“Halloween Brexit Deadline Impact.”
The 31 March was enshrined in law as the date when Britain would depart from the EU. But after a month of back and forth to Strasberg by UK Prime Minister Theresa May to get reassurances on her withdrawal agreement; numerous votes in Parliament later, and an extension of Article 50, we now have a little longer to work out what we’re doing. Extending Brexit day to either 12 April or 22 May was put forward to remove some of the risk of a hard exit and open new opportunities for possibly finding a workable solution. But in the last 48 hours, and a few more meetings later – we could now be looking at October before this dance finally sees a hope in ending. Theresa May has insisted Britain can still leave the EU by the end of April, urging MPs to use the upcoming Easter recess to think hard.
However, when it comes to international trade, there are still many uncertainties over future tariff rates and customs clearance procedures, and although nobody knows what is going to happens, Charterers are carrying on as normal until they are told otherwise.
Looking at a couple of key UK indicators to see how the Brexit process is influencing growth, prosperity and trade, we can see that the sterling has been equally emotional fraught and volatile. Every time there is the prospect of a no-deal Brexit the sterling sank, only for a couple of hours later to rally on speculation over a deal.
Since the beginning of this year we have seen Britain’s trade deficit widen more than expected as imports grew faster than exports. Some say this is a sign of a slowdown in the global economy sapping demand for goods and services abroad, however the rise in imports could be due to greater levels of stockpiling by factories rushing to get components in ahead of Brexit.
Meanwhile the FTSE 100 has recorded modest gains this month, mirroring the global financial markets as investors gamble on the belief that a slowdown in the world economy might not be as bad as feared; however, in the last couple of days the eurozone has reversed those gains as factory output fell.
Despite the Brexit gloom, the UK seems to be doing well in a couple of areas. Business activity in the country’s three biggest sectors – services, manufacturing and construction – recovered slightly in Feb.; unemployment fell to it’s lowest since 1975; and unseasonably warm weather tempted shoppers on to the high street thereby increasing retail sales. Fingers crossed the UK can weather the next couple of months. [March/April 2019, SPI Marine].