In particular, announcing a ‚hard Brexit‘ has raised concern among market players. May highlighted in this context two important points: the United Kingdom will, on the one hand, dismiss the EU laws and, on the other hand, accept to lose access to the EU single market in order to gain back control on immigration again.
This was undoubtedly a highly political discourse full of pathos and pride. In economic terms, however, the future of the UK appears to be more uncertain now after May’s speech. Investors will want to wait and see how the process of exiting the EU will be carried out. The Pound plunged today against the US Dollar below the July low of 1.2798 – the lowest level since the early 1980s. The other major currencies also continue to gain versus the Pound, which should lead to higher inflation pressures due to rising import prices. On the other hand, the FTSE 100 rose today above the important level of 7000 points – driven by hopes for further interventions by the Bank of England.