Brexit is a hot topic for everyone in the UK at the moment. With newspapers and news outlets wanting the latest news on Brexit and the ongoing talks, there is no sign of a peaceful conclusion. In this article, we are going to look at the continued disruption that Brexit is having on the global stock market.
The Brexit Deadline
Brexit has been in the news frequently following the result of the referendum in June of 2016. With the deadline set for 29th of March, the conclusion was to be reached with a deal that worked for both the UK and the EU. However, there was no resolution in sight and Prime Minister Theresa May put forward a request for an extension. Though the negotiations have continued the deadline has then been pushed back to October 31st of 2019. Although there are a number of reasons to buy stocks, this uncertainty makes many people hesitant.
Versatile Stock Market
Brexit is also having an effect on stocks as the market is becoming more and more versatile. This is due to the lack of clarity that is present when talking about trade and the relationship between the UK and other companies. This is particularly prominent with the likes of BMW threatening to move their headquarters from the UK should we leave without a deal. This is vital to the success of UK exports as these plants make us a significant amount of money. However, with this uncertainty, we run the risk of losing this style of investment. This could affect the UK as there are a number of jobs at risk that could deliver a devastating blow to not only the economy but the unemployment rate as a whole.
International Business Threats
This level of uncertainty is also added to by several other businesses threatening to move operations to other European countries should the UK leave with a no deal. With businesses such as the car manufacturing industry dropping by as much as 45% as a result of ongoing political uncertainty. With the Brexit deadline now set to the 31st of October, there is set to be a 1% fall in investment which has been annual over the last few years and is only set to increase as the deadline draws nearer.
Ongoing Political Turmoil
In addition to the Brexit troubles, there is a lot of ongoing political turmoil such as the search for the next Prime Minister in the UK. There are currently nine contenders that have put their name forward for the position, all of which have very different viewpoints on the end result of the referendum. These people are:
- Boris Johnson
- Michael Gove
- Dominic Raab
- Rory Stewart
- Esther McVey
- Sajid Javid
- Jeremy Hunt
- Andrea Leadsom
- Priti Patel
The result of this new Prime Minister is set to be announced on the 7th of June 2019, but this has caused yet another fluctuation, not only in the trade between the UK and other world businesses, there is fluctuation in the stock market making many second guesses whether or not to invest.
With all this in mind, as the Brexit deadline draws closer, only time will tell of how this brand new Prime Minister will lead the UK to the end goal of a successful Brexit deal for everyone involved.
The Yucatan Times Business