Brexit Bear says….

19 Apr 2017

A survey of 1,000 UK SMEs reported in Global Banking & Finance Review (in case you missed it) found 60% are confident in the government’s ability to negotiate post-Brexit trade deals and 56% stated that the government is doing enough to support them. However, 47% feel that they’re being rushed to prepare for Brexit and 41% are concerned that importing will become more difficult post-Brexit. Lee Murphy, owner of Pandle, which conducted the survey, said: “It’s important that the Brexit negotiators keep SMEs top of mind during the talks. SMEs are the lifeblood of the UK and Brexit could easily make or break some of these businesses, especially when considering the tariffs that the EU may place on imports and exports.”

Theresa May’s plans to call a general election on 8 June have been largely welcomed by City figures who view the move as an opportunity for the PM to strengthen her hand in negotiations with the EU and perhaps fend off those backbenchers demanding a hard Brexit. Short-term uncertainty for business until June 8 is worth suffering in return for greater certainty that the PM can deliver a smooth Brexit, says CMC Markets founder Peter Cruddas, while analysts at Deutsche Bank believe “the deadline to deliver a 'clean' Brexit without a lengthy transitional arrangement after 2019” becomes less pressing. An increased majority for the government would also help it push through its Great Repeal Bill, the FT suggests while others say Mrs May will seek a mandate to end the triple lock on pensions and scrap the pledge to spend 0.7% of GDP on foreign aid.

The International Monetary Fund has upgraded its UK growth forecast again, predicting the UK economy would grow this year by 2%, an increase of 0.5 percentage points from the forecast it made in January. The IMF also upgraded its UK growth forecast for next year, from 1.4% to 1.5%.