All UK-centric stocks that have been hit by Brexit are up the last couple of days . Why? My take is that Johnson has called No Deal a failure and also announced a change in policy to allow an additional few hundred thousand extra immigrants via foreign students being allowed to stay on for 2 years after graduation.
Meaning they will qualify for 5 year naturalisation at the end of their course plus the extra stay, presumably (not sure if a student visa counts towards that). This had been restricted to 4 months since 2011 by Theresa May. Anyway, once a graduate has been in a job for a couple of years I assume it will be easy for employers to argue the need for them to stay under the current rules as having skills that can’t be replaced from the job market.
This is a real move to attract the ‘best and the brightest’ from abroad, rather than just lip-service with an actual introduction of a ‘hostile environment’.
Ironic (tragic might be a better word) that Brexit leads to extra freedoms for foreigners from all over the world but restricts options for the British.
Additional immigration is the easiest way to raise GDP, and by ensuring that the extra immigrants are graduates or above, one can assume it will also raise GDP per capita. This will act as an economic buffer for 3 years (and longer for masters and doctorates) so far as the figures are concerned during the chaos of post-Brexit uncertainty starting November 1st.
It means more demand for housing and consequently mortgages and further investment in build-to-rent properties. Hence the big rise in UK-centric banks and housebuilders. PSN +4%, TW +2.6%, BDEV +2.6%, Bellway +2.6%, CRST +3.4%, just today.
Does the policy change require legislation? If so, how does Johnson get it through parliament? I don’t know the answer to those questions which is why I hadn’t posted about it previously.
More importantly, perhaps, has the government got plans to spend more on supporting services and infrastructure for a leap in immigration - or are they going to make the same mistakes as previous governments? Will those working class areas shouting for a No Deal Brexit and an end to immigration realise this government slipped through this change on the first day parliament was closed possibly in the hope it will go unnoticed?