Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Irish border core to Brexit agreement

The land border between Northern Ireland and Eire is the conundrum which offers the key to most of the other Brexit issues, according to John Rowland of Cicero.

Video poster image

Irish border

The core issue of Brexit is the Irish border. It is a laboratory for all the Brexit issues, according to John Rowland, executive director of Cicero.  The main issue is how to resolve the land frontier, in the context of the history of the troubles, with the determination on all sides not to upset the political stability in Ireland.

In her speech in Florence in September last year, Prime Minister Theresa May made clear her plans – the UK would be leaving the customs union, the single market, and European Court of Justice jurisdiction (ECJ). All of this points to a hard border in Ireland.

But, Rowland suggests, if extraordinary solutions are found and compromises made on the North-South issue, it shows what might be possible for wider UK relationship with the EU.

Find out more about why Brexit is important to traders.

Brexit vote

The UK Parliament now has a vote on the divorce deal, and a substantial majority of MPs are remainers. The more influence parliament has, Rowland said, the more pragmatic compromises there could be from government to get the deal ratified. Hence the softening of Cicero’s 'Brexit-o-meter'.

UK will be broadly a sovereign country, with as much cooperation as we can get away with without being in the single market. The Brexit is still a fairly hard Brexit.

He expects no second referendum, nor a different answer if there was one. Most people just want Brexit delivered.

The Leave ascendancy may however be ebbing. A recent BMG poll for The Telegraph found 51% wished to stay in Europe, while 41% backed Leave. As well, a Survation poll for the Mail on Sunday found 50% wished a vote on the final terms, with 34% against it. 

Divorce deal

With less than 14 months remaining, the UK Cabinet needs to agree on its strategy. There are two camps in cabinet, Rowland observed, one looking for minimum cooperation and maximum freedom, and the other maximum cooperation and being tied to the EU direction. He expects a common position will be communicated by the PM in similar fashion to Florence.

Once the deal is done

In March 2019 there will only be the outline of a deal agreed, and the UK will be out of Europe, he said, but it won’t seem like that. With at least two years of transition to follow, the status quo will likely continue, budget payments will still be made. Only when the final relationship agreement is finalised will changes become apparent.

Some have put forward Canada’s free trade agreement with the EU as a basis for the UK’s future relationship with the bloc. That deal took nearly eight years to negotiate.

UK ‘remain’ cabinet ministers are encouraging Theresa May to look into Norway’s arrangement, which would be a more ambitious free trade deal than Canada’s. It would involve payments to the EU continuing, but the lack of UK payments on Brexit would bore a deep hole in the EU budget longer term.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer