With no clear winner emerging from the General Election last Thursday, the Conservative party’s aim for a stronger mandate on Brexit ended up becoming an own goal, and the industry is beginning to react to the news.
“Theresa May’s gamble of securing a strong mandate for the upcoming Brexit negotiations has failed,” trade credit insurer Atradius told Insurance Business in a statement.
Brexit has already had significant ramifications within the industry, with a number of insurers revealing plans to open
post-Brexit EU bases for passporting rights, and last week’s election brought no consolation.
“The election outcome casts doubt on Mrs May’s authority and weakens the Government’s position going into the Brexit negotiations, and means that it could now be more difficult for the Conservative Party to progress Brexit-related legislation through Parliament,” Atradius continued.
“With Brexit negotiations scheduled to begin in the near future, the end to uncertainty that Mrs May had hoped for has not yet been resolved.”
In a report released this month, Atradius said the UK economy has been “remarkably resilient” since the unexpected referendum vote to leave the EU, but one year on, “growth is being increasingly challenged.”
After the initial shock, confidence quickly rebounded and consumers continued to support solid economic growth, it said. But while the depreciation of the pound contributed to higher growth and boosted manufacturing exports in particular, the “flipside of the weak pound is beginning to ease momentum as it weighs on consumer spending.”
In the period prior to the snap election in June, Atradius said uncertainty had eased as the Brexit situation had proven more stable than predicted.
“However, the unexpected election result heralds a further period of uncertainty,” it said. “We expect negative effects to increase in the rest of the year and 2018 as negotiations intensify, especially if it remains uncertain whether a deal can be struck.”
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