Brexit delay: The pound will rally but business needs decision not more fudging
The pound will benefit from a relief rally – but little else has changed – as Theresa May is forced to concede a medium delay to Brexit, affirms the CEO of the world’s largest independent financial advisory organisation.
The message from deVere Group’s Nigel Green comes as officials in Brussels say EU leaders have agreed a delay to Brexit to 31 October along with a review in June.
Mr Green says: “We can expect a relief rally of the pound, as investors digest the news that Brexit negotiations have longer to run, and the UK will not crash out of the EU on Friday, and the likelihood of a softer Brexit is significantly increased.
“A softer Brexit would be welcomed by businesses in the UK and those around the world that trade with Britain.
“Investors are advised to now be on the watch for this relief rally in Sterling, UK stocks, and also a mini spurt in economic activity in the UK, as delayed household and business spending takes place.”
“This medium extension period also makes a second referendum – a ‘confirmatory vote’ on any deal the Parliament finally agrees to – more likely, and with that a good chance of Brexit being voted down.
He continues: “In the meantime, this medium-length extension doesn’t change the fundamentals significantly. What businesses in the UK, the EU, and around the world that trade internationally need and want is decision, not further fudging.
“The best way to do this would be to put it back to the people in a second referendum.”
In March, the deVere CEO stated: “Allowing the public to vote and giving them a final say is quite simply the only credible solution now available.
“From inaccurate and often misleading campaigns to ineffective negotiations, the Brexit omnishambles has gone on long enough.
“Brexit will impact economic, security, diplomatic and foreign policy decisions for the UK for many decades. After MPs have tried but failed, this issue is too important not to now be put back to the people.”
He stands by this position following the outcome of the emergency Brexit summit in Brussels.
Mr Green concludes: “All the continuing uncertainty makes it essential for those who are serious about safeguarding, creating and growing their wealth to ensure that their portfolios are properly diversified. Diversification is the investor’s best weapon to mitigate risk and capitalise on the opportunities as they arise.”