After a reasonable start to the year, UK tropical timber importers report a marked slowdown in business in recent months which they attribute to market nerves surrounding the country’s still unresolved future relationship with the EU.
Despite a “do or die” pledge by the prime minister to ensure the UK left the EU by 31st October 2019, the end of the most recent extension period granted by the EU27 in March, this deadline has been missed as the UK parliament again failed to ratify the withdrawal agreement in time.
The EU27 has now agreed to a further Brexit extension until 31 January 2020, while the UK will hold parliamentary elections in December in the hope that there will be sufficient support in the country for a new government capable of breaking the deadlock.
But there’s no certainty that this will be achieved through an election, or of the new government’s likely policy in relation to Brexit. The main parties are entirely split on this issue, the Conservative party being in favor of pushing on with the withdrawal process, the Labour party expected to campaign on a platform supporting a new referendum, and the Liberal Democrats wanting to stop the withdrawal process in its tracks and return to the EU.
This highly uncertain political situation has contributed to a wider economic slowdown in the UK, characterized by declining business and consumer confidence and rising risk aversion.