It was the best of times, it was the worst of times – however you felt about the UK’s time in the European project, at 11pm GMT today it will all be over.
Well, almost. Though the UK has waved goodbye to its MEP seats in Brussels, and the Eurostar will see a drop in passenger numbers, we are not quite yet out of it.
Until December 31 this year, we are technically still part of the EU – or rather, we are transitioning out of it. We are still duty-bound to abide by its rules, even if we don’t get a say in making them.
But what’s another 11 months? This date has been coming down the pipe at us for three and a half (sometimes excruciatingly long) years.
So, what can we expect to happen at 11pm? Well, not Big Ben’s bongs.
Nor, do many in the market think, will we drop off the dreaded economic cliff edge that many had foretold way back in June 2016. Why? We’ve been pretty much abseiling off that cliff since the referendum.
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Let’s look back at what’s happened, starting at where we were before all the referendum hullabaloo began.
At the end of January 2016, £1 was worth €1.31. Today, it is hovering around €1.19 – almost a 10% drop, but it did get as low as €1.06 last year as parliament wrangled with itself seemingly incessantly.
Against the US dollar, things have moved in a similar direction. At the end of January 2016, £1 was worth $1.42. Today, we’re hovering around $1.31, a 7% drop, with the lowest point being around $1.21 last year.
Of course, there have been other factors pushing around the euro and dollar, and it’s not all been bad news for the UK either. For example, having a relatively weak currency generally means our goods are cheaper to export to people paying £ prices with € or € currencies.
It also means our listed companies are cheaper to invest in, which partially explains why the FTSE100 has risen from 6,083 four years ago to around 7,585 today – a 25% increase!
However, if the stock market is flying, the UK economy is not yet on full steam ahead.
In his final interest rate call of his almost seven-year tenure, Bank of England Governor Mark Carney yesterday warned that the UK’s economy was growing less quickly than expected, mainly due to Brexit uncertainty, and low productivity continued to be a problem.
But this is now an issue for Carney’s successor, Prime Minister Boris Johnson and the rest of us – and we have 11 months to turn the ship around.
Until then, let’s raise a glass at 11pm – whichever side of the Brexit aisle you were on, this has been a long time in coming.
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