The facts as they stand are that 31 December, the day upon which the UK’s transition period will end, is ticking ever closer, and no trade deal, free or otherwise, has been agreed so far. Should that remain the case, the UK will exit the EU without a deal, and the New Year will see us begin trading with our nearest neighbours on WTO terms – an outcome that has been both feared and celebrated in equal measure. In September Boris Johnson set an informal deadline of 15 October as the day upon which a deal would be struck or therewould be no deal at all. But that day has come and gone and still trade negotiations rumble on.
In all likelihood, a trade deal will be reached – you only have to look as far as sterling’s sanguine response to the latest Brexit developments to see that is the expectation. Indeed, such has been the disruption caused by Covid-19 that it would not appear to be in either the UK or EU’s interests to create yet more uncertainty and the possibility of further economic pain. Similar negotiations in the past have often been resolved at the 11th hour, and the gap between the two negotiating sides has narrowed to the point where it no longer feels like an untraversable chasm.
Whether that also delivers better news to UK investors remains to be seen, although so many businesses have been eviscerated by other factors that no deal has slipped well down the pecking order of things to worry about. Take hospitality, for example, where worries about an exodus of EU workers have given way to worries about whether they will ever need as many staff again. Or oil and gas, and the existential crisis it faces as ESG permeates every aspect of investing. A Brexit deal will do little to restore certainty to sectors that now face permanent changes to the way they operate, for whatever reason.
But what is new? If the pandemic has taught us anything, it is that as investors we should always brace ourselves for change, of which Brexit is just one. The effects of Covid-19 have been rapid, but so have the effects of technology on many industries, for many years. And it is similarly easy to be caught out by creeping change, too, like the rise of ESG – so slow as to be almost imperceptible, but equally dangerous to the complacent investor.
