Theresa May’s speech struck exactly the right tone – confident and firm, but at the same time conciliatory. Whist the nature of a difficult and complex negotiation necessarily means that further details are likely to be thin on the ground for a considerable period of time, we do now know which direction Mrs. May wants the country to travel in, so the point of maximum uncertainty should now be behind us.
The fact that Sterling is up so strongly today indicates that the world at large agrees with this sentiment. The financial services sector, as it seeks to preserve either an element of passporting or at least ‘equivalence’ in the eyes of the EU, has greater cause for optimism than it did in the immediate aftermath of the Brexit vote.
Furthermore, in the event that no satisfactory agreement on these things is reached with the EU, London firms can at least be confident that the UK government is fully prepared to pursue an alternative economic model in order to keep one of its flagship industries competitive on a global basis.
In our attempts to remain in favour with the EU we must not lose sight of the competition from America, which will likely become keener if Donald Trump’s administration pursues a course of banking deregulation. Talk by HM Government of an ‘alternative economic model’ hopefully indicates that dynamic is being taken into account.