A new ‘truly Global Britain’ - that was the dream outlined in a carefully scripted Brexit speech from UK Prime Minister Theresa May, along with 12 points of much needed clarification that make that dream seem so orderly and achievable. Perhaps such simple optimism gave case for the pound’s largest one-day rally since the global financial crisis. More likely the main reason for the spike in sterling was the fact that it had already dropped over the days prior due to a leak of ‘hard Brexit’ proposals and that there was little further in the way of surprise in the speech. Indeed the most notable development was the favourable confirmation that parliament will get to vote on the Brexit deal - but only once, ‘we know what that deal is.’
The 12 points were as follows:
1: Provide certainty about the process of leaving the EU
2: Control of our own laws
3: Strengthen the unions within the UK
4: Maintain common travel area with Ireland
5: Control of immigration from EU
6: Guarantee rights of EU citizens in Britain and British in other member states
7: Protect workers’ rights
8: Pursue a bold free trade agreement with EU
9: Rediscover role as a great global trading nation
10: Collaborate with European Partners on major science, research and technology
11: Work closely with European allies in foreign and defence policy
12: A phased process of implementation
Alongside the uncertainties of such ‘hard Brexit’ talk comes a much needed sense of confidence in what the UK has to offer to the world economy. With its favourable position, time zone, language and established institutions many of the things that made the City of London a global financial hub remain unchanged; indeed the UK’s previous indecisiveness, infighting and timidity were not making the most of its strong negotiating position. A report from Politeia titled ‘A Blueprint for Brexit’ offers a detailed case for how a standalone UK financial service sector works both as a viable option for the City and a significant ultimatum for negotiating with the EU - who perhaps stand to lose more from an inimical split. May reiterated, ‘We do not seek membership of the single market; instead we seek the greatest possible access to it through a new comprehensive, bold and ambitious free trade agreement.’ Being confident in what we have to offer as well as aware of the benefits of good trade agreements with neighbours should help steer what has been an emotive matter towards an increasingly rational one and put to rest lingering wishful thinking.
The global populists rise has also put the UK in better stead than when the Brexit vote was first realised; with a weakening Europe and US more cognisant of and aligned with our audacity for reform. But the hurdles remain wearingly innumerable; just this coming Thursday the UK Supreme Court is expected to pass the Brexit Judgement. We expect the unpleasant nature of trade negotiations to continue to stoke volatility across Europe, especially in the short term. But in the longer term Brexit is slowly becoming comparatively less of a concern for global financial markets, but this is as much due to uncertainties from the EU and US intensifying.
In true political chiasmus May concluded, ‘When future generations look back at this time, they will judge us not only by the decision that we made, but by what we made of that decision. They will see that we shaped them a brighter future. They will know that we built them a better Britain.’ Unfortunately reality is never as definite as rhetoric and our strategy remains to find protection from these uncertainties through value, high grade, creditor nation investments.