Brexit Phoney War As Britain Waits To Push Exit Button

Fears over the British Brexit vote bringing chaos to the world economy seem unfounded as the first official data emerges since the June referendum.

Although markets spiked downwards soon after the Brexit decision, they have rallied and bounced back higher than their pre-vote positions.

British manufacturing data shows factory order books are not suffering and many companies point to a flow of requests for goods from Europe.

In the US, job and inflation figures are holding good, with the Federal Reserve hinting at an official interest rate hike maybe as early as this month.

Although stock markets and the economy seem stable, Britain is in a phoney war period with the European Union.

Who will blink first?

Governments both sides of the Channel are posturing about their standpoint in the forthcoming Brexit negotiations.

Leaders are declining to comment about their default positions in the talks, but are leaving other ministers and officials to drop heavy hints.

In Germany, Angela Merkel is decidedly doveish about doing a Brexit deal on good terms with Britain.

However, the US and European transatlantic trade treaty talks have stalled after three years of little progress.

This could be a sign of both sides playing a wait and see game over how the world economy will react when British Prime Minster Theresa May finally pushed the exit button sometime in the New Year.

Fostering relationships

British officials have spent time sounding out their counterparts in order to smooth the way to a soft landing for Britain.

It’s no coincidence that in recent months, Downing Street and the City have forged trade and financial links with emerging economies in India, the Gulf and China.

Britain also has that ‘special relationship’ with Washington, but that may depend on whether Donald Trump or Hillary Clinton end up in the White House after the presidential race ends in November.

The furore between Ireland, the US and the EU over Apple’s billions owed in back taxes will also influence the Brexit result for Britain.

Ireland is a close ally and a member of the Eurozone. Other EU nations will be keen to avert another exit referendum which could well see the first single currency member leave the bloc.

Interesting times are ahead in world politics and economics.