Brexit Impact on Pound & UK Economy so far…

Mixed Economic data muddies the picture further while the Currency suffers

The never-ending saga of Brexit now has a new deadline — Oct. 31, 2019, by which the Brits have to decide whether they want to exit with or without a deal from the EU. Brexit is the latest of the 9 Black Swan Events in the Financial World that I wrote about in January. One of the biggest economic partnerships that have turned into a messy divorce with a resolution, not in sight.

It has been a rocky relationship since the signing of the Maastricht Treaty in 1992, which turned the countries of Europe into a single monetary union — this involved huge transfers of power to the new European Union. Britain opted out of the single currency and the social chapter. Britain finally subscribed to the social chapter in 1997 but decided to maintain its own currency — a decision that some say was right one considering the Euro’s woes for the past few years.

EU tried to solve their economic problems via a new treaty which the UK ended up vetoing after demanding exemptions in 2011. As a knee jerk reaction to the Brexit vote in 2016, the global markets fell sharply with the Pound & Euro both declining significantly as well. Gold, which acts as a traditional hedge against risk rose 6%.