As Theresa May remarked in her resignation speech, her successor will face the same challenge of finding consensus over Brexit within Parliament. So far Westminster has been able only to express what it doesn’t want, and has failed to coalesce around a way forward. The path ahead remains as uncertain and unpredictable as the journey so far.
The possibilities, therefore, remain largely the same. Either the UK agrees to some version of the Withdrawal Agreement, or it leaves the EU without an agreement, or the country remains in the EU.
The timing of any of these outcomes remains unknown with the possibility that the October deadline is postponed yet again. There is a possibility a new Prime Minister may be able to negotiate some changes to the Withdrawal Agreement and Irish backstop problem, which may find sufficient parliamentary support. It is possible too that a second referendum will be required before any eventual outcome. Or, indeed, a general election.
Parliament has, to date, opposed leaving without a deal. With ever more weariness over Brexit, a more hostile environment for international trade and high profile bankruptcies such as British Steel in the headlines, it remains less than probable that a majority of politicians will take the risk of leaving without a deal. But you can never be certain, and the emergence of Nigel Farage’s Brexit party adds a further dimension.
So a new Prime Minister could mean very little, or possibly very great change. The one thing that seems likely is that the Conservative Party will choose a pro-Brexit leader. She or he will probably try to re-negotiate elements of the Withdrawal Agreement. If unsuccessful, it would be a cold shower for some pro-Brexit Conservative MPs, who will then face the realisation that no better deal existed after all and find themselves stuck with essentially the same set of choices as under Theresa May.
As has been the case since June 2016, financial markets will fluctuate with the mood music. But investors would be unwise to do so, as experience has suggested – no-one has an edge trying to predict the outcome of Brexit and short-term swings can quickly reverse. Meanwhile, the country carries on. Economic growth has been steady, if not spectacular, and unemployment has continued trending lower.
While domestic political news dominates British headlines, global factors carry as much significance; and, as ever, the fortune of individual businesses will too depend on their ingenuity and competitiveness.
UK equities offer geographic and industry diversification – and a near 5% prospective dividend yield, which seems very attractive compared to competing yields on cash and government bonds.