The decision by Theresa May to postpone a vote on her Brexit deal in the face of an inevitable defeat (10 Dec) has added to a sense of chaos around both her Government and the UK’s exit from the European Union.

Business and financial markets hate uncertainty and UK assets have suffered a renewed sell-off with sterling falling to its lowest level in 20 months in the wake of May’s statement to the House of Commons.

Suggestions that any vote could be put off until at least January may force businesses into ramping up their no-deal preparations.

Predictably those businesses with most exposure to the domestic economy are among those to suffer the biggest hit (see table). This includes banks, supermarkets and housebuilders.

Investors also appear to be pricing in the enhanced possibility of a Labour government – hence the weak showing from utilities and Royal Mail (RMG) in recent days with the party previously suggesting these assets could be renationalised.

The airlines, whose ability to keep planes in the air could be affected by a disorderly no-deal Brexit, were also among the stocks to fall in the wake of the vote’s postponement.

Investors should note we are heading into the Christmas period when volumes are typically thinner anyway and this could exacerbate volatility.

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