The Best Christmas Gift For UK: ‘BREXIT’

Before  the upcoming Holiday season, many people in the United Kingdom and even those in the European Union received an early Christmas gift following the announcement of UK’s election results, with PM Boris Johnson’s Conservative Party winning the majority. What a way to start the new year 2020 by putting behind the 3-year long Brexit issue. 

The Conservatives (Tories) won a total of 365 seats while beating the benchmark seats of only 326 seats needed for a majority. PM Johnson will be creating history as the PM to end the deadlock in Brexit, surpassing his predecessor, Theresa May, after being defeated by her own Parliament back in May this year. 

PM Johnson is now set course to start the process of the Withdrawal Agreement Bill (WAB), mostly by this week, as he brings the bill through the Parliament. The law is aimed to be completed as early as Christmas, for the country to leave the European Union before the January 31 deadline. 

However, delivering Brexit and getting Brexit done entirely are two different things. If the UK can leave by January 31, the country will need to successfully negotiate a trade deal with the EU by the end of June. January 31, the trade agreement will only have up to 5 months before the PM needs to decide on whether or not to extend the transition period either by one or two years. 

Tensions are caught up in the hectic process as PM Johnson previously ruled out any form of extension, while reiterated during his winning speech that Brexit would happen without any more ‘ifs, buts & maybes.’ The trade agreement with the EU will require more than 5-months time following standard procedure. If no deal is made before the end of June 2020, the country will be forced to leave the bloc without any trade deal. 

Following the market after the release of the UK’s election results, the pair of GBP/USD rose to its 1.3500 level, before retracing from the high-levels at the end of the trading session. Pair of EUR/GBP fell to more than 3-years low, while managed to pare part of the losses at the end. 

The currency’s technical correction is mostly due to investors taking profit from the tremendous jump in value, allowing the currency to catch its breath before furthering its rally. Now, fundamentally speaking, higher levels could be reached, if and only if, a smooth transition is granted regarding the forthcoming process of leaving the bloc.

Photo Credit: www.retail-week.com/blowers-retail-cartoon/ – By Patrick Blower