Cambridge Weekly Update – 28th October 2019

Slowly turning

Another week, another Brexit delay. EU leaders have decided to wait until after the election vote next
week before saying how long may be acceptable for another delay. Despite some tough words from
France, it seems unlikely they will be so unreasonable as to force the UK to emergency measures to
avoid being ‘thrown out’. Meanwhile Jeremy Corbyn and the Labour PLP are caught in “the Cummings
Trap”, the party that says “no”.

End of monetary policy era forces fiscal stimulus rethink

The IMF and World Bank hold their joint meeting in Washington each autumn, where the bigwigs of the
global financial system gather together for a series of closed-door meetings, briefings and news
conferences.
This year’s meeting happened last week, with the key-note speech – the prestigious Per Jacobsson lecture
– being presented by former Bank of England governor Mervyn King. His pronouncements were as
damning as they were interesting. Economists and policymakers are “sleepwalking” towards the next
financial crisis, warns King.

Why hold UK equities?

There is no escaping the B word. Anyone could be forgiven for a certain amount of Brexit fatigue, given
how all-encompassing the issue has become over the past three and a half years. Parliament’s vote this
week to back Boris Johnson’s Brexit deal in principle raised hopes that an end to the drama and
uncertainty may be in sight. But the later vote against Johnson’s timetable for the bill gave those hopes a
battering. Huge uncertainty still looms for the UK. And few things hamper economic and market
sentiment quite like uncertainty.

Read the full commentary here