BNY Mellon: Commentary on the British Parliament vote

BNY Mellon: Commentary on the British Parliament vote

Brexit Politiek Verenigd Koninkrijk
Britse Parlement.jpg

By Shamik Dhar, Chief Economist at BNY Mellon

“Sterling, FTSE and gilts are all reacting minute by minute to the changing probabilities of a no-deal and last night’s vote has reinforced this. As expected, markets have welcomed the sign of some certainty, sterling has rallied in the short term but I expect it will be more volatile as it responds to the next chapter of Parliamentary manoeuvres.

All things being equal, we could expect the FTSE100 to be broadly flat in the short term as the lower chance of a ‘no deal’ scenario is offset/balanced by the rise in sterling. Meanwhile, the prospect of the Prime Minister calling a ‘people versus parliament’ general election has also become more likely.”