UK: Time to get serious about Brexit – SocGen

Analysts at Societe Generale, notes that this is the year when the Brexit negotiations will start.

Key Quotes

“Talk is mounting of the need for, and possibility of, a transitional deal being struck. This is a highly attractive proposition because it recognises the immensely complicated nature of the negotiations, especially on trade and the length of time that will be needed to sort out all the details.” 

“But, amidst all the uncertainty, one thing is clear. The UK will impose some form of immigration control which, as it contravenes the “four freedoms,” will then lead to access to the Single Market being denied.”

“As part of the Brexit process, the Great Repeal Bill will be launched in the next parliamentary session. This will repeal the European Communities Act 1972 which incorporated European law in to UK law in preparation for the UK joining the EEC, the precursor of the EU, in 1973. Ironically, the bill is likely to convert the bulk of EU regulation, against which the Brexit camp bridled so strongly, back into UK law.”

“Thus far, the economy seems to have shrugged off the shock of the referendum result. We are delighted that it has confounded the more gloomy expectations of UK forecasters, including us, but we still fear and expect an uncertainty shock to hurt sentiment and thus growth in due course.”