Unless you have been living in isolation, under a rock or in a total media vacuum, you cannot have missed the recent scuffling in the UK parliament.
To recap: last week, Prime Minister Boris Johnson asked Her Majesty the Queen if he could suspend (or prorogue, if you want to use the proper lingo) parliament. He said it was so his government could work on its “domestic agenda”, which not many people believed. Instead they suspected (and it turns out, thanks to a leak from Number 10, to be true) that it was a ruse to hold off MPs from voting to stop the government crashing the UK out of the European Union on October without a deal with Brussels.
Without going into too much political and constitutional history, the Queen had very little option and agreed to suspend MPs from sitting, starting in a week or two, and everything – not to put too fine a point on it – kicked off massively.
People up and down the UK marched to protest, lawsuits were lodged in Scotland, Wales and Northern Ireland, and some MPs, who think that a no deal Brexit is tantamount to national economic suicide, launched their own bid to prevent it happening.
As a result, PM Johnson and his advisers have threatened to “remove the whip” or throw out of the Conservative Party any Tory MP that votes with a move that would thwart a No-Deal Brexit.
The PM has also wafted the idea of sending us all back to the polls to vote in a new set of MPs, but he needs opposition party support for that. However, if he gets it, we are potentially looking down the barrel of a general election on October 14. The third since May 2015.
Oh, and Number 10 welcomed a rescue puppy called Dilyn.
So, what could this mean for investors?
This week, currency markets, which had almost grown tired of this constant Brexit wrangling, woke up and plunged sterling down to its lowest point against the dollar since October 2016.
During this period, the FTSE 100 fell a bit but was still 1,000 points higher than at the start of the year, supported, potentially, by the fall in sterling making UK company stock a little bit cheaper for international investors.
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Over the sea, European stocks in the Euro Stoxx 50 were down, too, as the continent’s companies would also be hit by a no deal outcome, while the US is reacting to its own political news as new tariffs between it and China depressed pre-opening market prices.
Where does this leave us? Honestly, it is hard to call.
By the second week of September, we could be gearing up for a general election or be doubling down on preparations for the no deal Brexit the government has spent £100m on a publicity campaign to tell us all about.
In either case, we are in for a bumpy ride.
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Financial markets hate uncertainty, and the UK has it in bucketloads, so get ready for some knee-jerk reactions and potentially some economic whiplash.
This volatility can be an investor’s friend, but only if you are sure which way the wind is blowing, so it pays to take care.
To quote Winston Churchill, it is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. Buckle up!
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