Investment Clock insights

Theresa May's Hard Brexit errs on the side of over-doing stimulus


Trevor Greetham

3 October 2016

The Prime Minister’s new mantra can now be read as 'Brexit is Hard Brexit and we’re going to err on the side of over-doing stimulus'.

Brexit of any kind will be a headwind to growth but policy makers do not know exactly how much of a headwind. There is substantial political will behind making a success of Brexit and that means stimulus – fiscal and monetary. Judging from the strong rebound in business confidence, the devaluation of the pound is already having a positive impact on manufacturing. With Hard Brexit in the price and economic data surprisingly  positive, we have covered short positions in sterling. We would most likely move overweight sterling assets if the exchange rate takes another leg down.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.