Virtus International: The British Prime Minister, Theresa May has reaffirmed that she expects to begin talks on the terms by which the United Kingdom will leave the European Union by March 2017 as originally planned.
Her reiteration of her timetable for triggering Article 50 of the Lisbon Treaty comes despite the High Court’s ruling last week that the invocation must be made subject to a parliamentary vote and amid her government’s appeal against the decision.
Britain voted to leave the EU after a landmark referendum held on June 23 earlier this year but the controversial outcome has yet to impact upon the British economy as predicted. Earlier this month, the Bank of England appeared to perform a U-turn on the prospect of further interest rate cuts and nearly doubled its forecast for economic growth in 2017.
“We have no doubt whatsoever that the decision to exit the EU will have severe repercussions for the UK economy but much of that will be rooted in an erosion of confidence over its future rather than any material effect on trade,” said Jun Li Park, chief investment officer at Virtus International.
The High Court’s ruling has increased the likelihood of a so-called “soft-Brexit” – a departure from the EU that would see the least damage done to relations with the trading bloc but widely regarded as a betrayal of the will of the electorate.
Virtus International revised its near-term target for sterling in the light of the ruling to $1.30 but warned that over the long-term, it sees the currency forming a holding pattern at around $1.24.

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