Whilst in terms of outcomes, global politics and central bank offerings have been relatively subdued this week, it is this news that has been prevalent.
Following UK Prime Minister Theresa May having her Brexit deal rejected for a second time last week, this week the Speaker of the House of Commons, John Bercow, has ruled out another vote on Theresa May’s Brexit deal if it was “substantially the same”. This saw May issue a letter to Donald Tusk (European Council President) requesting a 3 month extension to the UK’s planned exit from the EU at the end of this month. European Union leaders met on Thursday and set two deadlines for Theresa May, extending the enforcement of article 50 (UK’s exit from the EU) until 22nd May… however, this was accompanied with the caveat that if UK lawmakers do not approve her presented deal next week, the UK will have until 12th April to decide to leave with no deal in place, or to request a substantially long extension. With this in mind, to a certain extent this puts Theresa May in a clearer position, as any deal presented to UK lawmakers will essentially become a vote with 3 potential outcomes; Theresa May’s deal, a ‘no deal’, or a substantial extension (which could be seen as not fulfilling the will of the people!). Despite all of this rhetoric and some fluctuation in sterling, valuations in both the UK and European markets remain immensely attractive! The UK economy and markets in particular were backed by an accommodative and dovish tone from the Bank of England (BoE) head, Mark Carney, on Thursday as the BoE kept headline interest rates unchanged at 0.75% stating that uncertainty surrounding Brexit keeps them hesitant to increase rates and leaves them accommodative in terms of policy.