FTSE and GBP rise as Brexit talks begin
|This morning has seen moves higher in both the FTSE100 and the pound as negotiations between the UK and EU finally begin. UK blue chips and stocks on the continent are both firmly higher as investors have begun the week in a bullish mood.
“Terms of divorce” to be discussed first
The negotiations on the UK’s exit from the EU are extremely complex and multifaceted, with many experts believing it nigh on impossible that a deal can be concluded with a satisfactory outcome within the two-year window currently designated for the task. Nonetheless, talks must begin somewhere and just under a year after the historic vote saw the Leave campaign prevail, David Davis, the UK’s Brexit secretary and Michael Barnier, the EU’s chief negotiator, have met this morning for the opening session of talks which marks the first baby steps in agreeing on a deal. The first meaningful discussions will revolve around the “divorce terms” - meaning the amount the UK will have to pay to the EU going forward - as well as what Brexit will mean for UK nationals living in the EU and EU nationals who reside in the UK. The UK would like to swiftly move through this stage and get to the crux of the matter with trade and immigration the duel main topics, but the EU has insisted that until these divorce terms are finalised discussions on future trade and immigration will not occur.
PM May’s position remains under threat
The loss of 13 seats by the Conservative party in the recent election that was called with the aim of increasing their majority has come as a massive blow to PM Theresa May and her position remains under threat despite the likely announcement of a Tory-DUP coalition in the coming days. Reports in the weekend press suggest that should events not play out in her favour in the coming days then May would be forced to step down if she failed to win the vote of the Queen’s speech after the State Opening of Parliament on Wednesday. Boris Johnson and David Davis have emerged as the frontrunners to be the next Conservative party leaders and whilst they remain publically behind the PM, they will be waiting in the wings should her position become untenable in the coming days.
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