Richard Penny has done his homework. He enters the meeting room on the first floor of Crux Asset Management’s Pall Mall offices clutching the latest issue of Money Observer and keen to talk about a recent feature on whether the size of a fund matters. He thinks smaller funds do better – which bodes well, as in September he launched a new special situations vehicle at the boutique fund firm, which he joined this summer after 15 years at investment giant Legal & General.
At the end of 2017, the IA Europe ex UK sector was the place to be. Having shaken off the rising nationalist threat, shiny new leaders such as Emmanuel Macron looked set to take Europe into a new era. This year, in contrast, has reminded investors that Europe is still, well, Europe: mired in political problems, with growth slowing. The performance of European stock markets has reflected that weakness.
5 December 1933: Prohibition repealed
Leaving the European Union without a deal could cause the largest contraction since the Second World War for the UK’s economy, according to the latest warnings from the Bank of England.
In analysis produced for to the House of Commons Treasury Committee, the Bank outlined the potential economic impact of various ways the UK might leave the UK.
With just a few months left to go before the UK leaves the European Union (EU), investors are likely to be feeling nervous. At the time of writing, the UK had a potential deal on the table with the EU. However, with several challenging hurdles still to clear, it’s difficult to rule out a ‘no deal’ or ‘hard Brexit’ scenario, which would see the UK give up full access to the single market.
The Brexit countdown clock has ticked below the 150-day mark, and as things stand (at the time of going to press in mid-November) there is every chance the UK will leave the EU without a deal in place. Such a prospect will further unnerve investors who have on the whole been giving UK equities the cold shoulder since June 2016 when the referendum on EU membership took place.
For investors in UK property, there are a multitude of reasons to be concerned.
With just a few months remaining until the Article 50 deadline, the chances of a hard Brexit have increased and there are worries about a number of UK property sectors – namely retail, London offices and London residential.
Markets have responded positively to the news that the UK and European Union have reached an agreement.
However, the rally in the pound should be put into context as it continues to trade in a range that we have seen since August.
The fact is that Brexit is not a simple case of “deal or no deal” and there are plenty of opportunities for more twists and turns in this story.