Britain is running out of time to negotiate its withdrawal from the European Union. The British government needs to make a deal with Europe and win approval from Parliament by the end of the year. In this conversation with Roger Hirst, Rupert Harrison of BlackRock, Helen Thomas of Blonde Money and Oliver Harvey of Deutsche Bank deliberate over whether the British pound, gilts or equities will be the best expression of the government’s success or failure. The clock is ticking. Filmed on September 28th, 2018 in London.
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Brexit: Make or Break (w/ Rupert Harrison, Helen Thomas, and Oliver Harvey) | The Exchange | Real Vision™
And there will probably be a moment to midnight in the negotiations where the market has to be pricing some reasonably high probability of a no-deal outcome.
I think more of the probability distribution is on higher interest rates. That's certainly my view on it.
There will be a lot of volatility in November and December over the parliamentary vote.
But don't underestimate the impact on the debate when suddenly there is a deal.
Welcome to The Exchange. I'm Roger Hirst And today, we're going to be tackling the thorny issue of Brexit. But not from the angle of whether it's a good thing or a bad thing, but really, what are the potential outcomes, probabilities, the key dates, and the key people?
With me, we have Oliver Harvey from Deutsche Bank. He's an FX strategist economist, and has been their specialist in Brexit since well before the referendum in 2016. We have Helen Thomas who runs Blonde Money, her investment research housing company, and has also been looking at how all 650 of the UK politicians may vote if there was a referendum or a choice coming up in the near future. And we have Rupert Harrison from BlackRock, where he's a portfolio manager. And before that, he was an advisor to the treasury.
So I'm going to kick it off, really just starting with the candidates. And maybe, Ollie, we'll kick off with you, but we'll see. What are the most important dates on this? What matters, and are there any questions?
Well, I think the most important date is parliamentary votes, which is probably going to be towards the end of November, beginning of December. Before we get there, there are a lot of dates along the way. We obviously had some negative rhetoric around the Salzburg meeting last week.
We have a Conservative Party conference. We have an October European Council Summit. We have another summit in the middle of November. The 17th has been the day people have highlighted, which is supposed to be when the final Brexit deal gets done.
We think that between now and the middle of November, or that November the 17th date, we will get a deal. There will be some political acrobatics to get there. Where we have a lot more concern is whether that deal between the UK and the EU 27 actually gets through Parliament.
This parliamentary vote happens-- we don't know the exact date yet, but probably late November, early December. So I think that will be the really key date before the end of the year.
And what's the big date in March? And is that March in 2019 as well?
Well, March 29, 2019, is Brexit day.
It is Brexit day. But we've got an awful lot to get through before that. So key date, sometime probably in November. What are the key people to look at, and what are the key issues? Where do we go on this?
I think the next move has got to come from the British governments. And then you've got quite a short window between the end of conference season and this October summit, and, really, everybody is waiting for the UK move. And if there isn't a UK move, then I think we're going to have a big showdown at that summit. Because the European Union have taken the decision to say, OK, if we are not getting significant progress by this point, then the November summit's off, and we have a crisis moment.