UBS Investor Forum

Challenging the UBS House View

Every month, we invite global investment leaders from the fund management industry to challenge our UBS House View. We address global financial questions to make sure we never sin through over-confidence.

Can a Brexit deal be reached?

Laurent Clavel – Head of Macroeconomic Research, AXA Investment Managers

Marino Valensise – Head of Multi Asset Group, Barings

Outside View

  • Participants agreed that a Brexit deal will be reached.
  • However, they see the major risk being that the deal needs to be voted and approved by the UK parliament .
  • A no deal would cause major disruptions to the UK economy.
  • Hence they expect a Brexit deal to be reached in 2019.

UBS House View

  • Concern over Brexit is rising, with the UK government at the limits of what it can concede and Prime Minister Theresa May stating that not reaching a deal "wouldn't be the end of the world." Delays increase the risk of no deal being reached.
  • Our base case remains that an agreement can be reached and the UK moves on to the transition phase, but this is likely to come later than expected, and the risks of no deal are very high.
  • We are neutral on UK equities. The UK earnings growth outlook for the next 12 months is below that of global equities. We expect sterling to appreciate over the medium to long term.

Will Brexit hurt the UK economy?

Poll Form

Read the full report in our Brexit Briefcase

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