Article 50 triggered marking the beginning of Brexit
29th March 2017 will go down in history as Prime Minister Theresa May officially served notice that the United Kingdom is to leave the European Union (EU), 44 years after it joined the European Community. In a 6 page letter, May struck a conciliatory tone asking for both sides to conduct the exit process in a "fair and orderly manner...with as little disruption as possible on each side".
However many have noted that her desire to discuss the disentanglement of EU legislation in parallel with the establishment of "a new deep and special partnership" between the UK and the EU has already drawn disapproval from German Chancellor Angela Merkel. Yesterday in response, Merkel said that “the negotiations must first clarify how we will disentangle our interlinked relationship. Only when this question is dealt with can we – hopefully soon after – begin talking about our future relationship.”
Donald Tusk, receiving the letter by hand, stated that “After nine months, the UK has delivered", concluding a sombre speech by noting that “as for now, nothing has changed. EU law will continue to apply to and within the UK. We already miss you, thank you and goodbye.”
Commentary
Today, May and her cabinet will unveil a white paper outlining the legislative steps involved for the UK's withdrawal from the EU in the Great Repeal Bill. This white paper will consider how the Government plans to tackle EU legislation that cannot be easily converted to UK law. The House of Commons warned this will be one of the largest legislative processes ever undertaken with around 1,000 pieces of statutory instruments needed to integrate EU law into the UK through secondary legislation.
The disentanglement of the legal framework is only one of the many challenges the Government now faces. Alongside this, they must carefully negotiate the rights of UK citizens in the EU and EU citizens in the UK, the trading terms for businesses operating in what will become two separate markets, the transition of financial regulation, the future of valuable financial "passporting rights" and an ongoing co-operation between both sides for the security of the UK and EU, to name but only a few of the issues to be agreed upon.
We will continue to closely monitor markets and will pay close attention to the value of sterling with its impact on inflation, which has risen sharply in year-on-year results since the June vote. The Bank of England must closely track inflation and economic data, including unemployment levels, with crucial decisions required of them come their next meeting in May. With interest rates so low, inflation rising and the pound well below long-term averages, 2017 presents a new paradigm for policymakers.
Should you wish to discuss how to obtain the most optimal savings portfolio for your cash during these times, please do let us know and we'll be happy to assist.