Download full article

The week in rev-EU

Key points

  • The past week has been a pivotal one for Brexit. Parliament has resoundingly rejected the government’s negotiated deal for a second time; ruled out a “no deal” Brexit at any stage; and sought to delay Brexit. We review the week’s events.
  • The coming week is also important. Parliament will have a third “meaningful vote” over the deal (MV3). We expect this to be rejected again, but by a much narrower margin.
  • The EU Summit on 21 March will also have to approve the UK’s application to extend Article 50. We believe it will do so for a short, two/three-month period. But this is far from a foregone conclusion.
  • We believe the chances of a “no deal” Brexit are falling. And continue to see an orderly exit to a transition around mid-year as the most likely outcome, something we consider a relatively benign economic outlook. However, the prospects for a longer delay have risen.

A pivotal week for Brexit

The past week has been significant in the Brexit process. Parliament voted on three motions and a number of important amendments. The following provides a brief overview of the salient points and events. We then provide our outlook of how the process could proceed from here. We are mindful of the adage that anyone that thinks they see a clear way forward from here, doesn’t understand the situation. With that in mind we discuss our central expectation, the likely alternative paths and briefly reiterate our expectations of the economic consequences of each outturn.

 

DISCLAIMER
This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.
This document has been edited by AXA INVESTMENT MANAGERS SA, a company incorporated under the laws of France, having its registered office located at Tour Majunga, 6 place de la Pyramide, 92800 Puteaux, registered with the Nanterre Trade and Companies Register under number 393 051 826. In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.
In the UK, this document is intended exclusively for professional investors, as defined in Annex II to the Markets in Financial Instruments Directive 2014/65/EU (“MiFID”). Circulation must be restricted accordingly.
© AXA Investment Managers 2019. All rights reserved