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Deal or no deal … or no Brexit at all?

November 2018

Months of Brexit speculation and uncertainty came to a head in November as the UK and the EU finally succeeded in reaching a Brexit deal. MPs will vote on the deal on 11 December, but there are doubts whether it will receive enough votes. The EU has stated that it will not contemplate a renegotiation; therefore, if the deal is rejected by Parliament, political turmoil is likely to follow. 

  • The Democrats took control of the US House of Representatives
  • Italy refused to back down over its budget
  • Japan’s economy contracted in Q3


Months of Brexit speculation and uncertainty came to a head in November as the UK and the EU finally succeeded in reaching a Brexit deal. European Commission (EC) President Jean-Claude Juncker said: “I invite those who have to ratify it in the UK House of Commons, to do so ... It is the only deal possible”. The agreement was supported by the Cabinet, although Brexit Secretary Dominic Raab announced his resignation. MPs will vote on the deal on 11 December, but there are doubts whether it will receive enough votes. The EU has stated that it will not contemplate a renegotiation; therefore, if the deal is rejected by Parliament, political turmoil is likely to follow as the UK faces the prospect of a disorderly Brexit or no Brexit at all. The International Monetary Fund (IMF) warned that a no-deal Brexit could create “high trade and non-trade barriers between the UK and the rest of the EU, with negative consequences for growth”. The FTSE 100 Index fell by 2.1% during November.

EC President Jean-Claude Juncker: “It is the only deal possible”

As expected, the US midterm elections ended with the Democrats taking control of the House of Representatives while the Republicans retained control of the Senate. The result reduced the likelihood of further fiscal stimulus; looking ahead, investors’ attention is likely to revert to the issue of trade as tensions between the US and China remained unresolved ahead of the G20 summit in Buenos Aires. Elsewhere in the US, relations between the Federal Reserve (Fed) and President Trump continued to sour. Although the Fed left its key federal funds rate unchanged in November, another increase is widely expected to be implemented in December. Over November, the Dow Jones Industrial Average Index rose by 1.7%.

Having unveiled a budget that deviated from official European Council recommendations, Italy’s Government refused to back down to the European Commission’s (EC’s) demands by revising its plans. The FTSE MIB Index ended the month 0.7% higher. Meanwhile, Germany’s economy contracted by 0.2% quarter on quarter during the three months to September as global trade tensions took their toll on export activity. Over the month, the Dax Index fell by 1.7%.

Japan’s economy contracted during the third quarter, shrinking at an annualised rate of 1.2% as a series of natural disasters hit activity over the summer. The Nikkei 225 Index rose by 2% over November. 


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