The UK Government has progressed to the second stage of Brexit talks after securing a divorce agreement (8 Dec).

A summit starting today (14 Dec) in Brussels may see the opening salvo in a negotiation to agree a trade deal between UK and the EU. The market will be looking for positive noises on a transition agreement which will give companies some of the certainty they crave.

Judging by the reaction to the divorce deal, the main beneficiaries may be housebuilders who rose sharply on the day it was announced, although they were also supported by positive financial results from sector constituent Berkeley (BKG), as well as other domestic-focused names in the leisure, retail and financial sectors.

Perhaps the most significant takeaway from recent developments is the bolstered position of Prime Minister Theresa May. Shore Capital’s senior political adviser Matthew Elliot comments: ‘Theresa May is in the strongest position she has been in since the General Election, and is likely to be in post next Christmas.’

This arguably reduces the risk posed by the potential election of a Labour government which has a relatively radical agenda that could have a significant business impact. (TS)

‹ Previous2017-12-14Next ›