You may think that the title of this week’s ‘World in a Week’ relates to the protagonist of a play, disappointingly this is not the case. Prorogue is the technical terminology for the discontinuation of a parliamentary session without formerly dissolving parliament. This is what Boris did next, when he announced that parliament would be suspended from mid-September to mid-October, in order to push through Brexit. In a move which received approval from the Queen, Remainers will now have significantly less time to prevent a disorderly Brexit. While it has been cited that Boris will have much greater leverage and credibility in the EU renegotiation of a Brexit deal, he is also at risk of facing a vote of no-confidence, which could trigger a possible election. The Pound came under pressure against the US Dollar on Boris’ announcement, be sure to stay tuned for the next act…
Staying in Europe, equity markets rose steadily last week. The reasons for this were two-fold; firstly, the US/China trade discussions showed signs of improvement, which was positive for Germany whose economic data demonstrated that they had managed to stave off a recession, for now at least. Secondly, Italian markets received a significant fillip when populist party 5-Star Movement and the centre-left democratic party agreed to formalise their plans to build a coalition government. The Italian stock exchange, the FTSE MIB, rose nearly 4% on the back of this news. This positive news was marred by the fact that the coalition will face immediate and tough challenges such as the country’s mounting debt, a stagnating economy, and the expectation that they are likely to breach their target budget deficit in 2020. Italy have already come under scrutiny by the EU in May of this year. It is broadly expected that the coalition will go ahead but with political views that are poles apart, it is questionable whether the coalition will be sustainable over the longer-term.
