The Daily Update - Theresa May may Mayday in May

The month of May looks to be somewhat challenging for Prime Minister Theresa May. Although she recently polled more popular (or more accurately less unpopular) than Jeremy Corbyn for the first time in a year - she now faces a new Brexit ‘ultimatum’ from MPs within, further dogged Brexit pessimism from various EU officials without, and following tomorrow may be answerable if any disappointment and losses across local council elections transpire.

The first wave of attack is from inside her Party and ‘Brexit War Cabinet’, some of whom today issued a 30-page ‘ultimatum’ against the proposal for a post-Brexit ‘customs partnership’ with the EU (favoured by Chancellor Philip Hammond) that would trade-off some autonomy for… well… some actual trade. The European Research Group, led by Jacob-Rees-Mogg and comprising 60 MPs, have written numerous letters against the proposal and today’s letter spearheads this opposition stating that ‘The new customs partnership proposed is undeliverable in operational terms and would require a degree of regulatory alignment that would make the execution of an independent trade policy a practical impossibility.’ Moreover the Telegraph reported that if unheeded, ‘Tory MPs would consider withdrawing support for Government Bills in Parliament, which would lead to legislative paralysis and put Mrs May's future as leader in doubt.’

Furthermore the constant piercing bombardment of EU Brexit deal pessimism is making it increasingly difficult for the Tories and the trade negotiation delegation to gain any ground. The latest shot across the bow was from Barnier stating, ‘There is a real risk; we have to be prepared for all options including no deal.’ and that, ‘The United Kingdom’s approach to the negotiations will need to change in some way’. The UK and EU ‘need to agree rapidly by June the scope of alignment’ and then quicken the pace of negotiations even further if they are to reach any agreement by an October target.

Lastly (if Theresa May is that lucky), there is the potential tomorrow for voters across 150 councils in England to expose the current political climate – of which Brexit remains a significant driving force – although recent scandals on both sides (from Windrush to alleged anti-Semitism) also muddy the water. Across these councils there are over 4,000 contested seats including all of the councillors across London’s boroughs.

The Conservatives face a natural uphill battle, given that parties in government tend to struggle more in council elections, receiving due and undue blame for recent failures. From Remainers using the elections to express their condescension and Brexiteers expressing their disapproval of slow progress, to catastrophes like Grenfell Tower in Kensington where the 37 Tory seats (of 48) may be held accountable via the ballot paper. There are also lots of native concerns against Conservative council plans (such as proposals to cut spending). Yet despite all this Prime Minister May could end up taking most the blame for any disappointments and apparent protest-votes. With this set to be the last UK election before leaving the European Union, anyone opposing her steering the UK through Brexit will likely strike before the month of May is out.

Please read this important information before proceeding. It contains legal and regulatory notices relevant to the information on this site.

This website provides information about Stratton Street Capital LLP ("Stratton Street"). Stratton Street is authorised and regulated by the UK's Financial Conduct Authority. The content of this website has been prepared by Stratton Street from its records and is believed to be accurate but we do not accept any liability or responsibility in respect of the information of any views expressed herein. The information, material and content provided in the pages of this website may be changed at any time by us. Information on this website may be out of date and may not be updated or removed.

The website is provided for the main purpose of providing generic information on Stratton Street and on our investment philosophy for the use of financial professionals in the United Kingdom that qualify as Professional Clients or Eligible Counterparties under the rules of the United Kingdom Financial Conduct Authority (the "FCA"). The information in this website is not intended for the use of and should not be relied on by any person who would qualify as a Retail Client. Products and services referred to on this website are offered only at times when, and in jurisdictions where, they may be lawfully offered. The information on this website is not directed to any person in the United States. The provision of the information on this website does not constitute an offer to purchase securities to any person in the United States (other than a professional fiduciary acting for the account of a non-U.S person) or to any U.S. person as such term is defined under the Securities Act of 1933, as amended.

The website is not intended to offer investors the opportunity to invest in any Alternative Investment Fund ("AIF") product. The AIFs managed by Stratton Street are not being marketed in the European Economic Area ("EEA") and any eligible potential investor from the EEA who wishes to obtain information on the AIFs will only be provided with materials upon receipt by Stratton Street of an appropriate reverse solicitation request in accordance with the requirements of the EU Alternative Investment Fund Managers Directive ("AIFMD") and national law in their home jurisdiction. By proceeding you confirm that you are not accessing this website in the context of a potential investment by an EEA investor in the AIFs managed by Stratton Street and that you have read, understood and agree to these terms.

No information contained in this website should be deemed to constitute the provision of financial, investment or other professional advice in any way. The website should not be relied upon as including sufficient information to support any investment decision. If you are in doubt as to the appropriate course of action we recommend that you consult your own independent financial adviser, stockbroker, solicitor, accountant or other professional adviser. Past performance is not necessarily a guide to the future. The value of investments and the income from them may go down as well as up. An application for any investment or service referred to on this site may only be made on the basis of the offer document, key features, prospectus or other applicable terms relating to the specific investment or service.

Where we provide hypertext links to other locations on the Internet, we do so for information purposes only. We are not responsible for the content of any other websites or pages linked to or linking to this website. We have not verified the content of any such websites. Such websites may contain products and services that are not authorised in your jurisdiction. Following links to any other websites or pages shall be at your own risk and we shall not be responsible or liable for any damages or in other way in connection with linking.

By using this site, you should be aware that we may disclose any information that we hold about you to any regulatory authority to which we are subject, or to any person legally empowered to require such information.

This website uses cookies to improve user experience, by clicking the "I Accept" button below means you consent to the use of cookies on our website.