2021: The Year of Optimism (and the Ox!)

It was touch and go for a while, but a post-pandemic Britain—free of the shackles of the oppressive, socialist European Union—is set to race forward. A rapid vaccine rollout, a resilient Sterling, and massive projects under development are fueling the UK’s forward motion into a positive post-Brexit and post-pandemic world.

The much-awaited London Resort, currently under development on the outskirts of London, is a bright spot post-Brexit. The ambitious project is going to bring 48,000 direct and indirect jobs to Kent and the surrounding area and it’s forecast to generate ￡50bn of gross economic activity (GVA) in the UK over the initial 25-year period.

The Brexit transition has been an arduous process, especially when COVID-19 hit forcing the country into several lockdowns. But as the saying goes “the night is darkest before the dawn,” and we’re already seeing positive developments amid the doom and gloom.

Massive and rapid vaccination programme

One of the many advantages post-Brexit is that the UK can save billions in EU membership fees which pundits say could be realigned and used to fund important projects and institutions such as the NHS.

As of writing, over 15 million people in the UK have received their first dose of the COVID-19 vaccine. This rapid rollout happened in just over two months after the very first vaccine was administered by the NHS last 8 December.

Source: BBC / Our World in Data as of Jan 28, 2021

In contrast, vaccine rollout in EU countries has been slow. Dwindling vaccine supplies due to production problems and contract negotiation issues have forced countries like Spain and France to delay or cancel first dose appointments.

While pharma companies are committed to delivering higher volumes of vaccine deliveries after March, the EU bloc’s solidarity is wavering as citizens criticise their government’s slow rollout compared to vaccinations in the UK or even the US.

Resilient Sterling bounces back

The British Pound (GBP) continues to profit as it soared to a near three-year high of more than $1.39 versus the US Dollar (USD). The Sterling’s rally is attributed to the UK’s successful vaccination programme and the rapid drop of COVID-19 cases. Plans of reducing restrictions are already being reviewed as the country looks forward to unlocking the economy ahead of other countries lagging in vaccination rollouts.

As a result of these positive developments, analysts are now predicting that the value of Pound Sterling could return to pre-Brexit levels in 2021. In an interview with PoundSterling, Paul Dales, chief UK economist at Capital Economics, says, "UK assets are well placed to shake off their underperformance since the 2016 Brexit vote by outperforming global assets over the next couple of years."

"With a no-deal Brexit no longer hanging over it, we suspect the pound will continue to be boosted by a further improvement in global risk sentiment and a rise in UK rate expectations relative to those in the US and the euro-zone," he adds.

Trade deals and fresh investments

Being freed from a single market means both positive and negative impacts on Britain. On the upside, there is the potential for the UK to reinvent itself and negotiate trade deals with new commercial partners since it’s now free from the EU’s rules and regulations.

Britain has already signed a deal with Japan and trade talks are ongoing with the US, Australia, and New Zealand. Under the “Global Britain” banner, the UK likewise makes ASEAN countries a “high priority” with free trade agreements already signed with Singapore and Vietnam.

Fintech startups are also infusing fresh capital into London, further solidifying its reputation as a global financial centre. Revolut Ltd. and Monzo Bank Ltd. managed to raise a combined $4.3bn last year, placing the UK ahead of China and Germany.

The multi-billion-pound London Resort project recently passed the first planning test which takes it a step closer to the envisioned 2024 opening. The plan includes two theme park gates, a waterpark, conference & convention centre, over 3,500 hotel rooms, and an e-Sports facility. This much-needed investment injection is set to attract more investments in the area and increase economic activity.

The Brexit baggage will take a while to unpack, but the last few months has placed Britain’s recovery back on track.