One of the biggest worries to the global share market two years ago was the UK voting to leave the EU, commonly known as Brexit.
Two years later and not much progress has happened in relation to the UK and the EU coming to an understanding about what the various economic, judicial and political agreements will look like.
In-fact, the last few days of goings on in the UK may mean Brexit comes to a halt – at least for the time being.
The UK is scheduled to leave the EU on 29 March 2019. However, Brexit Secretary David Davis and Foreign Secretary Boris Johnson both resigned, unable to support Prime Minister Theresa May’s half-Brexit vision for the UK.
There are some Conservative Party MPs who want the UK to completely separate itself from the EU and be as structurally tied to Europe as much as Canada or Australia are.
However, many ‘Brexiteers’ were hoping that it would be possible to leave the EU whilst still retaining access to the single economic goods market but dropping some of the EU pillars like free movement of people.
The problem for investors and businesses is that this creates enormous uncertainty. The UK government doesn’t appear to have the political strength to get anything through Parliament.
The pound is already weakening and could do so further if anyone challenges the PM’s leadership.
A Brexit with no negotiations in place could be bad news for ASX businesses like CYBG Plc(ASX: CYB), Ramsay Health Care Limited’s(ASX: RHC) UK operations, Janus Henderson Group(ASX: JHG) and Pendal Group Limited(ASX: PDL).
For now I wouldn’t want to invest any new money into heavily-UK-related businesses until the path to a stable Brexit is known.
Motley Fool contributor Tristan Harrison owns shares of Ramsay Health Care Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.