Stockport based Cullen Wealth, in an effort to keep you up to date with the very interesting times we live in, is taking a closer look at what Brexit really means, particularly in relation to markets, savings and shares.
We now have an idea of the current timetable for leaving the UK, since the announcement at the recent Conservative Party conference, that Article 50 would be triggered by the end of March 2017.
Article 50 will involve a two year consultation process (which under current rules can only be extended with the consent of all the other EU member states). Under the current timetable, therefore, the UK will leave the EU in 2019, before the next General Election which (thanks to the Fixed Term Parliament Act) is due to be held in May 2020.
So, the argument has moved from, ‘will Brexit actually happen?’ to, ‘what sort of Brexit will we have?’
The type of Brexit we will have, will be determined by whether we have a ‘hard’ or ‘soft’ Brexit. Essentially, a ‘hard’ exit will result in trade being governed by World Trade Organisation rules rather than EU rules and ‘soft’ will mean we would remain in the European Economic Area, in return for paying into EU budgets and accepting the movement of goods, services, capital and people.
Both Theresa May and new Chancellor, Philip Hammond, made lengthy – and much-analysed – speeches at the recent Conservative Conference in an attempt to explain what Brexit really means.
Hammond was the first to speak, and his speech seemed to suggest that his sympathies lay with a ‘soft’ Brexit. Promising “a new plan for the new circumstances Britain faces”, Hammond made clear his belief that leaving the EU was the biggest threat to the economy and seems prepared to use it as an excuse for significant spending.
Hammond delivers his Autumn Statement on November 23rd when we may see further departures from his predecessor, George Osborne’s policies.
Theresa May’s speech echoed her Chancellor’s commitment to Government intervention. In fact, it went several stages further as she promised to “repair free markets,” declared her faith in old fashioned “industrial strategies”, mooted the energy price controls she’d ridiculed Ed Miliband for suggesting and pledged to put staff and customers on company boards. To the open disquiet of many business organisations, Theresa May’s government looks like one that will intervene in the market, and will do so frequently.
Read more of Cullen Wealth’s analysis on what appears to be the most favoured approach to Brexit and the actions most likely to be taken as we approach it.
But the Daily Telegraph reported that Mr Hammond was one of a number of voices urging caution about plans for a new work permit system designed to reduce immigration that was discussed at a Brexit cabinet committee meeting.
However, the BBC have reported that Theresa May has “full confidence” in Philip Hammond, Downing Street has said, after reports the chancellor was trying to slow progress towards Brexit.
Some newspapers say colleagues believe Mr Hammond is attempting to “undermine” the process by delaying decisions on migrant curbs.
But a Treasury source told the BBC the claims were “rubbish”.
The prime minister’s spokeswoman said the chancellor’s focus was “on how best to approach” Brexit negotiations.