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OPINION

Brexit begins

Brexit begins
July 7, 2017
Brexit begins

That means I am still catching up on four weeks’ worth of magazines, but it’s obvious that the team have done a cracking job in my absence, covering markets that continue to confound expectations, not least the S&P 500 which hit a new record mid-month – I return no less nervous that a correction is long overdue than I was previously, although still unsure what a trigger for this may be. Two of the month’s four issues addressed the thorny issue of what Brexit negotiations may bring and how investors deal with them. It is fair to say that this is still something of a moving feast, with many conflicting views of what lies in store, but we will add to this series on a regular basis as information emerges that allows us to more accurately assess Brexit’s likely impacts on a sector-by-sector basis.

It is already apparent that two industries in particular are moving quickly up the government’s priority list: food and pharmaceuticals. It has been a long time since agriculture was an especially meaningful component of the British economy, but it is nevertheless an emotive topic, and also important to investors in the London markets, with representation from producer to retailer. What is becoming increasingly clear is that with Michael Gove – a politician as radical as Tories tend to be – taking over as Environment Secretary, the agricultural Brexit is unlikely to be a soft one, and indeed he has wasted no time in setting about recovering British fishing waters.

Another highly emotive, but much more economically important, subject is the NHS, and Megan Boxall did a great job of stripping this emotion out of her excellent piece on the role of private companies within the health service. For many, the presence of private businesses in the NHS represents a step on the road to a US-style insurance-based system. But economic realities mean the NHS needs private suppliers, not least suppliers of the billions of pounds worth of medicines it prescribes each year. And timely access to new treatments is at the core of the government’s Brexit concerns, as well as the billions in funding the UK’s universities and businesses receive in drug development funding from the EU. One suspects that the UK’s Brexit negotiators will need to be far more conciliatory in their approach to this industry. Either way, the game is just beginning and there will be trade-offs before a deal is reached. We’ll be making sure they don’t catch you off guard.