Page 9 - ISQ January 2021

JANUARY 2021

Brexit: A Deal at Last!

Jeremy Batstone-Carr, Interim European Strategist, Raymond James

And so, four and a half years to the day after the UK voted to
leave the European Union after more than forty years of
Financial market reaction to
membership and just seven days before the end of the “
year-long transition period, a Brexit deal has been agreed confirmation that a deal had, at last,
and now ratified by both the UK parliament and by EU been struck was muted. ”
authorities. By reaching an agreement, a potentially messy
and disorderly no-deal departure, in the midst of the
pandemic, has been avoided. In large part, this had to do with the fact that agree-
ment (on trade at least) had been struck on Christmas Eve
Has anything changed? Inevitably, COVID-19 has stolen the show. when the European stock and bond markets had closed.
The pandemic set the narrative throughout 2020 and has dominated The pound’s reaction proved underwhelming too, this a reflection
the conversation again as the New Year gets underway, relegating of the widely, if not firmly, held view that a deal of some description
Britain’s departure to the inside pages. For the intrepid traveller, would be reached before the clock ran down at 23.00 GMT on 31st
braving the Eurostar from London St. Pancras to Paris Gare Du Nord December. Prior to the deal’s confirmation, sterling had risen from
(even overseas visits once regarded as routine) now feels like a trip $1.33 to $1.37 and from €1.09 to €1.11. Arguably, the best news of
into the unknown. all, for those responsible for crafting the agreement, is that there
has been no “sell the news” reversal, or at least nothing outwith
The first sign of change comes upon arrival in the French capital. No
longer can one stroll, expectantly, onto the station concourse. Now, the dismal news relating to yet another national lockdown.
one queues with one’s fellow subjects on the platform before being The document itself runs to well over 1,000 pages of densely
directed to a customs door. Papers are required before being ushered worded legalese and attempts to establish an outline as to how
through by somnambulant officials. This, for many, will likely be the the relationship between the two parties might operate in the
first clear indication of Brexit in action. Financial market reaction future. Last-minute hitches appeared to concern fisheries, a hugely
to confirmation that a deal had, at last, been struck was muted. contentious issue on both sides. An indication as to who gave what
ground in negotiation might be gleaned from the belief that the UK

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