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Market Turmoil As Brexit Plan Revealed

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BBC News reports today that the pound and shares in housebuilders and banks have fallen sharply after cabinet ministers Dominic Raab and Esther McVey quit over Prime Minister Theresa May’s draft Brexit deal.

Why have shares tumbled?

Shares in companies that do most or all of their business in the UK reflected the continued political uncertainty, as members of the Conservative Party and opposition politicians voiced their scepticism over the draft deal.

“The market has taken a big red pen to stocks which are heavily exposed to the UK economy like the banks, retailers and housebuilders,” said Laith Khalaf at Hargreaves Lansdown.

“These sectors were already under pressure, but the potential for an orderly Brexit to unravel in the next few days is causing further distress to be manifested in share prices.”

How has Brexit affected the pound’s volatility?

The Brexit process has been punctuated by big movements in the pound’s relationship with the dollar, something which can lead to big gains or losses for investors.

In the run-up to and immediate aftermath of the Brexit referendum on 23 June 2016, for example, the pound hit a peak of volatility against the dollar.

And as the graphic below shows, the events surrounding Wednesday’s draft agreement has triggered the greatest volatility for sterling since the referendum.

Read the full article at BBC News

 

Jasmine Lambert Chartered Financial Planner
Jasmine Lambert

Jasmine is the Managing Director and a Chartered Senior Financial Planner at Redwood Financial. She helps clients manage and grow their wealth and protect their estate. Jasmine also provides expert advice in our FREE Redwood Webinars, where you can learn more about Wills, Trusts and Estate Planning.

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