A messy Brexit is the last thing Wall Street needs

By Matt Egan and Jordan Valinsky, CNN Business
Sunday, November 18th 2018, 2:32 AM HST

The odds of a messy Brexit, where Britain leaves the European Union without a transition deal, have increased significantly. Such an outcome would be destabilizing and create enormous uncertainty. And it would likely plunge the UK, the world's fifth-largest economy, into recession.

The risk that parliament fails to agree to the Brexit terms sent the pound tumbling 2% on Thursday. UK banks fell sharply. Royal Bank of Scotland's (RBS) US-listed shares lost 14% last week, while Barclays (BCS) shed 8%.

"Rejection of the deal would increase the odds of a no-deal Brexit significantly and would be strongly negative for markets," Bill Witherell, chief global economist and portfolio manager at Cumberland Advisors, wrote to clients.

That's the last thing Wall Street needs. A bout of volatility has knocked the S&P 500 more than 7% lower since hitting a record high on September 21.

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