Publications

- February 1, 2017: Vol. 9, Number 2

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The phoney war: The Brexit story is about to begin in earnest

by James Buckley

The United Kingdom’s vote in June 2016 to leave the European Union has the potential to redefine the pecking order of global cities, as London seeks to maintain its dominant position while the country negotiates its divorce settlement with the rest of the continent.

The outcome of UK Prime Minister Theresa May’s Brexit appeal in the British Supreme Court (expected in January, after this issue has gone to press — Ed.) to allow the use of the Royal Prerogative — an executive order that allows the government to bypass Parliament — to trigger Article 50 and begin the United Kingdom’s exit from the EU, will likely influence the near-term timing of investor and occupier decisions.

While sterling has lost more than 16 percent of its value on a trade-weighted basis since 23 June 2016, inflationary pressures have so far been relatively benign, enabling the Bank of England to advance a dovish monetary policy stance. As a result, nominal

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