What will a Hard Brexit do to the british economy, and how will it affect stock prices? why is it so bad? - Seedly
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Anonymous

Asked on 05 Mar 2019

What will a Hard Brexit do to the british economy, and how will it affect stock prices? why is it so bad?

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Billy Ko
Billy Ko
Level 7. Grand Master
Answered on 16 Jan 2020

Many things aren't set in stone yet, like how things are going to affect businesses, whether they'll be taxed etc. So markets may be rather uncertain and will react accordingly with each new policy being passed after Brexit. Currency is one that will undoubtedly be affected by Brexit too, so there'll be a significant amount of movement there too

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Wilson Nid A Break
Wilson Nid A Break
Level 9. God of Wisdom
Answered on 16 Jan 2020

Time to buy some UK stocks if hard brexit comes :)

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Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 9. God of Wisdom
Answered on 16 Jan 2020

It depends alot on whether Britain can negotiate any trade deals with other EU members, especially Free trade agreements. If they cannot do it, then it means that there will be trade restrictions, trade taxes and more, which will impact businesses in Britain. Investors might want to move funds out of Britain to somewhere with better trade regulations.

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Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Answered on 15 Jan 2020

A hard brexit means trading between the EU block and britain will be affected in the short run because things such aa tariffs amd cross border taxes will be unknown and subject to future rules.

Businesses do not like such uncertainty and they will defer their purchases to a later date when the dust settles

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Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 15 Jan 2020

Hey there! I just answered a similar question, not about Brexit but about a possible economic outcome that might affect the market.

You can check it out here! The same rational applies:

https://seedly.sg/questions/how-will-trump-s-impeachment-result-affect-the-stock-market

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Alvin Teo
Alvin Teo
Level 6. Master
Answered on 27 Oct 2019

The keyword is uncertainty, however, the question to ask yourself is are you going to be affected?

If the stock you buy is purely operating in Singapore, it may be affected for a while but its fundamentals will pull it through.

The financial markets have endured many crises and Brexit will be just another. It should pull through.

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Running a business involves a temporal aspect of putting in funds and time/effort now for return in future.

Some really high return projects require planning out far in the future (eg. lifetime of a nuclear power plant may be more than 20 years).

Brexit creates a lot of uncertainty about what will happen next - the laws of today may not apply after Brexit.

That uncertainty is very very very bad for business and so dampening economic activity.

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