UK should be prepared to Brexit with ‘no deal’ retail investors argue

The Government should be prepared to walk away from Brexit negotiations with ‘no deal’ according to retail investors, a new survey shows, as the majority respondents are sticking by their referendum vote.

The Share Centre survey found 55 per cent of investors believe no deal must remain an option for the UK negotiating team, in contrast to 45 per cent of respondents who said it was essential a deal must be reached.

Theresa May repeated the mantra that “no deal is better than a bad deal” throughout the general election campaign.

Critics argue no deal would instantly see, amongst other concerns: UK flights to the US and Europe grounded as the country drops out of the Open Skies agreement; UK shipments halted at European ports limiting trade in perishable items and creating confusion over tariffs; a hard border between Northern Ireland and the Republic; UK pharmaceuticals and chemicals losing accreditation for sale in the EU; and cancer patients denied radiotherapy as the UK drops out of Euratom.

For asset managers, no deal would also mean an instant loss of passporting with no equivalence in place.

Share Centre chief executive Richard Stone says: “It is important not to overlook the fact that a ‘no deal’ outcome may prevail, not due to a failure of the negotiations, but rather because any deal will require support from the national government, and in some cases regional governments, in each and every one of the 27 EU member states.

“That may yet prove a higher hurdle to jump than reaching an agreement with the European Commission.”

Of the approximately 1,000 respondents, 48 per cent had voted Remain and 46 per cent had voted to Leave. Ninety four per cent of respondents sticky by their Brexit vote and those don’t are equally split between changing to Remain or Leave.

The most popular Brexit model is leaving the single market, favoured by 34 per cent of respondents; however, the second most popular was to abandon Brexit altogether, favoured by 29 per cent of respondents.

Leaving the single market was the most popular model for Brexit favoured by 34 per cent of respondents.

Seventeen per cent would like to leave the EU, but remain in the single market, while 16 per cent favour leaving the EU and single market without a trade deal and falling back on WTO rules.

Theresa May

A similar survey conducted in before the general election found 55 per cent of respondents had faith Theresa May could deliver a good Brexit deal. That figure has more than halved to 22 per cent.

Now 60 per cent say May will fail to deliver a good deal and 18 per cent were unsure.

Stone says: “It is clear that personal investors’ confidence in Theresa May to get a positive Brexit deal for the UK has been badly dented by the outcome of the General Election with less than one in four now believing she can achieve a positive outcome, as compared to a majority who believed that to be the case in April.”