UK financial services company HSBC UK Bank plc has published commentary on the most recent events in the Brexit saga.
Highlights:
- PM Theresa May's government suffered crushing defeat in parliamentary vote on Brexit withdraw agreement, but survived a vote of confidence.
- Ms. May is expected to bring new proposals before the Commons on 21 January (but she has hinted at NO CHANGE).
- A no-deal Brexit on 29 March is the default condition under Article 50. Government may be forced to seek an extension, but all 27 EU member states must agree.
- EU has hinted that it would be inclined to grant extension in the event of a UK general election or 2nd referendum.
- NI backstop is still a sticking point.
- GBP is stuck at around $1.30, could go to $1.40 on Brexit progress or $1.10 if no deal.
- But UK economy continues to enjoy modest growth.
- Lower UK annual rate of currency inflation should lift consumer confidence if Brexit were to become less worrisome.
