In this briefing:
- FLASH: UK Parliamentary Theatrics Divorced from Deal
- Trade War Uncertainty Bites into Investment Spending and Production
1. FLASH: UK Parliamentary Theatrics Divorced from Deal
- The government was defeated on a motion reiterating the approach passed on 29 January after Eurosceptics abstained in protest at the implied opposition to no deal. It does not bind the government or show no support for an amended deal.
- A state-dependent backstop break clause remains the most likely outcome, with the probabilities of a deal, no deal, and no Brexit still roughly 55:30:15, in my view. Parliamentary theatrics are not changing the facts on the ground.
2. Trade War Uncertainty Bites into Investment Spending and Production
Import elasticities. Ease of transferring business between countries. Reliability of alternative supply chains. Time taken to relocate production. The list of unknowns on how easily companies could relocate production from China goes on and on but the bottom line is that uncertainty has been raised and that is bad news for global growth.
In Reality Check: China and the US Trade War, we wrote “Even if the Trade War ends tomorrow, the damage has already been done”.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
