Brexit has meant long workdays for British politicians this week. Parliament voted down Prime Minister Theresa May’s latest deal with the EU on Tuesday – saying it was still not good enough. On Wednesday, MPs rejected a no-deal Brexit – for neither do British politicians wish to exit the EU without a transition agreement and wake up on 29 March to hard borders and tariffs. And lastly, on Thursday evening they voted to postpone Brexit – if the EU allows them, that is!
But where does that now leave Brexit and investors? We asked Danske Bank investment strategist Lars Skovgaard Andersen:
Both yes and no. The British have shown they do not wish to leave the EU without a transition agreement. They also accept they cannot secure an agreement by 29 March, the date that would otherwise mark the start of the transition period prior to the final farewell at the end of 2020. The British need more time to agree a deal with the EU and – not least – with themselves. So while the UK is still heading for the exit door, when the departure from the EU will happen is more uncertain than ever.Lars Skovgaard Andersen
Investment strategist, Danske Bank
That is our position at Danske Bank, and despite the various uncertainties pervading the market at the moment, such as Brexit and the China-US trade war, we see a greater return potential in equities than in bonds during the rest of 2019.