Brexit Stole My Lunch
Debate on the merits of remaining or leaving the European Union is giving way to ‘just get on with it’. Markets hate uncertainty and deadlock is dead boring for UK spectators. The cobbled Conservative coalition will be in power for the next 5 years (May May not), plenty of time to complete the task and move on for better or worse. UK economic growth is lagging the rest of Europe but it’s been lackluster for years not just the past post referendum year. Brexit could obviously be one of the reasons but that is opinion not fact. Exorbitant levies introduced to curb the housing market, so vital to the UK wealth effect, could just as easily be another reason. The steep decline in the sterling has made UK manufacturing more competitive, unemployment hovers at record lows, the Bank of England remains highly accommodative and the FTSE 100 is up almost 12% over the past 12 months. The FTSE250, a better gauge of domestic activity, is up over 14% during the same period. Not quite as good as the U.S. but better than the pre-Brexit 2015-16 that averaged 7% (FTSE100) and 12% (FTSE250).
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