Ben Lofthouse, Head of Global Equity Income, provides his thoughts on the vote on Brexit by members of Parliament and the impact of the uncertainty that surrounds the UK’s future relationship with the European Union.
Prime Minister Theresa May’s Brexit deal was defeated by a massive 230 votes in the House of Commons last night with Members of Parliament voting 432 to 202 to reject the deal. The outcome, therefore, of how Brexit happens is still highly uncertain, despite the fact that the official deadline to leave on 29 March is looming. While a ‘hard Brexit’ seems to be in few parties’ interest, the events of the last year show how much business and investor sentiment can be impacted by political events. The plus side of this uncertainty is that many equity markets around the world, including the UK, are significantly cheaper than a year ago, and offer a wide range of investment opportunities that allow investors to diversify their country and sector exposures to seemingly binary situations. It’s ‘wait and see’ in terms of understanding the UK’s future relationship with the European Union and as a result market uncertainty looks set to continue.