Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Comic: As its Ratings Collapse, Brexit Saga Grinds Toward a Grim Conclusion

Published 22/12/2020, 14:45
Updated 22/12/2020, 14:48
© Investing.com

© Investing.com

By Geoffrey Smith

Investing.com -- Once upon a time, sagas were exciting, exaggerating and immortalizing the heroic feats of Viking warriors, slaying monsters, winning demi-goddesses as brides and what-not. But there was a catch. Given the general lack of entertainment on long northern nights in the Dark Ages (aside from drinking and brawling), there was no pressure on the writers and performers to keep it short. Over time, as audiences became more demanding, the saga came to represent something dreary, repetitive and seemingly endless.

Which is why the term fits Brexit so well. After bursting onto the international news scene in 2016 as a raucous, populist rebellion against consensus thinking, it has morphed into an unspeakably boring slugfest of bureaucrats arguing over the mutual recognition of regulations, state aid and – God help us – fishing rights.

Fishing, which accounts for some 0.05% of Eurozone GDP, is reportedly the last big stumbling block to a deal on a trade relationship worth $1 trillion a year and much else besides – such as freedom of movement and security cooperation – on which no price can sensibly be put.

Neither the hyperbolic nationalism of the U.K. government nor the preening self-righteousness of the European Union can dress this up as anything other than a piece of political theater gone mind-numbingly and tediously wrong that most people would rather forget. A YouGov poll published on Tuesday showed that Brits, who famously voted 52%-48% to leave in 2016, now think by a margin of 51%-40% that it was a bad idea.

Too late. The end is in sight. The 11-month transition period that has allowed both sides to pretend that the U.K. hadn’t left the bloc in January comes to an end in nine days’ time. After that, in the absence of a deal, the two sides will have to apply tariffs and quotas to each other’s goods, like it or not: the World Trade Organization’s rules don’t allow anything else.

For nearly half a decade, foreign exchange markets have worked on the assumption that: 1) Erecting trade barriers where none previously existed would be a negative for both sides; 2) The U.K. would not be able to deliver on Brexiteers’ promise to bring back the glory days for the British economy (quite what kind of glory was never quite spelled out, but the odds of a fresh windfall from using gunboats to blow open the Chinese market for Indian opium must be quite slim, at any rate); 3) The high costs of No Deal would ensure that common sense prevailed to make the best of a bad job.

Little has happened to change any of those calculations in that time. As such, the discount applied to sterling has been relatively constant: it’s still trading around 10% lower against the euro and dollar relative to its level before the 2016 referendum. On both sides of the Channel, there are governments determined on spending big to reflate the economy, and central banks determined to accommodate them with equally big bond purchase programs.

If – IF – common sense can prevail and No Deal can be avoided, history would suggest that sterling is now somewhat undervalued against the euro. Bank of America Merrill Lynch’s regular fund manager surveys certainly suggest that U.K. assets – starting with the pound itself - are ‘under-owned’ and technically set up for a rebound. However, for that to be sustained, the U.K. has to prove that the Brexit process hasn’t permanently damaged U.K. productivity relative to the euro zone’s. The burden of proof is going to be heavy.

Latest comments

silly article... brexit was about sovereignty
No deal.... No problem! We can survive we are already growing better food and adapting to it.
Your article is highly opinionated. Do yourself a favour and just stick to the facts. I'm looking forward to a no deal now.
We British would actually settle for no deal, no problem.
We?... Speak for yourself... NOT ME.
False news. The media continue to invent numbers to satisfy their own agenda.
Always the same polls saying British are against Brexit but the truth is that every time the people were asked like in the 2016 referendum and 2019 general election, they clearly chose Brexit.
Like the electorate of Trump, the countryside has shown it's middle.finger to the intellectualsEurope is better off without the UK. China (and the US) pose big challenges for Europe and only a united Europe can make a first.I.like the British and happiness is.not measured by.money alone. If they they have no problem paying the price for sovereignty, then who are we to judge that?Off course, it is not very clever to say that the UK wants to be the Singapore of the continent. That leaves Europe no option but to.make.sure that the UK does.nit gain an unfair advantage
what's an "unfair advantage". any country can set it's policy to what it likes. the EU just wants to set British policy to suit Germany and France and you think that's acceptable because the UK has been part of the EU for so long.
Uk needs to leave..there is no such thing as " no deal"..We will trade on WTO terms, and the EU needs our market.Fishing is irrelevant. sovereignty is the key and the UK must stand firm
The terms that need to be fairly concluded as to the level playing field and adjudication are not down to bureaucrats, they are political essentials for both sides & fishing is all about Macron playing to the French gallery ahead of facing the re-election challenge. The EU & Macron in particular want to assure that no other member states depart by showing how hard it would be. There is much more at play here than bureaucracy.
Bad polemic article. Fishing rights? You don’t understand the negotiations, maybe that is the problem?
can't actually see the comic but thanks
UK stocks go only...down
If based on a YOUGOV poll ,do not hold your breathe if it is right. As sinking comes to mind. Similar to the Euro in the coming months when reality sets in to 2 or the other 24 of the 26 that are left on the Titanic.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.