Important Links

PM Johnson Suspends Parliament in Bold Move

3 September 2019EuropeEconomicsPolitics

British MPs are crying afoul after Prime Minister Boris Johnson received the Queen's approval to suspend Parliament from Sep 9 and to resume on Oct 14. This move has further heightened the risk of a no-deal exit on Oct 31, as it dramatically limits the time available for Parliament to manoeuver an alternative solution or to block a no-deal exit.

Citi analysts believe the parliament could trigger a no-confidence vote, however, the chances of defeating PM Johnson appear low. It relies on how many Conservatives vote to bring down their own government, and ignore the green shoots of hope from recent EU meetings (EU officials' agreement to look at alternative UK suggestions for the Irish backstop). In the event of a successful no confidence vote, PM Johnson might call a general election in five weeks, just before the EU summit (Oct 17-18).

PM Johnson Suspends Parliament in Bold Move

Past performance is no guarantee of future results, real results may vary

Citi's investment strategy remains unchanged

  • Avoid immediately chasing any recovery rallies in GBP or equities and only trade on confirmed developments not speculation, as uncertainty may be high for the next six weeks.
  • However, Citi analysts see opportunities for both GBP and equities at lower levels over the next six weeks. This is based on two assumptions:
    • 'No-deal' remains possible, however will be less of an economic catastrophe than previously expected and less than the market is discounting.
    • Labour party losing support in all the indicative snap general election polls. The party's probable hard-left economic policies would likely be business-unfriendly.

Equities - The average price-earnings ratio (PER) of 12X and dividend yield of 5.1% look attractive. Citi analysts prefer liquid blue-chip exporters with high dividend yields.

Currency - On a real effective exchange rate basis, GBP is trading near historic lows. Citi analysts expect further short-term GBP weakness as both ‘no-deal' and a snap general election are fully discounted.

Our recent research

China's Slowing Growth Backdrop and Trade Headwinds

The combination of trade conflict and poor domestic sentiment is hitting growth. In view of this, there may be greater impetus to ease policy in coming months.

Find out more

Emerging MarketsEconomicsPolitics

China – A Step Forward for Interest Rate Liberalization

China has introduced market-driven lending rate in a bid to lower borrowing costs amid a slowing economy. From 20 August, the People's Bank of China will use the Loan Prime Rate (LPR) as the primary tool to influence lending cost.

Find out more

Emerging Markets

Temporary Reprieve from Delay in Tariffs

While risk assets generally cheered the delay of tariffs on a multitude of Chinese goods, Citi analysts think that the delay serves to prolong trade tensions between US and China.

Find out more

US

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.