This morning the UK economy has once again shown resilience to the complex decision to leave the EU, with business conditions in the Manufacturing sector posting strong figures ahead of Article 50 deadlines in March. It would appear that a weaker Pound Sterling is boosting British exports providing a strong environment for those in the relevant sectors.
The figures came in under market expectations, but highlight the strong ‘business as normal’ mentality since the vote in June. However it remains unknown as to how conditions will perform once the UK begins the formal process of leaving the EU.
Business uncertainty a concern post-Brexit
The uncertainty that lies ahead for the UK could be about to rock business confidence as the prospect of an EU-exit begins to filter through. With no promise of single market access and the potential for further red tape a number of key corporate entities have already begun discussions to move offices into central Europe.
However the changes that may arise from Brexit are likely to have more of an impact on small businesses, who often rely heavily on EU trade and workers, as well as the huge financial sector that currently resides in London. Up to now, the UK has been stuck in Brexit limbo which has bought the economy time, but time is now running short as we approach the deadline of March 9th.
Sterling weakness on the horizon?
With Parliament expected to vote on the formal process of leaving the EU today, much of the Brexit deadline now hinge on Parliaments decision. It’s widely anticipated that no attempt will be made to block the process, however many MP’s have voiced their conflicts towards the bill.
It’s likely going to be a volatile day for the Pound, as markets prepare for what could be the beginning of the end for EU membership. Much of the sentiment around the Pound is being driven more by the type of Brexit, rather than the vote itself. Theresa May has expressed a view that ‘no deal is better than a bad deal’, which signals a complete withdrawal from the customs union if trade negotiations do not benefit the UK.
Markets have to decide the potential implications of today’s vote, with Government now expected to invoke Article 50 early in March the Pound’s appetite may begin to shrink.