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What’s happened since the EU Referendum

24 July 2016

It’s been a month since the EU Referendum where a majority of the electorate voted for the UK to leave the EU.

Here is a summary of the major events that have occurred since then.

Financial

The Governor of the Bank of England, Mark Carney,  was quick to make a statement following the EU referendum result.

Statement from the Governor of the Bank of England following the EU referendum result

You can watch his statement at

http://www.bankofengland.co.uk/publications/Pages/news/2016/056.aspx

FX Market

One of the first effects was seen in the financial markets with the Pound falling in value against the US dollar.

Looking at the spot inter-bank market rate, the biggest drop was on the 24 June showing the rate opening at 1.00GBP = 1.48USD and closing at 1.00GBP = 1.36USD.

The rate continued to fall, but more slowly for the next 2 weeks reaching 1.00GBP = 1.29USD on the 8 July.

On the 22 July the rate opened at 1GBP = 1.32 and closed at 1 GBP = 1.31 USD and appears to have settled down at least for the time being.

ref: https://www.poundsterlinglive.com/best-exchange-rates/british-pound-to-us-dollar-exchange-rate-on-2016-07-24

Precious Metals

As the pound was falling, the price of precious metals started to rise. On the 24 June, the spot price for Gold was £955.84 per troy ounce rising to a high of £1,056.79 per troy ounce on the 6 July and currently, on the 22 July, the price was £1,008.66

Stock Market

The Brexit vote caused a wave of panic selling by those gamblers, sorry traders, in the Stock Market with the Footsie 100 Index falling steeply after trading began but recovering to finish 199 (3.1%) points down at 6138.69 on the 24 June. After the weekend, the selling continued and the Footsie stood at 5982.2 at the close. After that, stocks started to rise and the Footsie was at 6577.83 by the 1 July and on the 22 July was at 6730.48 (which is around where it was in Aug 2015!).

ftse100

Political

The result also caused various political upheavals.

Conservative Party

Prior to the referendum Cameron had claimed (18th June) that he was the best person to negotiate any post-referendum deal and would remain “whatever” the result.

from the Independent newspaper:

http://www.independent.co.uk/news/uk/politics/eu-referendum-david-cameron-resign-step-down-boris-johnson-brexit-stay-as-prime-minister-result-poll-a7088811.html

from the Telegraph newspaper:

http://www.telegraph.co.uk/news/2016/06/18/david-cameron-insists-he-will-stay-on-as-prime-minister-regardle/

However, Cameron was quick off the mark and decided to resign as Prime Minister as the result hadn’t gone his way.

Cameron’s Resignation Statement

also at

https://www.gov.uk/government/speeches/eu-referendum-outcome-pm-statement-24-june-2016

In his resignation speech, he said he would stay until a new Prime Minister was in place, which was expected to happen by the 1st October.

Following Cameron’s statement 5 MPs presented themselves as candidates for the leadership: Stephen Crabb, Liam Fox, Michael Gove, Andrea Leadsom and Theresa May. Nominations closed at noon on 30th June 2016.

(Boris Johnson, an early favourite, decided not to run in the competition for leader after Michael Gove announced that he would run).

The process for election as leader of the party (and thus the next Prime Minister) is first put to a serious of ballots (voted by MPs) to determine 2 candidates who are sent forward to a ballot by all Conservative party members.

In the 1st ballot (5th July) May obtained more than half the votes of MPs with 165 votes, followed by Leadsom with 66, Gove with 48, Crabb with 34 and Fox with 16 votes. Fox was eliminated and Crabb withdrew leaving May, Leadsom and Gove to contest the next ballot.

In the 2nd ballot (7th July) May obtained 199 votes followed by Leadsom with 84 and Gove with 46.
Gove was eliminated, leaving May and Leadsom to proceed to the final ballot by all party members.

A few days later, 11 July, Andrea Leadsom withdrew from the contest and Theresa May was duly elected, unopposed, as the new leader of the Conservative Party without the need for a ballot by members.

On the 13 July, David Cameron relinquished his position as Prime Minister and Theresa May accepted a request from the Queen to become Prime Minister and immediately started creating her new government team.

Most notable positions in her cabinet are Philip Hammond as Chancellor, Boris Johnson as Foreign Secretary, Amber Rudd as Home Secretary, David Davis as Secretary of State for Exiting the EU (Brexit Minister) and Liam Fox as head of the Department for International Trade. Andrea Leadsom is appointed Secretary of State for the Department of Environment, Food and Rural affairs (DEFRA). Michael Gove and Stephen Crabb have not been appointed to positions in the new cabinet.

Labour Party

Jeremy Corbyn was elected as leader of the Labour Party after Ed Milliband resigned as leader following the 2015 General Election. His election as leader was never fully respected by his fellow MPs even though he had over whelming support from ordinary members of the Labour Party. (New members who had paid a joining fee of £3.00 were able to vote in the election).

After criticism of his lacklustre support for the Remain campaign,  the sacking of his Shadow Foreign Secretary Hilary Benn (25 June) who had expressed no-confidence in Corbyn’s leadership,  and resignations from over 20 members of the Shadow Cabinet,  a no confidence vote in his leadership  (28 June)  supported by 172 Labour MPs  vs 40 MPS supporting Corbyn resulted in a formal challenge to his leadership.

Angela Eagle announced her intention to contest the leadership on 11 July. After some debate by the National Executive Committee (NEC) of the Labour Party (12 July), it was determined that Corbyn could be included in the contest without needing nominations from other Labour MPs.  The NEC also decided to vary the rules that so that new members who had joined in the last 6 months  would not be allowed to vote. (130000 new members have joined the Labour Party paying their joining fee of £3.00 since the EU referendum). Registered supporters were, however, given the option to pay a further fee of £25  which would allow them a vote.

Owen Smith announced his intention to contest the leadership on 13 July.

Prior to nominations closing on 20 July, Angela Eagle withdrew leaving a straight contest between Corbyn and Owen Smith.

The ballot is not due to close until 21 September so the leadership contest is going to drag on for some time yet.

UKIP

Nigel Farage announced on the 4 July his intention to resign as the UKIP leader as he had achieved his aim which was to get the UK out of the EU .

http://www.bbc.co.uk/news/uk-politics-36702384

SNP

The Scottish First Minister, Nicola Sturgeon was quick to make a statement (24 June) claiming it was democratically unacceptable for Scotland to be taken out of the EU against its will. She also stated that a  second referendum for independence for Scotland from the UK was highly likely. This is a theme that is likely to remain for some time.

Nicola Sturgeon travelled to Brussels on the 29 June in an attempt to talk with EU leaders about Scotland  retaining their membership of the EU. She was rebuffed by Donald Tusk, President of the European Council, who felt it would not be appropriate, although she did meet with Jean-Claude Juncker, President of the European Commission, and Martin Shulz, President of the European Parliament.

It is likely that the only way for Scotland to become members of the EU would be to follow the application process in the same way as for any other State. This could only happen if Scotland were independent from the UK

 

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