It has been a week full of surprises and sudden turns of events, with the main unchanged parameter continuing to be the consistent and synchronised progress in global economic growth.
For the UK public and economy, the most import development was the apparent breakthrough in the Brexit negotiation on the subject of the divorce bill. While many will be staggered and perhaps appalled by the many 10s of billions of £-Sterling being thrown around, it is important to note that this move does not constitute a caving-in by the UK’s government to the EU27’s demands. Instead, by agreeing that liabilities arising in the future from joint decisions of the past, will be honoured, both sides have accepted that it is sheer impossible to know now what they may be. On the other hand, it is abundantly clear to both sides that an unamicable Brexit would cost both sides 100s and not just 10s of billions of £-Sterling and €-Euros in lost GDP.
That then leaves the Irish issue to be resolved, but where there is a will, there should be a way.
We have dedicated the next article to a more detailed discussion of the Brexit divorce bill approach, with a particular focus on the potentially positive impact on the near-term development of the UK economy should most of the Brexit trade uncertainties dissipate.
The next surprise from a current affairs point of view was North Korea’s firing of another ballistic missile, with the potential to cross continents. Capital market action, however, judged it as another non-event and robbed “little rocket-man” Kim Jong-Un of the pleasure of causing any wider disruption.
