London had not fallen into a dark mistress so deep since Great Smog of 1952.
Theresa May’s “Proposals and Agreements” have been in constant negotiations for two years, but once again it was ruled by parliament’s votes twice. Most politicians favor a negotiated Brex, allowing a transition period, but Brussels is unwilling to go further than what May offers. For this reason, the British olives are in turmoil, as lawmakers can not agree when and under what conditions they want to leave the EU.
EU chief negotiator Michel Barnier warned that an irregular Brex could occur even though MPs voted against it on Wednesday. The delay on March 29th is now inevitable and the options for a second referendum or general election are ever the most tempting.
If Brexit would happen without a deal then that would affect the UK economy in a total chaos affecting the economies and other markets in the world. But even if a deal expires (after a deferment of a specified date ), the uncertainty that has escaped the British economy and business will continue.Businesses probably will not get the answers they have been wanting for several years yet. Whilst the political outlook, the forecasts are not good for the UK economy.
Since the vote in Brexit, economic growth has slowed down.After a year-end with weak economic data, this January the national income was restored somewhat.According to the National Statistics Office, growth was 0.2 percent in the three months in January, an “increase poor. “An increase of 0.1 percent in the first quarter of 2019 was noted by the composite purchasing manager index. The UK Budget Oversight Budget Office predicts that the economy will grow by 1.2 percent this year year, a forecast of 1.6 percent five months ago.
Newest member of the Bank of England Monetary Policy Committee Jonathan Haskel said in a speech this week that the post-referendum business investment has fallen compared to its historical trend and compared with other G-7 economies . As it grows at the same rate, growth would be 2.9 percent, but it dropped by 0.4 percent. Investment falls a negative force and this suggests that Brexit accounts for nearly 70 percent of the investment slowdown.
Anecdotal evidence supports this, showing the impact on people’s livelihood. Nissan Motor Co. Ltd. is shifting the production of some cars – the X-Trail vehicle and two Infiniti models – far from Sunderland in northern England. Honda Motor Co. Ltd will shut down its U.K. plant in Swindon. While companies insist that these decisions are not just down to Brex, it’s ridiculous to think that Britain’s attempt to leave not only the EU but also the single market does not affect foreign investors. As it grows at the same pace the growth would be 2.9 percent but it dropped by 0.4 percent. The return on investment is a negative force and this suggests that Brexit accounts for almost 70 percent of the investment slowdown.
According to OBR, the economy is expected to grow by 1.4 percent in 2020 and an increase of 1.6 percent next year thanks to the agreement that OBR assumes have been made. The optimistic trends go so: once Britain leaves, the business will know what to expect and will resume buying equipment and machinery. “But these are just temporary hopes.
What will happen if Britain leaves the EU without an agreement? It is difficult to think of a sector of the economy that will not suffer these consequences in the worst possible way. The Bank of England can calm the monetary policy for ‘Dealt with the Fall, but a collapse in the pipeline and supply boundaries could cause increased inflation, which would require a monetary tightening. Serious companies need to spend to deal with outages, but it will falls in comparison to the reduction of domestic and foreign demand.
In a break without a deal, a credit crunch would be a close security. The bank has also asked lenders to triple their liquid assets, according to Financial Times, but the weaker banks would still be vulnerable.
What will happen if we have an outcome of a ratified agreement between the U.K and the EU? There are again some basic questions that remain unanswered. What party will be in power? With the conservative and work-dominated political parties, who knows what they want Brexit to be like? How much will the EU accept? And how will Britain’s trade with the rest of the world look ?!
The third scenario,
A second referendum that will take a year to prepare and may have the same result or may cause more political breakdowns and breaks in the country. Whatever goes on, it does not clarify anything about business in the UK and whether Britain it takes more time to think.
Departing from Britain may have started. The heaviest immigration policy behind Brexit, favored by May and labor leader Jeremy Corbyn, may push companies to leave. Similarly, many finance firms have created shops in other EU countries now and they can begin to competing with those who are still in the UK. Investing in intellectual property products has been pretty good since the vote, probably because they have less risk of border barriers, Haskel said.
The Great Smog of London killed thousands, but waned in less than a week. It will take years for the poison of Brexit to clear.The Brexit referendum was intended to settle the issue of Britain’s relationship with the EU. But for companies investing in the UK, it has been open to an era of uncertainty that contrasts vividly with Britain’s hard-won reputation for boring predictability. So the question of all is: “WHAT WILL HAPPEN ?!”/Investing.com3
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