United Kingdom: The endless circus | Analyst Picks | RiskMap 2020
The endless circus
Now that UK Prime Minister Boris Johnson is backed by a hefty majority for his Conservative Party, the path to Brexit on the terms of the deal he struck with the EU is clear. After January 31, the UK will no longer be an EU member, but this will only be the beginning of a long period of change as the country seeks to redefine its international partnerships. The UK could yet decide to retain close alignment with the EU, its largest trading partner, or it could strike out on its own to seek new trade alliances around the world, abandoning its commitment to European regulatory frameworks as it goes.
With evidence indicating that businesses have put significant investment in the UK on hold during the Brexit process, 2020 is unlikely to give cause for greater confidence. The UK’s future relationship with the EU will take years to clarify and the domestic regulatory picture is likely to remain uncertain.
The UK’s 2016 vote to leave the EU has contributed to a fundamental change in the country’s political stability, which is likely to continue to develop in 2020. Ahead of the referendum, there was already evidence that the country’s electoral system had ceased to guarantee stable majority governments. Brexit has reinforced this, fracturing traditional political parties and creating new dividing lines among voters. It seems unlikely that anything will happen in 2020 to reverse this fragmentation of the UK’s political picture. Meanwhile, although Westminster will remain the focus of political drama over the coming year, the UK’s constituent parts are losing patience and the union of England, Scotland, Wales and Northern Ireland is likely to continue to look weaker than ever.
Irrespective of when (or if) the UK leaves the EU; the implications of the Brexit vote are only beginning to become clear.