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The final countdown to the UK’s EU exit

Emma-Lou Montgomery

Emma-Lou Montgomery - Fidelity Personal Investing

Today’s the day the UK leaves the EU. At 11pm tonight a 47 year relationship with the other 27 members of the European Union will come to an end.

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However, little will change as the clock strikes eleven. Most EU laws will remain in place as the UK begins a transition period. That means that much existing law, including the free movement of people, will stay in place and remain unchanged until December, by which time the UK should have reached a permanent free trade agreement with the EU.

Will today be etched in the annals of history as the day the UK left the EU? Technically, yes, but in reality it’s debatable whether the 31st of January 2020 will be remembered for this. The day Coronavirus arrived on these shores, possibly. The last day of the first month of a new decade that has seen Australia burn, the threat of a US/Middle East - and potentially global - conflict, the outbreak of a pandemic, is far more likely to be remembered for all that 2020, in its very short life so far, has given us to contend with.

And the other thing it has shown is how rapidly the world can change. On 6 January worry and frenetic trading dominated markets across the world as the oil price soared in the immediate aftermath of the United States’ unmanned air strike, which killed Qassem Suleimani, a leading military figure in Iran. The risk of retaliation from Tehran was high and the world worried about how far this could escalate.

That situation appeared to calm, only to be replaced by falling global markets; this time as wary investors initially assessed the developing coronavirus outbreak in China. And that still dominates today.

The seemingly never-ending sagas that define 2019, from the interminable Brexit issue, to the continuing UK retail rout and the ongoing US/China trade war, have been replaced by rapidly-changing, market-moving events that have come out of leftfield. With hindsight, who wouldn’t willingly swap January’s events for some of the tedious, but comparatively innocuous, issues that concerned us in 2019?

2020 has given us a lot to contend with already. Global markets which entered the new year near record highs look very different today.

How will this all pan out? Who knows? What we do know is that the markets have a way of adapting to both known events, like Brexit, and unknown ones, like the coronavirus outbreak.

Admittedly, January 2020 has already thrown up more of unknown unknowns than anyone could have anticipated. And while it is unsettling, to say the least, the ability to adapt and handle these events shows that even in the worst of situations things work out, one way or another.

When it comes to investing, events are moving too rapidly in 2020 for anyone to be able to make reactive changes with any certainty. Staying invested, keeping an eye on the longer-term and staying diversified is the best approach.

And one thing for certain, that does mark today, the last day of January, for everyone is the end of what feels like a very long month. So, whether you’ll be celebrating or commiserating when the clock strikes 11pm and the UK leaves the EU, I’m sure no one would blame you for drawing a line and ending ‘Dry January’ a whole hour early.

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Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

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