Brexit Update: Political Resolution Brings Economic Rebound
Political Resolution Brings Economic Rebound
Yesterday, Andrea Leadsom, one of two candidates vying to replace Prime Minister David Cameron, dropped out of the running. Leadsom’s move leaves United Kingdom (UK) Home Secretary Theresa May as the remaining and winning successor and new leader of the Conservative Party. After nearly three weeks of political unrest following Cameron’s resignation and the Brexit referendum, the markets embraced the newfound stability. The British Pound recovered much of last week’s losses, jumping back up to around $1.32 in trading early Tuesday morning.
The selection of the prime minister could abbreviate the timeline to triggering Article 50 of the Lisbon Treaty. A candidate was not expected to be confirmed until September, after which, politicians said they would begin Brexit talks. With May clenching the position two months early, it is unclear how quickly the proceedings will unfold.
May’s rhetoric confirms that despite her position prior to the referendum she intends to guide the country’s departure from the European Union (EU). She has confirmed, “there will be no attempts to remain inside the EU” and is committed to a “strong new positive vision for the future.” May will also hold fast to one of the key tenants of the Brexit vote by restricting European immigration, saying “free movement cannot continue as it has done up until now.” Still she plans to pursue the “best deal in trade and goods and services.”
£1 GBP = $1.32 USD
€1 EUR = $1.11 USD
£1 GBP = €1.19 EUR
(as of 8:00 AM EST, 7/12/2016)
#Brexit: What’s Trending?
Brexit to Hit EU Growth – The European Commission (EC) predicts that Brexit could have a negative and prolonged impact on the bloc’s economy. Analysts say growth could be cut by as much as 0.5 percent by 2017.
OPEC Fears Brexit Impact – The Organization of the Petroleum Exporting Countries (OPEC) expects Brexit to dampen oil demand, forecasting economic declines in European and global markets.
BOE Comes Under Fire – Bank of England Governor Mark Carney has defended the central bank against accusations that it violated its independence by emphasizing the negative consequences of the decision to leave the EU.
Brexit Spills into European Housing Markets – There is growing concern that continued market volatility could affect Sweden’s hot housing market, seeing rapid declines in rents and home prices.