Last Friday, Theresa May announced she would step down as leader of the Conservative Party on June 7th. The announcement followed a vote on Tuesday 21st May, where May’s revised terms for withdrawal met with overwhelming opposition from Conservative Brexiteers, the Democratic Unionist Party and Labour leader Jeremy Corbyn.
A Tory leadership contest will begin on June 10th, with more than 20 candidates expected to put themselves forward. Boris Johnson, Dominic Raab, and Jeremy Hunt are the current favorites to replace the PM by the end of July.
A news poll showed that over 70 Tory MPs intend to vote against May's revised deal in June. With a difficult hand to play and barely four months before the UK’s scheduled departure from the EU, the question is what lies ahead for the new leader and for the country?
What’s certain is that Theresa May’s successor faces one of the most daunting tasks of any recent PM. Renegotiating her deal to get it through parliament will be easier said than done. For this reason, a no-deal Brexit seems more likely than ever. In fact, many of the contenders would be prepared to leave the EU without a deal.
This could mean the beginning of an increasingly turbulent phase for the UK. Whoever succeeds May is likely to demand a tougher Brexit deal from Brussels, yet the EU has repeatedly said that it won’t rework the Withdrawal Treaty. This could be a worst-case scenario for big businesses, who would find their supply chains and foreign trade relationships severed with one stroke.
With the pound at its lowest level since early January, there’s already indication that financial markets are beginning to get spooked. Last week British Steel went into liquidation, blaming declining orders from the European Union on the uncertainty surrounding Brexit. The industry's trade association commented: “Unable to decipher the trading relationship the UK will have with its biggest market in just five months' time, planning and decision making has become nightmarish in its complexity."
The collapse puts around 25,000 jobs at risk, both within the company and its supply chain. This follows recent job losses and closures at Honda and Thomas Cook, reflecting business' lack of confidence in a post Brexit Britain. Despite some Brexiteer’s remaining optimistic about trade deals outside the EU, there’s likely to be another delay and a lengthy period of adjustment before the rebuilding begins.
For this reason, contractors and contingent workers will continue to fare best from the projected uncertainty. This is especially true in sectors that need to keep moving with global developments, such as IT, finance and engineering, and those that need specialist knowledge of international legislation, such as law.
Ultimately, the United Kingdom will leave with a transition deal, leave abruptly without a deal, or not leave at all. Whatever the outcome, it’s likely that there will be a general election before next spring, with both parties standing to gain from breaking the current deadlock in commons.
Brexit will have an impact on many sectors, among them, the UK property market. If you’re considering investing in property you might want to consider the long term forecast. Our partners CMME provide our clients with unbiased mortgage advice and solutions, read their professional predictions for the property market.
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