Research

UK’s Prime Minister Boris Johnson position with a tough no-deal Brexit.  No-deal Brexit, the British will automatically withdraw from the EU, European single market and customs territory after midnight on October 31.

The impact of no-deal Brexit

Financial

Britain will stop paying about 9 billion pounds (about 11 billion US dollars) of annual membership fees to the EU budget

Trade and Tariff Barriers

The trade relationship between the UK and the EU will initially have to be on terms set by the World Trade Organization (WTO).  The basic terms of the WTO mean that there will be tariffs -taxes on import, will apply to most goods UK businesses send to the EU; seaports and airports border between the UK and EU countries will be re-established border checks for goods ; the goods and services exported by the UK may not enter the EU single market.  Some companies worry that it could make their goods less competitive. 

Border Control

Neither the UK or Irish governments have so far said they would be willing to install border posts.  But EU law states physical border checks will still be needed on some goods, such as food and chemicals.  British Prime Minister Johnson said that he hopes to EU agree to abolish the so-called Irish border reserve plan, which aims to ensure the UK and The Irish border does not require the establishment of checkpoints for cross-border merchandise.

Impact on British and European citizens

Bilateral travel will resume additional border inspections.  EU citizens currently residing in the UK and Britons living in EU countries may need to re-apply for permanent resident status.  Medical insurance and also mobile roaming charges will likely to be affected.

Impact on Financial situation

If the United Kingdom hopes to have no-deal to leave EU, it will save £39 billion pounds; however, it may cause the economic recession, and the government have difficulty to solve this issue.  BoE said. “The longer those uncertainties persisted, particularly in an environment of weaker global growth, the more likely it was that demand growth would remain below potential, increasing excess supply.”

Bond Market

British government bonds will become safe haven assets.  If there is no-deal Brexit, the bond price will increase at the beginning, because investors feel fear and seeking out safe haven assets.

Stock market

Three years after the referendum to leave the European Union, the UK stock’s equity market is shrinking faster than any other major venue globally.  But when uncertainties are eliminated, the current stock price has reflected a lot of bad news, so the impact is limited the UK stock market may likely to rise.

Money Markets

Great British Pound may fall below 1.2 after a no deal to leave the European Union. Moreover, BoE is more likely to need to cut rates after a no-deal Brexit

The total impact really needs think carefully before each investment move, and investors should also keep an eye on the market fluctuations