Anti-Brexit signs are pictured at the gates of Downing Street in London, Britain December 24, 2020. — Reuters pic
So yesterday's deal, seven days before the deadline, is an undoubted relief. Analysts are urging clients to snap up undervalued UK stocks, the worst performing of any major market since 2016 and many say they been buying sterling, which is near 2½ year highs above US$1.36.. While the news could lend some traction to British markets it would not protect the economy from long-term scarring, inflicted by a combination of Brexit and Covid-19, she said.
The British currency remains around 20 per cent below its long-term fair value. Few expect it to recover fully in the near term. British equities may perform well against a backdrop where other markets look expensive - Simmons says UK shares trade at a 30% discount relative to global markets against a typical 10% discount.“As for the Brexit discount, I do think some of it goes away but will it completely disappear? The drag on cumulative UK GDP as a result of Brexit is still sizeable,” she said.