Brexit tensions intensify in May

Escalating political upheaval knocked investors’ confidence in May, and share prices suffered. Prime Minister Theresa May announced her resignation, triggering intense speculation over the identity and Brexit stance of her successor – the next Prime Minister.

  • The number of candidates for Conservative Party leadership reached double figures by the end of May
  • Business groups warned of the consequences of a no-deal Brexit
  • UK retail sales growth slowed and several companies issued profit warnings

To view the series of market updates through May, click here


Escalating political upheaval knocked investors’ confidence in May. Share prices suffered: the FTSE 100 Index fell by 3.5% during the month, while the FTSE 250 Index declined by 4.3%.

“The news triggered fresh anxiety over the future path of Brexit”

Initially, it appeared that Prime Minister Theresa May was not willing to give up on the possibility of getting her Brexit deal through Parliament. However, as time went on, it became apparent that this was likely to prove fruitless, and eventually Mrs May announced that she would resign as leader of the Conservative Party from 7 June. Her resignation ignited intense speculation over the identity and Brexit stance of her successor – the next Prime Minister – and, by the end of May, the number of candidates for the Conservative Party leadership had reached double figures. 

The news triggered fresh anxiety over the future path of Brexit, with many questioning whether it will be possible to reach a deal by the 31 October deadline. The British Chambers of Commerce (BCC) urged the new Prime Minister to “work to avert a messy and disorderly exit”, while the Confederation of British Industry (CBI) insisted that a Brexit deal was “the best way forward” for UK firms, warning: “Short-term disruption and long-term damage to British competitiveness will be severe if we leave without one”.

Investors experienced a sizeable number of profit warnings during May. Travel company Thomas Cook issued its third profit warning in under a year, blaming an “uncertain consumer environment” and warning of “further headwinds” for the rest of its financial year. Funeral services provider Dignity issued a profit warning, citing a “significantly lower-than-expected number of deaths”, and warnings were also issued by metrology company Renishaw, banknote printer De La Rue, and value retailer The Works. Fashion retailer Superdry issued its third profit warning in eight months, and shopping centre owner Intu downgraded its rental income forecasts, highlighting a “challenging” 2019. Having risen at an annualised rate of 6.7% in March, UK retail sales growth slowed to 5.2% year on year in April as higher demand for clothing helped to offset falls in other main sectors. Elsewhere, Metro Bank raised £375 million from shareholders to shore up its capital position. The Prudential Regulatory Authority (PRA) stated that Metro Bank “is profitable and continues to have adequate capital and liquidity to serve its current customer base”.


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