The announcement by the british Prime minister, Theresa May of the opening of the discussions on the Brexit by the end of the month of march had plunged the british currency. True barometer of the mood of the market, the pound has dropped sharply against the dollar and the euro after the announcement of the ruling. This rekindled fears of a painful divorce on the economic plan.
The decision of Theresa May to activate “before the end of march” article 50 of the Lisbon Treaty, which will trigger the discussion of the output of the european Union, has rekindled the uncertainties related to the complexity of the forthcoming negotiations and their outcome. As a result, the pound has fallen to 87,46 pence for one euro, its lowest level since early August 2013, while falling to 1,2846 dollar for a pound, its lowest level since the start of July last, when it had reached its lowest level since June 1985.
All observers panic
what Ms May, who has in particular meant that his country would respond to the request of the British to control the influx of european migrants, suggest that ” the United Kingdom could be tempted by what is called a Brexit hard “, that is to say, a separation without compromise, which would deprive the business community of any flexibility and visibility, highlighted Ipek Ozkardeskaya, an analyst at London Capital Group. “It is generally accepted that, most May insist on the control of immigration, the more the EU is likely to close access to the single market “, gave their side analysts at Rabobank.
And to Holger Schmieding, chief economist within the German bank Berenberg, a “Brexit ” tough”, that would be a strong limitation of economic immigration, ” may be the most damaging to the british economy over the long term “. Among the political leaders, Tim Farron, the leader of the liberal democratic Party, said that the announcement of Theresa May is a ” disaster “. Because he is afraid that it will result in loss of access to the single market for the Uk, which is vital in particular for the financial sector.
so far the british economy is doing well
In support of Theresa May, it does not seem to be overly concerned about it, even if it is aware of begin a difficult period. Interviewed Monday morning by the BBC on the sidelines of the conservative conference in Birmingham, the british Finance minister Philip Hammond has admitted that the Uk economy was facing “turbulence” and “roller coaster” in the negotiations to come. “There will be a period of two years, or perhaps even more, where the companies will face uncertainty about the final nature of our relationship with the european Union “, he stressed.
For the time being, however, despite the doomsday scenarios drawn by the supporters of maintenance in the EU before the referendum of June 23, the british economy seems to be proof of great resistance. “There is still uncertainty, but the sky has not fallen on our heads, contrary to some predictions, has also observed in his speech in Birmingham, Theresa May, citing a number of indicators have been encouraging. Household consumption has not declined, unemployment has not increased, on the contrary, the construction sector is doing rather well. Philip Hammond announced on Monday a plan of 5 billion pounds for the last sector during his speech to activists, conservatives in Birmingham, as he has decided to abandon the objective of its predecessor to balance the accounts of the country by 2019-2020.
Last indicator date published Monday morning by Markit, the PMI index measuring activity in the manufacturing sector has reached in September the highest level since mid-2014, taking advantage of the decline of the book. Because the decline of the british currency does not represent a bad news reinforcing the price of imported products for consumers. In addition to that it inflates the purchasing power of tourists with other currencies, it gives a breath of fresh air to many multinational british exporters who are realizing a large part of their activity abroad. This is the reason why the London stock Exchange didn’t shake on Monday morning and was displayed the same in a net increase of over 1% in mid-day.