Investment - Articles - AXA IM's David Page: Opportunity for UK to express regret?


David Page, Senior Economist at AXA Investment Managers (AXA IM), comments on High Court ruling: “The pound has picked up sharply on the High Court ruling that the UK government does not have prerogative to trigger Article 50 without Parliamentary approval. This was unexpected and goes against the weight of legal opinion before the decision. The government can appeal this decision and the Supreme Court said it has already set aside time for an appeal (5-8 December). Or the government can ask Parliament for the right to trigger Article 50.

 “The risk to the former course is the decision is upheld and could potentially delay PM May’s deadline for Art 50 triggering of March 2017.
 
 “The risk of the former is that Parliament does not endorse the government to move this quickly. Delaying triggering Art 50 increases the uncertainty of the whole process. At the extreme, it increases the opportunity for the UK to express “regret” over the vote. Political commentary is discussing the increasing chance of an early election, in 2017. This still looks like quite a step, with neither the two-thirds majority nor vote of no confidence necessary to change the fixed-term Parliament viable/attractive options for Conservatives and risks of a political split along pro/anti-Brexit lines. But the certainty of the path towards EU exit has diminished a little in the face of this.
 
 “Market reaction has included a modest increase in both sterling and the domestically sensitive FTSE 250.”
  

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