by considering removing their wealth from the UK.”