Article 50 triggered: Industry reacts

Mrs May also called the German chancellor, the president of the European Council and the president of the European Commission to notify them of the letter declaring the UK’s position regarding the EU.

A Downing Street spokesperson said: “In separate calls, they agreed that a strong EU was in everyone’s interests and that the UK would remain a close and committed ally.

“They also agreed on the importance of entering into negotiations in a constructive and positive spirit, and of ensuring a smooth and orderly exit process.”

What happens now and what Brexit deal will we get?

The UK will now have up to two years to negotiate with the EU over the terms of its exit.

The UK will begin negotiations with the EU over its exit

Mayor of London Sadiq Khan told EU leaders in Brussels that a bad Brexit deal which hurts London would hurt the EU, too.

“The truth is that London will always remain a key partner for Brussels and every European nation long after Brexit is resolved.
 
“My city is not only the beating heart of Britain’s economy, but the single most important organ for growth across Europe.”

However, Markus Kuger, senior economist at business consultancy Dun & Bradstreet, felt the complexity of Brexit posed unique challenges and that it would set off a series of tough negotiations.

“It’s far too early to realistically assess the potential political and economic impact of Brexit – a real bone of contention will be the controversial departure bill, which may well see the UK pay in excess of £60bn to officially leave the EU.

“With negotiations about future EU-UK trade relations expected to take longer than the two years available, it is likely that an interim agreement will have to be struck, and we do not expect full independence to be secured until the 2020s at the earliest.”

Cutting ties with the EU could take up until the 2020s

Markus felt that the EU still seemed to have the upper hand in the upcoming negotiations, but also believed a disorderly Brexit could hurt its remaining 27 members.

“From an economic perspective, the UK is actually performing just as well as it has done since before the country voted to leave the EU, but it’s unlikely that this strong growth will continue throughout 2017.

“Politically, events in Europe over the next few months could have an impact on negotiations; elections in France and Germany – should they unexpectedly go the way of anti-EU parties – will likely destabilise the two powerhouses’ control over the European bloc.

“For now, the priority is to start developing official plans for the UK’s departure from the EU.”

How have the markets reacted to the news?

Property finance

Jeremy Duncombe, director of Legal & General Mortgage Club, said the mortgage market had remained strong and had reacted calmly since the vote to leave the EU and saw no reason why this should change.

“The fundamentals of the market remain: demand outstrips supply, interest rates remain at historic lows and we’ve seen a number of new lenders come to market very successfully in recent months.

“The heat has come out of the buy-to-let market due to government intervention, but that’s not directly Brexit-related.”

“In times of change, it is essential that borrowers use the expertise of brokers who can share their market knowledge and advise individuals on favourable mortgage deals that suit their personal circumstances.”

Anthony Browne, CEO of the BBA, added that it was crucial that firms were confident they would be able to serve their customers once the UK had left the EU.

“Ensuring trade negotiations are conducted in parallel with Article 50 and securing a phased process of implementation will be paramount in paving the way for a smooth exit that protects the interests of our customers and clients.

“We will continue to work with government and regulators to support their negotiation strategy to agree a new partnership with the EU.”

Housing market

Jeremy Leaf, former residential chairman of RICS, said the housing market had held up much better than first feared, but the undercurrents of uncertainty were still there with the number of transactions falling since the vote.

The housing market has remained strong despite uncertainty

“Inevitably this is having an impact on the market with prices softening, particularly in London, which has also been affected by the increases in stamp duty and unsustainably high prices for a long time.

“The stamp duty changes and other obligations on landlords should, in theory, give first-time buyers more of an opportunity, but lending restrictions haven’t really made it much easier for them.

“Looking forward, we expect prices to continue to be underpinned by shortage of stock, but the low level of transactions is bad news, not just for the housing market, but for the wider economy.”

Russell Quirk, founder and CEO of eMoov.co.uk, felt it would be business as usual for the property market and despite the high levels of uncertainty, he expected property values to strengthen during 2017.

“Brexangst around leaving the EU has caused uncertainty in the market, but the cooling rate of price growth over the end of last year has without a doubt been influenced more by the increases to stamp duty and second home tax, with both playing considerable roles in impacting the market.

“With the initial Brexit fears now starting to subside and property values continuing to increase on both a monthly and annual basis, UK homeowners should rest assured that the market remains one of the most resilient in the world.”

SME market

Angus Dent, CEO of peer-to-peer lender ArchOver, felt this was the beginning of a serious trial for UK SMEs and felt strong investment was required to help keep their heads above water.

“There’s a key role for alternative finance to play in helping SME borrowers maintain healthy cash flow.

“Through this period of change, peer-to-peer lending platforms can assist even more than before, giving businesses quick access to the funding they need to put themselves in a position of strength.

“We must all treat Brexit as an opportunity.

“SMEs must use quick access to peer-to-peer funds to fire up their businesses – and avoid being dragged down by uncertainty.”