Post Tagged with: "Britain"

More on why Britain might not leave the EU and how a second referendum could happen

More on why Britain might not leave the EU and how a second referendum could happen

I have long suspected that an act of Parliament would be necessary to formally trigger Article 50. In an 8-3 verdict today, the UK Supreme Court affirmed this suspicion. Theresa May cannot invoke royal prerogative for the simple reason that leaving the EU is an act that has a tremendous impact on laws governing the UK. And the Supreme Court says these vast changes in UK law require an act of Parliament to decide. At the same time, the Court ruled that Wales, Scotland and Northern Ireland have no devolved powers here, They cannot veto the UK’s exit from the EU.

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Why Canada is the country to watch on Trump’s trade policy

Why Canada is the country to watch on Trump’s trade policy

If you want to know whwere Trump is headed on trade, don’t look at China or Mexico. Don’t even look at the UK. Canada is the country to watch for a number of reasons. First of all, Canada has an existing deal with the US and Mexico under NAFTA. That matters in terms of understanding where Trump is headed on trade. Moreover, Canada is also the 2nd largest trading partner for the US behind the European Union. Finally, the fact that Canada is finishing off its EU trade deal just as the UK is getting ready to exit puts it in a unique position in reconfiguring world trade alliances – wth an Anglo-American group involving Canada a potential outcome.

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A Q&A With Prime Economics’ Jeremy Smith on Brexit, Immigration and Democracy

A Q&A With Prime Economics’ Jeremy Smith on Brexit, Immigration and Democracy

On Monday, UK Prime Minister Theresa unveiled her vision for Britain’s exit from the European Union. The Prime Minister couched her outlook in positive terms, speaking of Britain leaving the EU but remaining in Europe. She spoke of EU member states as friends and partners. And she insisted that Britain would prosper after Brexit is achieved. I have written about what the key takeaways from her speech were. But to get a better sense of how realistic her vision is in political and economic terms, I also asked Prime Economics Co-Director Jeremy Smith for his take.

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Britain's Home Secretary Theresa May delivers her keynote address on the second day of the Conservative party annual conference in Manchester, northern England September 30, 2013.  REUTERS/Phil Noble (BRITAIN  - Tags: POLITICS SOCIETY) - RTR3FFSM

Theresa May: Britain will definitely leave the EU

British Prime Minister Theresa May set out details for her vision regarding the UK’s relationship with the EU In a speech today that will please those that campaigned to leave the EU. The Prime Minster, as expected, made clear that this will be a ‘hard Brexit’ because there will be not attempt by government to maintain Britain’s access to Europe’s single market. The biggest piece of new news in her speech was her acquiescence to a vote by Parliament on an EU deal, something that pre-empts a decision by the high court on the government’s ability to use Royal prerogative to bargain on the Queen’s behalf

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Hammond’s ‘whatever it takes’ strategy for a hard Brexit

On Friday, I wrote why, unlike Bank of England Governor Mark Carney, I believe the economic threat of Brexit to the British economy is now higher. The gist of my remarks was that an actual trigger of Article 50 under hard Brexit circumstances is when we should expect any economic impact from diminished consumption and investment. Some brief comments below

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Why the Brexit risk is now higher, not lower

When the Brexit vote first happened, I indicated that I didn’t see the huge risk to the UK that others did. In fact, I thought the initial tail risks were elsewhere, like the Italian banking system. The economic risks for the UK were always overstated because of monetary, fiscal and currency offsets. But now that a hard Brexit comes closer, the risks have increased, not decreased, as Mark Carney, the Bank of England Governor contends. Some thoughts below

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The unwinding of the carry trade of the British pound sterling

The unwinding of the carry trade of the British pound sterling

Between the first quarter of 2013 and the end of 2015, London property prices rose rapidly, the exchange rate appreciated, and the current account deficit widened. This column argues that the rise of the pound was in fact a financial bubble, riding on a property price-exchange rate carry trade.This unsustainable bubble was deflated by Brexit.

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Re-calibrating our thinking about Brexit after MPC rate cut

Re-calibrating our thinking about Brexit after MPC rate cut

The Bank of England has cut interest rates and started a quantitative easing program that includes both government and corporate bonds. This approach was enough to send the pound Sterling down to $1.31 and 10-year gilt rates to a record low of 0.677%. While I reiterate my previous bullish views on Anglo-Saxon long rates, US dollar strength and on the UK […]

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The EU as a larger Germany post-Brexit and Hugh Hendry’s Eclectica Fund commentary

The EU as a larger Germany post-Brexit and Hugh Hendry’s Eclectica Fund commentary

Stocks have mostly recovered since Brexit and the strong dollar and Yen have reversed much of their overvaluation in recent days. The question remains as to what the fallout from the UK’s departure from the EU will be. I continue to believe the near-term economic impact will be muted, and that Brexit will come to be seen as mostly a political event. But it is a political event with wide-reaching potential ramifications.

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The British political landscape after the EU referendum

The British political landscape after the EU referendum

This is going to be a quick post to update you on where I think things are headed now that we have the two final candidates for UK Prime Minister. My overall view continues to be that the base case is for a moderate negative economic, assuaged by currency, fiscal and monetary offsets, causing the UK to avoid recession but with longer-term hits to growth from trade frictions and a loss to jobs in the financial sector. The issues now are immigration, the timing of the invocation of Article 50 and the single market.

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Leading UK PM Brexit strategies taking shape with May and Leadsom

Leading UK PM Brexit strategies taking shape with May and Leadsom

At this juncture, the leading candidates for British Prime Minister are both women on either side of the referendum vote. However, both are saying they will guide the UK out of the European Union. Meanwhile Chancellor George Osborne’s fiscal stimulus looks set to concentrate on lowering corporate tax, which will continue to widen the income gulf, a major contributor to the vote to leave the EU. Markets have stabilized with the Pound taking the brunt of the post-Brexit fallout.

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UK fiscal and monetary policy offset to kick in, bullish for gilts

UK fiscal and monetary policy offset to kick in, bullish for gilts

UK Chancellor Osborne has now abandoned his 2020 budget surplus target. Combine this with the dovish statements by Bank of England governor Mark Carney yesterday and you can see some serious policy changes in play to minimize the near-term downside risk. But, of course the risks to the UK are longer-term and the near-term risks are mostly elsewhere in the global economy. I continue to believe this favours safe assets i.e. government bonds.

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