Hermes Responds To The Triggering Of Article 50
Saker Nusseibeh, Chief Executive:
One of the main flaws of this entire process, indulged in by both sides, is to talk as if the effects of Brexit would be instantaneous or clear-cut once it is triggered. To restate the obvious, Brexit is a long, complicated and arduous set of negotiations, of which the commercial outcomes and their long-term effects on the economy are unlikely to be clear for many years to come.
The most immediate effect of the Brexit vote (a 20% devaluation of our currency) was not about the outcome of Brexit per se, but merely a logical hike in the risk premium for UK assets while we wait to see whether the effects of whatever can be negotiated are good or bad for the country in the long term. Triggering Article 50 can therefore be likened to embarking in a raft or canoe down a very windy and dangerous set of rapids. All we know at present is that the journey is long, the path of the rapids will likely take unusual twists and turns, and that the ride will be turbulent.
Whether we arrive at the end of the rapids in a wide tranquil lake, under glorious sunshine with strains of Elgar’s Nimrod playing in the background, or whether we sail over a waterfall with the sound of Colonel Bogey is anyone’s guess at present. However, I rather hope and pray it will be the former, and not the latter scenario that transpires.