Brexit won’t be resolved in a single decision – and not all sectors will be losers
Economic growth in the UK has slowed in recent years, and the Brexit process has already undermined real GDP. Whatever happens in early 2019, there will be little immediate clarity; the particulars of this divorce will evolve over months and years. What is clear is that not all sectors will be affected by Brexit in the same way. For example, in the event of a “hard” Brexit, a weaker British pound will likely help larger UK exporters – as will their more diversified exposure.
The UK will also need to make up a large trade gap if it loses access to European Union markets in a hard-Brexit outcome. The EU is the UK’s biggest trading partner, but the EU may be less exposed to losing this relationship than the UK is. The same holds true for the UK’s other major partners, including China, the US and the British Commonwealth. Investors should look for UK companies that are better prepared for Brexit or do significant business beyond the EU – more likely large corporations than smaller and mid-sized businesses.