By Halo Financial Team
UK Prime Minister, Theresa May, has asked MPs to delay their next Meaningful Vote by two weeks until Wednesday 27th February to give her more time to negotiate with the EU over “alternative arrangements” for the Irish backstop.
But with just 45 days to go until the UK is set to leave the European Union, exasperated business leaders have urged action to be taken quickly to ease confusion and avoid the consequences of a no-deal Brexit.
In a statement to the House of Commons, Mrs. May says, “The talks are at a crucial stage. We now all need to hold our nerve to get the changes this House has required and deliver Brexit on time.
“By getting the changes we need to the backstop; by protecting and enhancing workers’ rights and environmental protections; and by enhancing the role of parliament in the next phase of negotiations I believe we can reach a deal that this House can support.”
The comments came as the Office for National Statistics (ONS) revealed that the UK economy grew 1.4% during 2018, down 0.2% on the previous year and the slowest since 2012.
In fact, in the last three months of the year, Gross Domestic Product (GDP) slowed to 0.2%, which is 0.1% worse than analysts expected, and was down 0.4% in December, according to ONS estimates. Even so, Chancellor, Philip Hammond, says the economy is "fundamentally strong" and he does not believe there will be a recession.
Sterling slips on slowdown news
Following the news of the slowdown, the Pound fell from 1.292 in typical mid-market rates to 1.284. However, after Mrs May’s statement it regained the ground it had lost.
Halo Financial’s Head of Corporate Development, Tony Piggott, says, “It looks like the UK economy, battered by Brexit and soft manufacturing, industrial and retail figures, is set to see growth slow, but avoid a recession, the Chancellor has stated.
“The Pound initially fell on the disappointing news, but gained ground a little, more from profit-taking on the US Dollar, rather than any shift in GBP sentiment by the markets.”
Mrs. May concluded her statement by saying, “Mr Speaker, as well as making clear what is needed to change in the Withdrawal Agreement, the House has also reconfirmed its view that it does not want to leave the EU without a deal.
“The government agrees. But opposing no deal is not enough to stop it. We must agree a deal that this House can support. And that is what I am working to achieve.”
Bank of England also highlights uncertainty
At the same time, Governor of the Bank of England, Mark Carney, says it is important to reach an agreement over Brexit to avoid on-going economic weakness.
He has told the FTLive conference that UK business investment has fallen 3.7% in the last year. “With fundamental uncertainty about future market access, UK investment hasn’t grown since the referendum was called and has dramatically underperformed both history and peers.”
Trade wars are leading to slowing economies and global expansion could be staring to wane, he says. “The slowing in global momentum may also be the product of rising trade tensions and growing policy uncertainty.”
The UK’s departure from the European Union will prove an ‘acid test’ of whether politicians can achieve a new form of international co-operation.
“In many respects, Brexit is the first test of a new global order and could prove the acid test of whether a way can be found to broaden the benefits of openness while enhancing democratic accountability. Brexit can lead to a new form of international cooperation and cross-border commerce built on a better balance of local and supranational authorities. In these respects, Brexit could affect both the short and long-term global outlooks.”
If you’re concerned about Brexit uncertainty, get in touch with the team.