Brexit

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Reverberations will be heard around the world. Morgan Stanley’s Chief European Economist, Elga Bartsch, says the leave will likely trigger a downturn, if not outright recession in Europe, and resurrect concerns about a euro break-up. “Depending on how Europe responds to a vote to leave, the financial stress expected in the UK could spill over into the euro area. In particular, if concerns about euro break-up would start to creep back into markets, financial conditions could tighten materially,” she says. The European team expects a significant hit to eurozone growth and heightened European political risks, while its global team expects any number of negative spillovers, particularly from further U.S. dollar strength, which could pull the global economy into the recession danger zone.

Brexit: Out of the EU, Into the Unknown | Morgan Stanley

David Cameron will address Parliament Monday after a weekend of political turmoil that left Britain looking rudderless following the shock vote to leave the European Union. The attempt by opposition Labour Party lawmakers to throw their leader Jeremy Corbyn overboard, coming on the heels of the prime minister’s announcement that he will be gone in months, left the sense on Sunday that Britain was facing its greatest crisis in half a century with neither a functioning government nor an opposition. Ministers who did break cover were unable to say what Britain’s future relationship with the EU might look like -- that was a matter for Cameron’s replacement, they said. Boris Johnson, one of Brexit’s most senior supporters and a favorite for the job, sought to reassure Britons in his Telegraph column, published Sunday night, saying fears of the vote’s consequences were “wildly overdone.” But while he stressed there was no hurry to start negotiations with the EU, he fell short of putting forward any kind of plan.

Cameron to Face Lawmakers as U.K. Drifts Aimlessly to Brexit - Bloomberg

Only the Liberal Democrats, who were nearly wiped out in the 2015 general election, see a clear path. Leader Tim Farron said the party would pledge to keep the U.K. inside the EU. Although this is an offer the country has just rejected, a party that plainly rejected Brexit could pick up the support of many of the 48 percent who voted against it. “The total lack of leadership in the wake of the referendum is probably even more worrying than the vote’s unexpected outcome,” wrote Carsten Nickel, deputy director of research at Teneo Intelligence, in a research note. “U.K. domestic politics should be considered as a source of political risk for the foreseeable future.”

Cameron to Face Lawmakers as U.K. Drifts Aimlessly to Brexit - Bloomberg

Britain isn’t a member of the euro, but the U.K.’s vote to exit the European Union lays bare fears that a spreading political backlash against Europe’s longstanding political order could pose a renewed threat to the survival of the shared currency. “This is actually a huge blow to the process of European integration and is incomparably more damaging than the threat of a Greek exit from the eurozone” ever was, said Nicholas Spiro, partner at London-based Lauressa Advisory, in a phone interview.

Will the euro survive Brexit aftermath? - MarketWatch

Internal documents from the pro-Remain group TheCityUK show that they could live with an EEA option - or hybrid variant - that would preserve the City's viability by safeguarding EU passporting rights for financial services.

Parliament must decide what Brexit means in the interests of the whole Kingdom