One year on from the Brexit vote, UK stocks continue to lag peers in Europe and elsewhere as a cloudy outlook for sterling dented appetite among foreign investors. Ivor Bennett reports on the prospects for Britain in the week Brexit negotiations began.
Britain may still be part of the EU but with negotiations now underway for it to leave, this was a trip behind enemy lines. Theresa May called her opening gambit 'fair and serious'. That no EU national living in the UK at a cut-off date would be deported. But with the cut-off date yet to be determined, the view from across the table was very different. (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "That's a good start. But of course there are many, many other questions." (SOUNDBITE) (German) AUSTRIAN CHANCELLOR, CHRISTIAN KERN, SAYING: "This is a first suggestion but it doesn't solve the whole problem. It remains unclear for a lot of people affected." After losing her majority at home, Theresa May has adopted a softer stance towards Brexit. But it's not just the election that's weakened her position in the year since the vote to leave. The economy has too. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Of course Prime Minister May appears to have made some concessions but the problem for the UK is that it's not really in a robust enough position both politically and economically to set the agenda." Sterling is still 13 percent down on where it was this time last year. And with inflation still rising, and wage growth stagnating, some fear what economists call stagflation. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "It does feel to me very much as if UK growth has peaked and is subsiding. Whether the UK will experience recession remains to be seen but a prolonged period of very subdued growth seems to me very likely." The Brexit vote was initially a boost for UK stocks but there too, uncertainty is bedding in. The FTSE 100 is up just 4 percent in the year to date, making it the weakest major European market. If you thought the last 12 months were unpredictable, then try predicting the next 12.