On the 31st March we moved our clocks forward as we enter British Summer Time. On the Wednesday 27th of March parliament agreed to reset the clocks on Brexit with a slightly bigger jump. Brexit/Independence/Cliff-edge day (depending on your political persuasion or who you ask) was due to be 29th March, but after some last-minute scrambling in Brussels and a rubber stamping in Westminster we now have a few more weeks to play with.
Our last couple of Brexit updates mentioned the only thing we knew for certain was that something had to happen on or before the 29th March. It did. The UK parliament refused to accept the deal struck with the EU over the last two years and so with time running out we decided to kick the can down the road just a little longer. What fun!
On a busy day in the house, MPs also had the opportunity to voice their opinion on a range of Brexit flavours and additions. Never ones to miss the opportunity to complain, MPs duly voted against every single option, ranging from a crashing out deal-less through to making revocation the default if no deal is agreed before leaving the EU. However, the situation is not as farcical as it sounds, though when we consider we’ve had two years to discuss this, it is certainly close. The next task for parliament is to interpret the scale of each defeat and see if there is any approach from here which is both possible and able to command a majority.
While parliament was busy exercising some control, Theresa May was playing her final cards in an attempt to grab control back in the shape of a third (and you would have hoped final) vote on her deal, which has since been downvoted again.
So, we continue to keep a close eye on the ‘horse trading’ but with such extreme options still open, we have therefore not taken any major investment allocation decisions or changes based on Brexit. We continue to review things constantly and weigh up what our approach will be as the path becomes clearer.
In the meantime, there is (thankfully) a world outside of Westminster and we must keep watch there too, as with Brexit in the headlines it is easy to forget Europe has other matters to contend with.
The US and China continue to trade blows in a brewing trade war, and with the economic cycle appearing to near its end we must keep an eye on central bank actions and global growth to understand when, how and if, the next downturn might hit.
For now, we remain largely neutrally positioned in our investment portfolios and thinking, and that has served us well during the positive equity market bounce back over quarter one of 2019.
We believe there remains many potential potholes in the ‘road ahead’, but that is always the case in relation to the investment markets and what influences them, and we’ll remain diligent to do our very best as always to steer our portfolios and clients through any market turbulence.
Our next committee meeting is 8th May. At that point we will be perilously close to the ‘final’ firm deadline from the EU of 22nd May. We will continue to monitor markets and events before then and act accordingly. As always should you have any queries or concerns your adviser will be more than happy to help.