SINGAPORE (Sept 2): The British pound dropped over 1% as newly minted Prime Minister Boris Johnson gained approval from Queen Elizabeth II to suspend Parliament, a move many say will devastate any attempts by members of Parliament to stop a no-deal Brexit. The FTSE 100 Index dropped as well.
“The rare sight of the stock market and the currency market coming to the same conclusion — namely that the UK is best avoided for now — throws into sharp relief investor sentiment towards a no-deal -Brexit,” writes Seema Shah, chief strategist at Principal Global Investors. “While turbulent markets will obviously create some attractive selective opportunities and relative value trades for stock pickers, the big international investors now look increasingly likely to decrease their exposure to the UK.”
As the Oct 31 deadline looms for the British exit from the European Union, Johnson, whom many call “Britain’s Donald Trump”, is being accused of perverting democracy and running Parliament roughshod into a disastrous no-deal scenario. However, Johnson insists that the suspension is needed to enact a “bold and ambitious legislative agenda”.
