Archive: June, 2017

Brexit continues

Theresa May’s gamble failed – the Conservatives lost their parliamentary majority in the general election on 8 June and have turned to the DUP to support them in forming a new government.

In March I examined the constraints facing the British government and the EU to provide some indication of the impact of Brexit on prices in a blog called Brexit Begins. Although the general election results have cast doubt over the government’s plans, it is still possible to draw three broad conclusions.

Firstly, Mrs May’s priorities must change to put the economy and jobs first. This suggests that the single-market and customs-union will remain options.

Secondly, the vast quantity of Brexit-related legislation will be harder to process in a hung parliament. This means that Mrs May must compromise and consider the demands of Remainers.

Finally, far more time is needed than is available so Mrs May must accept the EU’s sequencing plan, which means dealing with the Article 50 divorce before discussing new trade arrangements. That makes a case for more generosity from the British side, particularly over EU citizens in Britain and the sums needed to pay the “Brexit bill”.

Many consider a hung parliament to be a bad thing. It the case of Brexit, however, it may deliver a better economic outcome which will be good for buyers.