Category Archives: Brexit

Five years on from the Brexit vote in June 2016, the UK has seen 3 prime ministers, a global health crisis, a divorce from the EU and unprecedented fiscal and monetary intervention which has impacted all asset classes. The pound which fell to a three-decade low post the vote has recovered, but still remains 6% lower than the day of the vote. The UK equity market has been a clear laggard over the period versus other developed markets led by the US, especially the tech heavy NASDAQ index. The pandemic has served to exacerbate market volatility resulting in a difficult landscape to navigate for investors, especially those focused on UK markets.

Brexit discount

The discount applied to the UK by investors has remained throughout the last 5 years and has led to a series of takeovers of UK listed companies including WS Atkins, Scapa, Horizon Discovery, Aggreko, Arrow Global and St Modwen Properties to name a few. The recent attempt by private equity to takeover Morrisons further supports the thesis that the UK market on its current valuation remains highly attractive to investors, especially private equity. The successful vaccination programme in the UK has been pivotal for investors looking at the UK with a very different lens, with a focus on the opportunities that are available in a high quality and well established market which has been unloved for the last 5 years.

Challenges and opportunities

The last 5 years have been challenging for UK fund managers who have had to deal with a bitter divorce with the EU and a pandemic, both events have led to heightened volatility and large changes in asset prices. The sectors that have struggled included Real Estate businesses with meaningful exposure to retail; these have had to weather the challenge from online disrupters and Energy where climate change concerns have come to the forefront. Telecom businesses are facing an environment where they cannot generate enough profits from customers to cover the eye watering costs for building out 5G infrastructure. The sectors that have held up relatively well and are positioned favourably to benefit post Brexit include Healthcare which covers a wide range of industries including pharmaceuticals, animal health and life sciences. The UK retains a leading position in high end industrial engineering serving customers globally. The Materials sector which covers construction and house building are also well set to deliver for investors, with the latter well placed to deliver on the long-standing supply shortfall of new homes in the UK. The high saving ratio which has been built up through the pandemic will unwind, when consumer spending rises once lockdown restrictions are fully lifted and those consumer facing businesses which have embraced digital will be in pole position to benefit.

The challenge for UK fund managers as we move into a post-Brexit world is how to position a portfolio at a market cap level. The small and mid-cap companies are in better position to take advantage of economic growth which is forecast to come through in the second half of 2021 and beyond. And it is no surprise that both the small and mid-cap indices are at a record high, whilst the FTSE 100 has failed to recover to its pre-pandemic high. The large cap index is dominated by more cyclical companies which have been out of favour for an extended period, although could be set for a change if we have a meaningful rise in inflation and a change in monetary policy. In addition, the volatility in Sterling has been a headwind for larger companies, with over 70% of revenues derived from abroad. For those investors who favour an active and quality approach to stock selection, there has never been a better period to build a focused UK portfolio.

Post-Brexit outlook

The unprecedented recent intervention by the Bank of England and the UK government coupled with optimism around the re-opening of the economy in the second half of the year and pent up demand from the consumer materialising augurs well for investors in the UK. The attractive valuations and higher dividend yields which are now coming through after a very tough 2020, which saw a flurry of cuts, deferrals, suspensions and cancellations of pay outs, will help to narrow the Brexit discount. In addition, the pandemic which has resulted in strong headwinds for the UK economy and markets will hopefully fade in time, allowing for normal activity to resume in 2022 and beyond. These factors paint a positive outlook for a market that has been long out of favour with global investors.

For more information on the EdenTree Responsible & Sustainable UK Equity Opportunities Fund, go to http://www.edentreeim.com/uk-equities

The views contained herein are not to be taken as advice or recommendation to buy or sell any investment or interest. The value of an investment and the income from it can fall as well as rise, you may not get back the amount originally invested. Past performance should not be seen as a guide to future performance. EdenTree is authorised and regulated by the Financial Conduct Authority and is a member of the Investment Association. Firm Reference Number 527473.

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Industry Voice: Brexit: the 5 year itch - Investment Week

The body created to regulate, monitor and enforce environmental standards in the UK post-Brexit will be shielded from scrutiny as a result of prohibitions on access to information, campaigners say.

The Office for Environmental Protection (OEP), which is being set up under the environment bill, should offer independent scrutiny of government and public bodies, and investigate public complaints about environmental matters.

But as the bill goes through the House of Lords, campaigners say it contains prohibitions on access to information from the new watchdog, which will shroud its work in secrecy. The prohibitions, according to the Campaign for Freedom of Information, would affect requests made under the Freedom of Information Act and environmental information regulations (EIR).

An amendment to the bill to remove these prohibitions was due to be debated on Wednesday in the Lords.

Maurice Frankel, of the Campaign for Freedom of Information, said: The government has created new prohibitions and the effect will be that if you want to gather information from the OEP on monitoring, or progress towards improving environmental standards, or on environmental hazards, [that] would be subject to prohibition on disclosure that would appear to override the right of access to environmental information under the EIR, and to breach the Aarhus convention, the international treaty to which the UK is a signatory, and the right of access under the Freedom of Information Act.

He said the prohibitions relating to information about enforcement action taken against public bodies would end once the OEP decided to take no further action about a matter.

But this could take many years, said Frankel. In the meantime even information which could cause no harm to any investigation, or whose disclosure would be in the public interest, would be withheld.

These provisions will cause unnecessary secrecy and reduce the opportunity for informed debate on environmental matters.

On Wednesday, Lord Wills will table amendments to the bill seeking to have the prohibitions contained in clause 42 removed.

Frankel said the main impact of the prohibitions would be to stop information being released under environmental information regulations. These already allow information to be withheld where disclosure would adversely affect specified interests. But the decision has to take into account the public interest in releasing the information and a presumption in favour of disclosure.

These safeguards will not apply to the Office of Environmental Protection under the prohibitions.

The government, in its explanatory notes for the bill, denies it contains such prohibitions.

It states the bill does not override the EIR which will still apply to the OEP and other public bodies and will also not override or disapply other existing legislative provision on public access to information such as the Freedom of Information Act 2000 or Data Protection Act 2018.

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Alarm over plans to shield post-Brexit environment watchdog from scrutiny - The Guardian

One of the significant differences between Leave and Remain, in my view, is that the latter can be magnanimous in acknowledging that Nissans decisions in Sunderland are not entirely what we might have expected, but are good news.

However, the suggestion that the army being brought in to ensure food supplies must rank as the most significant manifestation of the so-called "Project Fear" that we shall see.

We did tell you that there would be an exodus of labour, and this will surely be a process that will bring Brexit right into our daily lives. It is sobering to think that the Brexit-related shortages of labour in the hospitality and delivery industries are caused by hundreds of thousands of individual decisions not to remain in the UK, not the decisions of big business.

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Given talk of labour shortages in the wake of Brexit it's clearly time to upgrade my driving licence - The Independent

Labour has announced a new post-Brexit economic vision for the UK involving ambitious plans to make, sell and buy more in Britain as it seeks to build a strongly patriotic policy platform with which to take on the Tories.

Emboldened by its morale-boosting victory in Thursdays Batley and Spen byelection, when the party halted Tory advances into its strongholds in traditional manufacturing areas, the move marks the opening shot in a new campaign to be led by Keir Starmer focused on jobs and the battle against crime in all local communities.

In her first major intervention since being appointed shadow chancellor, Rachel Reeves also said that Labour would ensure far more public contracts were awarded to British businesses, as opposed to handing them to overseas firms. This would be tied in with an emphasis on securing more high-skilled UK jobs for the future in the green, financial technology, digital media and film sectors, and other industries in this country.

Since Starmer, who was strongly against Brexit, became leader, his party has lacked a clear economic argument. Meanwhile, the Tories have pursued the goal of what they call global Britain, identifying new trade deals to replace UK access to the EU single market.

Reevess idea aims to develop a more realistic plan than that advanced by the Conservatives, but with an equally patriotic message at its heart. Under the plan one of the boldest since Starmer became leader every public body in the country would be told to award more contracts to British firms, underpinned by a new law that would require public organisations to give details of how much they are buying from UK firms, large and small.

Labour would also institute an immediate review of all major public infrastructure projects such as rail and road works to identify how more materials could be provided from the UK and how UK workers could be up-skilled to work on them. In the award of contracts, public sector organisations would also have to examine the social as well as the economic benefits of any projects, including what they would do for local areas and job creation.

Reeves highlighted a series of recent government decisions in which major contracts have gone to overseas companies without consideration of the positive effects on local communities of keeping the work in this country.

Examples included the award of a contract to make new blue UK passports to a French company, which led to the loss of 171 jobs in Gateshead. Labour will also highlight how only one UK-based firm was shortlisted for 2.5bn of contracts for track and tunnel systems of the new HS2 high speed rail network.

Reeves said the post-Brexit, post-pandemic world offered new opportunities for a radical rethink of attitudes to job creation, raising standards and developing skills.

As we recover from the pandemic, we have a chance to seize new opportunities and shape a new future for Britain, she declared.

Labour will get our economy firing on all cylinders by giving people new skills for the jobs of the future here in the UK, bringing security and resilience back to our economy and public services, and helping our high streets thrive again.

Post-pandemic and post Brexit, we should be rethinking how we support our businesses, strengthen our supply chains and give people the skills they need to succeed. The decade ahead is crucial.

On a victory visit to Batley and Spen after first-time candidate Kim Leadbeater held the seat for Labour in a byelection, Keir Starmer stressed the value of communities.

In the coming weeks he will tour the country stressing the need to protect local people from crime and boost their job prospects with the emphasis on making, selling and buying more in Britain. He announced: My message is, when the Labour party sticks to its core values, is rooted in its communities and pulls together, we can win just as weve won here. This is the start, Labour is back.

TUC general secretary Frances OGrady welcomed the move, saying: We need to build a fairer and more resilient economy as we emerge from this pandemic. That means strengthening UK manufacturing and investing in homes, transport and other vital infrastructure.

The TUC has been campaigning for government to use public money to create decent jobs in every part of Britain. Its great to see that Labour is taking forward this agenda too.

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Keir Starmer takes on Tories with buy British economic plan - The Guardian

A recent report by a joint UK-EU committee of citizens rights indicates there were 1,500 refusals of cartes de sjour by France as of May 28, 2021 however the small print casts doubt on the figures accuracy.

The Connexion was surprised to read the figure (see here, page 33) which is shown to be the highest among EU states that require an obligatory Withdrawal Agreement (WA) residency card application and that supplied data on this to the committee (several did not).

assets.publishing.service.gov.uk / Specialised committee on citizen's rights, fourth report

The Connexionhas not been told of refusals in France by our readers.

British in Europe co-chair Jane Golding toldThe Connexion: As far as I am aware we dont have reports of refusals in France. She said they are raising the numbers with the European Commission.

Kathryn Dobson of France Rights, one of the British in Europe (BiE) groups focused on France, said the reason for the apparently high figure is likely to be in a footnote to the data supplied by France.

The footnote says: These figures do not systematically reflect the number of applications refused and include in particular duplicates (cases where the same application was submitted more than once).

Ms Dobson said: We think that it is false if you look at the footnote as it includes duplicates.

We've asked for clarification. The British Embassy in Paris confirmed to us that they only know of a few refusals.

Asked her interpretation of how duplicates could arise, she said: There could be two reasons for duplicates: Firstly, the applicant was worried that an early application has been lost [and so resent it] and secondly, some people saved their application when they were part-way through completing it and then couldn't access it, so restarted it.

However we have no transparency so have no idea what duplications they mean but we do know there have been some and I would not be surprised if there were more than 1,500 of them.

She added: The figures are worthless really, we need far more detail across the board.

We would have heard if people were being refused so I'm reasonably confident there is a problem with the figures.

An embassy spokeswoman said: Questions about these figures would be best directed to the French authorities who provided them, but we do know they are looking to grant residency wherever possible.

We have asked the Interior Ministry if it is possible to explain further how they were compiled and if they can comment further on refusals in France.

The joint committee report states that refusals of Britons' residency cards by EU states may be due to peoples personal circumstances not meeting the criteria for a card, or related to criminal records.

Other statistics shown include applications that were withdrawn by the applicant or void, the latter meaning that the applicant is someone who is not eligible for the WA residency card status, for example because they are not British.

Incomplete applications are also shown, which means key information or supporting documents were not supplied.

While high compared to the other EU states show in the report, the French figure is nonetheless far fewer than refusals for the equivalent settled status for EU citizens in the UK. Out of 5.27 million applications, 94,000 were refused, according to the report.

Brexit France: Britons' residency card website remains open

British Ambassador: If you have not applied, apply now!

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Has France rejected 1500 Britons' Brexit residency card applications? - The Connexion

EU citizens are struggling to apply for post-Brexit settled status as the Home Office reaches breaking point coping with a last-minute surge in applications.

With three days before the deadline of the EU settlement scheme this Wednesday, campaigners say late applicants are being stuck in online queues as others find it impossible to access advice on the government helpline.

Latest government statistics show a lengthening backlog of applications. Out of 5,605,800 applications only 5,271,300 have so far been processed. Further estimates suggest tens of thousands possibly up to 150,000 of others have yet to even apply.

The figures have intensified calls for the UK to follow Frances leadand announce a deadline extension, a move that has ensured British nationals in the country do not risk losing their rights.

On Thursday France added another three months to its 30 June deadline for new post-Brexit residency permits, allowing Britons more time to secure local healthcare, employment and other rights.

However, the UKs immigration minister, Kevin Foster, has ruled out extending the deadline despite a late surge in applications, thought to be higher than 10,000 a day.

Campaign group the3million, whose name underlines the vast underestimation in the number of EU citizens previously believed to be living in the UK, said they had received numerous reports of people struggling to receive a certificate of application, the paperwork that guarantees their rights are protected while their application is pending.

Monique Hawkins of the3million said an indication of how many EU citizens were scrabbling to obtain a certificate of application was evidenced by the number of people reporting being stuck in a queue after accessing the governments settled status website.

Hawkins also said there were grave concerns over the helplines ability to cope. To date, the helpline has received 1.5 million calls in addition to more than 500,000 requests for help through an online contact form.

If people have any kind of problem or question, they cant get through. Instead, they get a message saying, Sorry, the helpline is full, try again later.

There are a lot of complex applications trying to get through which are being stymied by people not being able to get help. The organisations set up to help people are also overrun, the system is at breaking point, said Hawkins.

Last week the Home Office warned EU citizens living in the UK that they will be issued with a formal 28-day notice if they fail to apply for post-Brexit settled status by the deadline.

The notices will warn them to enter an application or risk losing their rights to healthcare and employment.

Campaigners fear that many EU citizens still remain unaware of the deadline and the threat to their rights.

There will be a lot of complex and vulnerable people who will also not have been reached because they will not be seeing the last-minute social media material, said Hawkins.

The Home Office said last week it was redoubling attempts to reach those unaware of the impending rule change, including vulnerable groups such as elderly people and children in care.

Another area of concern is potential delays to the issuing of certificates of application. Despite writing to the Home Office in April, the3million say they still do not know of the legal position if a person has submitted an application but has not received a certificate.

Meanwhile, the backlog of applications has grown to more than 330,000. Although the Home Office says the process usually takes five days, new data reveals that more than two-thirds of EU settlement applicants have been waiting more than a month for a decision, with thousands waiting for over a year.

A Home Office spokesperson said: As we near the 30 June deadline for the EU Settlement Scheme, our Settlement Resolution Centre is seeing a surge in calls but continues to help thousands of customers every day.

Anyone who has already submitted an application has their rights protected, even if the application is not concluded before the deadline. We want to prioritise those who havent yet submitted an application and who need additional support to do so. If you have already made an application, please do not call the Settlement Resolution Centre to check.

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Hundreds of thousands of EU citizens scrabbling to attain post-Brexit status before deadline - The Guardian

MERSHAM, England Since work began on a post-Brexit border checkpoint, villagers nearby have complained of construction noise, a cloud of dust, damage to their homes, unsavory refuse and giant trucks blasting their horns at night and getting stranded on tiny rural roads.

But the real problem starts like clockwork each evening when hundreds of floodlights from the giant vehicle park illuminate the skyline so much that, on one recent night, a dramatic bolt of summer lightning looked like a faint flicker.

Five years after Britons voted to leave the European Union, the aftershocks are still being registered. But few parts of the country have felt its impact more than this corner of England close to its Channel ports and the white cliffs of Dover, where a majority voted for Brexit.

When Britain was inside the E.U., the trucks that flowed ceaselessly to and from France did so with few checks. But Brexit has brought a blizzard of red tape, requiring the government to build the checkpoint nicknamed the Farage garage, a reference to the pro-Brexit campaigner Nigel Farage.

For people living nearby its an absolute catastrophe with the night sky completely lit up. Honestly, its like Heathrow Airport, said Geoffrey Fletcher, chairman of the parish council at Mersham (pronounced Merzam).

Consultation on the 24-hour truck park had been minimal and suggestions on how to limit problems ignored, he said. Yet, so polarized is the debate over an issue that divided the country, that Mr. Fletcher thinks few minds have changed on Brexit.

I have not met anybody who has said they would vote differently, said Mr. Fletcher, a Brexit voter, over coffee in the garden of his former farmhouse, part of which dates from the 15th century.

At present the Sevington Inland Border Facility is mainly used for Covid-19 testing of truck drivers headed to France, according to Paul Bartlett, a Conservative Party representative on the Kent County Council. That should change in the fall, however, when Britain is scheduled to start introducing checks on incoming goods including food and animal products.

Currently, the site, which covers around 66-acres, is around half as busy as expected, but already there are problems.

Of about 1,000 lorries a day coming into the Inland Border Facility there are two or three lorries a week trying to access it through an unauthorized route: every time that happens it causes angst and aggravation, said Mr. Bartlett, who added that some truck drivers who had relieved themselves inside their cabs had discarded bottles filled with urine.

It happens, I dont understand it, he said, why chuck it out of the window when you know you can walk it to a bin?

If Britain were experiencing any wide-scale Bregret regret about supporting Brexit this should be the place to find it given the litany of complaints.

Yet opposition to the border checkpoint has been muted because the land had been earmarked for development, and a warehouse and distribution center was one possibility.

John Lang is one of the most directly affected, and while his physical view has changed dramatically, his political ones have not. Where once Mr. Lang enjoyed overlooking a barley field, he now faces the site in two directions: the main area to the front and an overflow area to the rear.

The main construction phase was like a war zone, he said, not just because of the noise but because the process of leveling the ground generated a huge cloud of dust. It was like the Sahara, he said.

While that has mercifully ended, Mr. Lang said he was still being bothered by trucks sounding their horns late at night or getting lost and ending up outside his home. On one occasion Mr. Lang said he had an altercation with an irate Italian truck driver. I threw a sandbag at him, he said.

But those annoyances pale beside the enduring problem of the 40-foot-tall floodlights that throw a blaze of light over the area. I reckon you could see it from the space station, said Mr. Lang, who cannot use one of his bedrooms because, even in the pitch of night, its daylight.

While Mr. Lang, the managing director of a building company, feels poorly treated by government officials they couldnt lie straight in bed, he said he has not wavered in his support for Brexit. He is happy with the governments new draft trade agreement with Australia and thinks that further benefits will be seen a decade hence.

Down the road, Nick Hughes said heavy construction vehicles had caused structural cracks in his ceiling and a burst water main outside. The dust, he said, was unbelievable, and an acoustic wall designed to muffle sound from the truck park has caused problems because the roar from a nearby high-speed train line tends to bounce off it, amplifying the sound.

And of course, there are the floodlights. We could walk around our house at night with no lights on, said Mr. Hughes, a civil servant, who fears that the development has reduced the value of his property.

When you talk to somebody and you say where you live, they used to say, Oh by the quaint church. Now they say, By the lorry park, he added.

Yet Mr. Hughes, while circumspect on how he voted on Brexit, said his views had not changed. I have friends who voted both ways and we just dont talk about it, he added. Its probably the most divisive thing I have ever known among groups of friends.

The Department for Transport said it had commissioned a survey over the lighting and would work to resolve complaints.

We are aware of residents concerns and have acted to minimize disturbance by turning off the lights in one of the most public sections of the site as well as commissioning a detailed lighting survey to better understand the issue and develop a plan to address it, it said in a statement.

Supporters of the project point to its economic impact and, so far, it has generated 130 jobs, according to an official announcement.

But by Sevingtons church, which dates from the 13th century and is now an island of rural calm next to a sea of concrete, Liz Wright, a local Green Party councilor, decried the pollution connected to the site. It is very sad when you think there were hedges, wildflowers, wildlife and trees, and now you just see this barren expanse of lorries and buildings, she said.

However, Ms. Wright voted for Brexit because she opposes the European Unions farm policy and thought migration from the bloc was forcing down wages, and she hasnt changed her mind either.

Those who wanted to remain in the European Union, like Linda Arthur, a leader in the Village Alliance, a local group campaigning to persuade the government to devote some of the unused land to a wildlife site, can only shake their heads.

It was a beautiful country village peaceful and quiet until now, she said, adding that some villagers are getting a little tired of guiding lost foreign truck drivers out of tiny streets.

But she accepts that the region can expect little sympathy in light of its vote to leave the E.U. and acknowledges that, despite the transformation of this idyllic corner of the countryside into something of an eyesore, sentiment about Brexit has barely moved a notch.

It hasnt, I suppose its very interesting isnt it? she said, adding with a wry smile: Thats all I can say as a non-Brexiteer.

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They Voted for Brexit, but Not the Giant Truck Park That Came With It - The New York Times

Less than 1 per cent of animal food products, plants and live animals imported from Britain have been rejected by State inspectors in post-Brexit checks since January 1st, new figures show.

The Department of Agriculture said it had processed 24,481 consignments, mostly at Dublin Port, since the beginning of the year under the new border controls on imports from Britain.

Inspectors carried out 27,918 checks on those consignments in that 24-week period to June 20th. Just 175 consignments, or 0.7 per cent of those processed, were rejected, mostly because the imports were not accompanied by the required health certificate.

Products of food and plant origin along with live animals arriving into the State from Britain have been subject to sanitary and phytosanitary checks applying to non-EU goods. The checks have been carried out the EU-designated border control posts (BCPs) at Dublin Port, Dublin Airport, Rosslare Europort and Shannon Airport.

Some 97 per cent of the consignments were processed by inspectors at Dublin Port, the States largest port.

In most cases where consignments were rejected, the product was destroyed as it was usually just part of a load being carried by a heavy goods vehicle, the department said.

Of the rejected consignments, 90 were products of plant origin, 63 were products of animal origin and 16 were rejected on the basis that they did not comply with EU rules on pesticides. No consignments of live animal imports were rejected.

Hazel Sheridan, head of the departments import control division, said the main focus of the work by inspectors was on documentary checks to ensure that importers had correct certificates.

Inspectors carry out documentary checks on all food and other products of animal and plant origin, while all live animal imports and between 60 and 70 per cent of plant products are subject to identity checks by inspectors.

The physical check rates vary and that has not been so much of our focus in the early part of the year but it will be in the latter part of the year, she said.

Ms Sheridan said the very low number of rejected consignments was a testament to how well businesses have adapted to the situation.

It was pretty bumpy in the early days, but we are definitely on a much smoother road now. We have been impressed by how quickly businesses have adapted, she said.

The change to border controls on inbound products from Britain was the most significant change since the EU single market was created more than a quarter of a century ago, she said.

It was always going to be a very big shock to the trading system. It has been a real testament to everybody how quickly businesses have adapted and just how agile and adaptive businesses, hauliers and operators in the supply chain are in Ireland and the UK, she said.

Ms Sheridan warned traders to be ready for the next shock from October 1st when Britain would start applying border controls to exports from Ireland and the rest of the EU.

She expected businesses would stockpile and front-load products ahead of the October deadline to allow them to adjust, but urged traders to have the required paperwork ready to avoid delays.

If you are exporting products to the UK, you really need to be very clear what the GB import requirements are and then making sure that youre able to comply with them, she said. One of the key messages for businesses is to do things as early as you possibly can.

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Post-Brexit checks rejecting less than 1% of British imports - The Irish Times

The reality is that markets have "kind of dismissed it," said Andrew Jackson, head of fixed income at the international business of Federated Hermes Inc. in London, speaking on a virtual panel event on June 17. While Brexit is relevant, it may be "bad, may be good, but only marginally bad or good," he said. Corporations got ahead of the official exit, managed risks and communicated them well, Mr. Jackson added. Federated Hermes has $625 billion in assets under management.

But concerns do remain, including the impact of "rules of origin" the need to demonstrate that goods originated in the U.K. or EU before they can be distributed on supply chains and "the uncertainty over the treatment of parts of financial services. The risk is that a combination of the rules, frictions and ongoing uncertainty undermine business investment," Mr. Roe said.

Insight's Ms. LaRusse said there is some evidence of delays in terms of bringing goods into the U.K., which is affecting costs. She also cited the rules of origin protocol as a risk. "There is some evidence to suggest there are frictions in the system, which are leading to less trade, and potentially that hurts the U.K. economy," she said.

And Hermes' Mr. Jackson added that supply chains will continue to be disrupted. "But I think in some ways, the last year has been a good time to have Brexit occur there's been a global pandemic and some of those supply-chain effects have not been noticed," and markets have gathered "all the bad news together in one big chunk," he added.

And any further bad news that causes another drop in sterling would actually boost domestic stock prices because about 70% of FTSE 100-listed company revenues are earned overseas, RLAM's Mr. Greetham said.

Christian Kopf, Frankfurt-based head of fixed income and FX at Union Investment Institutional GmbH, thinks Brexit "is largely priced into financial markets by now. In fact, we believe that after lagging global equities for many years, U.K. equities now offer good potential, as valuations look attractive."

That is especially true for midcap stocks those listed on the FTSE 250 index "which tend to perform well in economic recoveries. But even large caps now look cheap by historical standards," he said in an email. Union has 386 billion ($467.4 billion) in assets under management.

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Effects of Brexit difficult to quantify as COVID-19 muddying the waters - Pensions & Investments

British data protection standards are adequate, the EU has ruled in a long-awaited decision that lets digital information continue to flow between the UK and the bloc. But Brussels warned Boris Johnsons government the decision could be revoked immediately if it sees weakening UK standards.

Failure to get a positive decision would have risked plunging British businesses into disarray, leaving industries from banking to logistics scrambling to set up more costly, bureaucratic alternatives to share data.

The UK will retain adequate status for four years, but the commission warned that could be withdrawn at any time if UK law was no longer deemed to offer EU citizens protection over how their data was used.

The European Commission vice-president Vra Jourov said: The UK has left the EU but today its legal regime of protecting personal data is as it was. Because of this, we are adopting these adequacy decisions today.

She added that the commission had listened very carefully to concerns expressed by the European parliament, EU members and the European Data Protection Board, in particular on the possibility of future divergence from our standards in the UKs privacy framework.

Under pressure from the European parliament, the commission put a four-year sunset clause on the adequacy decision, a safeguard applied to no other country, which reflects mistrust of the British governments ability to protect EU citizens data.

Didier Reynders, the European commissioner in charge of data protection, said the adequacy decision could be withdrawn immediately if the commission had serious concerns.

Of course we have a procedure and we will give the opportunity to the UK to react and to explain what are the possible solutions, if we have a problem, he said. But if there is a real urgency this can be done immediately. So its possible to stop the process or to suspend or amend if we have real concerns. Its a unilateral decision of the commission to do that.

John Foster, the director of policy at the Confederation of British Industry, said the breakthrough in the EU-UK adequacy decision would be welcomed by businesses across the country. The free flow of data is the bedrock of modern economy and essential for firms across all sectors from automotive to logistics playing an important role in everyday trade of goods and services.

The digital secretary of state, Oliver Dowden, said: After more than a year of constructive talks, it is right the European Union has formally recognised the UKs high data protection standards.

During the Brexit transition period, the government largely copied key EU legislation into the UK statute book, notably the landmark General Data Protection Regulation (GDPR) and the Law Enforcement Directive, which governs data sharing in police and law enforcement.

Brexiters on the Tory backbenches are pressing Boris Johnson to ditch the prescriptive and inflexible GDPR. A taskforce set up by Downing Street to seize new opportunities from Brexit said GDPR should be replaced with UK laws on data protection. The EUs GDPR overwhelms people with consent requests and complexity they cannot understand while unnecessarily restricting the use of data for worthwhile purposes, states the taskforce report drawn up by Iain Duncan Smith, Theresa Villiers and George Freeman.

The group said consumers needed stronger rights, while data should be free[d] up to allow the UK to capitalise on artificial intelligence and data-driven healthcare. The prime minister promised to give their report the detailed consideration it deserves.

During the Brexit negotiations, analysts at the New Economics Foundation warned that the absence of a deal on data could cost UK firms up to 1.6bn, either in compliance costs or higher prices for goods and services. Any company that shares data between the UK and EU via payroll or health records could be affected if Brussels decides to withdraw adequacy.

Only 12 countries, including Canada, Switzerland and New Zealand, have positive adequacy decisions from the EU. The US was deemed partially adequate, but these decisions have been thrown out twice by the European court of justice. The two legal victories for the privacy campaigner Max Schrems concluded the EU-US agreements on data-sharing failed to protect EU citizens from snooping by US intelligence agencies.

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EU rules UK data protection is adequate in boost for business - The Guardian