In the 1964 comedy classic ‘Carry On Cleo’, Caesar, as played by Kenneth Williams, famously laments: “Infamy! Infamy! They’ve all got it in for me!” The UK’s current leader, Prime Minister Theresa May, could be forgiven for feeling the same way as she finds herself getting battered from all sides.

Contrasting Fortunes

Meanwhile, across the Irish Sea, another prime minister, Ireland’s Leo Varadkar, is enjoying a far better Brexit, politically at least. While the political chaos and fragility in the UK captures all the headlines, we should not overlook the Irish political situation. Leo Varadkar, like Theresa May, leads a minority government propped up by a confidence and supply agreement (in Ireland’s case, Varadkar’s Fine Gael party made a deal with its traditional foe, Fianna Fail). This fragile coalition, formed after the last election in February 2016, has lasted longer than many predicted, perhaps because of Brexit rather than despite of it. Unlike his UK counterpart, the Irish prime minister’s handling of Brexit is very popular at home: 60% believe he has negotiated well, and 84% would rather cut ties with the UK than the European Union (EU).[1].

Among the many missteps the UK could be perceived to have made during its tortuous Brexit negotiations, perhaps two stand out:

  • An underestimation of Irish unity and commitment to the EU, despite the UK being Ireland’s largest trading partner, and the extent to which the EU would rally behind a remaining (obedient) member state, when pitted against a rebellious leaving member.
  • Not recognizing that the strength of the UK’s voice in the EU as a member and as an ex(iting) member is not the same: as one of the 28, the UK’s voice probably held disproportionate sway within the bloc, but, as one versus 27, it is drowned out by all the others.

More ‘meaningful votes’ are scheduled for this week in the UK. Another heavy defeat for the government looks likely, but, if recent form is any guide, Theresa May will ‘Carry On Regardless’.

EU Unity Under Scrutiny

EU unity will be severely tested once the ‘British problem’ is dealt with, as EU elections take place in May and several top jobs in European institutions are up for grabs before the end of 2019. There are also elections in Spain and in other EU nations later this year. For now, however, the focus remains on the UK. The lack of political leadership (from all sides) has seen the UK’s politicians pretend that the country just needed to have a national (or even intra-party) debate on what it wanted from Brexit, and once it agreed (which it still hasn’t), it would then be straightforward to deliver it.

Meanwhile, with the UK nearing the March 29 deadline set to deliver Brexit, and with all options seemingly now back on the table, (some of which may fill readers with horror depending on their Brexit stance), it is perhaps more a case of ‘Carry On Screaming’.

[1] Source: Sky Data, February 2019

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Important information

This is a financial promotion. Material in this publication is for general information only. The opinions expressed in this document are those of Newton and should not be construed as investment advice or recommendations for any purchase or sale of any specific security or commodity. Certain information contained herein is based on outside sources believed to be reliable, but its accuracy is not guaranteed. You should consult your advisor to determine whether any particular investment strategy is appropriate. This material is for institutional investors only.

‘Newton’ and/or the “Newton Investment Management” brand refers to the following group of affiliated companies: Newton Investment Management Limited and Newton Investment Management (North America) Limited (NIMNA Ltd). In the UK, NIMNA Ltd is authorized and regulated by the Financial Conduct Authority in the conduct of investment business and is a wholly owned subsidiary of The Bank of New York Mellon Corporation. Registered in England no. 2675952. NIMNA Ltd is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. NIMNA Ltd’s investment business is described in Form ADV, Part 1 and 2, which can be obtained from the SEC.gov website or obtained upon request.

Personnel of certain of our BNY Mellon affiliates may act as: (i) registered representatives of BNY Mellon Securities Corporation (in its capacity as a registered broker-dealer) to offer securities, (ii) officers of the Bank of New York Mellon (a New York chartered bank) to offer bank-maintained collective investment funds, and (iii) Associated Persons of BNY Mellon Securities Corporation (in its capacity as a registered investment adviser) to offer separately managed accounts managed by BNY Mellon Investment Management firms, including NIMNA Ltd.

Certain information contained herein is based on outside sources believed to be reliable, but their accuracy is not guaranteed. Unless you are notified to the contrary, the products and services mentioned are not insured by the FDIC (or by any governmental entity) and are not guaranteed by or obligations of The Bank of New York or any of its affiliates. The Bank of New York assumes no responsibility for the accuracy or completeness of the above data and disclaims all expressed or implied warranties in connection therewith. © 2006 The Bank of New York Company, Inc. All rights reserved.

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