Intrinsically difficult period ahead for the UK and Europe – Danske Bank

According to the analysts at Danske Bank, Theresa May’s Brexit speech on last Tuesday served as a reminder of an intrinsically difficult period ahead for the UK and Europe.

Key Quotes

“While the speech did not contain much news, it reminded us that the UK divorce from what can be described as a 33-year marriage of convenience with the EU is likely to be contentious and complicated. While risks are clearly on the UK side, the unity in the EU will also be tested, for example on how to deal with the lack of UK contribution to the EU budget, which accounts for 15% of all contributions.”

“The EU budget is one of the most contentious issues in the EU. While the British pound rebounded after May’s speech, we think it will come under pressure as triggering Article 50 comes closer, seeing the EUR/GBP moving to 0.88 in 3M.”