You are here: Home - Investing - Experienced Investor - News -

FTSE and sterling jump on Brexit vote delay

0
Written by: Danielle Levy
15/03/2019
Investors welcomed MPs’ latest vote in the House of Commons in favour of a delay to Brexit on 29 March.

The UK’s blue-chip index was up 49 points at 7,234 at 3.55pm, which represents a 0.7% rise on the day.

This followed Thursday’s vote in the House of Commons in which MPs approved a motion requesting that prime minister Theresa May asks European Union (EU) leaders for a one-off extension to Brexit. MPs voted by 413 to 202, representing a majority of 211 votes.

The news caused the pound to strengthen against the dollar to $1.328.

Uncertainty remains

Chris Rodgers, senior fund manager at Sanlam Investments, said the vote in favour of delaying Brexit has reduced the possibility of a no-deal Brexit. Nevertheless, he said overseas investors continue to remain on the side-lines.

“The fundamentals of the UK do, however, remain strong, and we expect an immediate boost to UK equities and sterling once the Brexit outcome is made clear. In the meantime, investors may wish to consider their exposure to domestically-focused UK equities which in some cases may be considerably undervalued,” he explained.

MPs will be able to vote on a third version of May’s Brexit deal an 20 March. If this is approved, this would mean that only a short extension will be required. If the plan is rejected, a longer delay will be required.

These developments follow an eventful week in the House of Commons, which saw MPs vote against the prime minister’s withdrawal agreement on Tuesday, and then the following day they voted against leaving the EU without a deal.

Although MPs have voted against the prospect of leaving without a deal with the EU, this does not necessarily mean that it will happen. Under Article 50 the UK has legally committed to leaving the EU on 29 March. If a withdrawal agreement is not in place, then ‘no deal’ will be the default scenario.

Plea for a deal

As chancellor Philip Hammond delivered his Spring Statement speech to the House of Commons this week, he made a plea to MPs in the House of Commons to overcome their political differences and reach a compromise by agreeing to leave the EU with a deal over the coming weeks.

“Leaving with ‘no deal’ would mean significant disruption in the short and medium-term – and a smaller, less prosperous economy in the long-term than if we leave with a deal. Higher unemployment, lower wages, higher prices in the shops: that is not what the British people voted for in June 2016,” Hammond said.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week