- "You can see how investment in the U.K. has fallen off a cliff, and that is not good as a dynamic part of the economy," Weber told CNBC.
- Britain has requested yet another extension of the Oct. 31 deadline to leave the European Union after U.K. lawmakers delayed a vote Saturday on the withdrawal agreement negotiated by Boris Johnson.
- S&P Global Ratings calculated in the spring that Brexit had, by last April, cost the U.K. economy $86 billion.
The chairman of Switzerland's largest bank is seeing what he calls an investor strike as the confusion and uncertainty surrounding Britain's exit from the EU intensifies.
"I think you've seen, with Brexit but also with the trade disputes, that there has been an enormous increase in uncertainty," UBS Chairman Axel Weber told CNBC's Geoff Cutmore on Saturday. "Uncertainty has been bad for investments all along. What you're seeing at the moment — and we're seeing it in our client base — is almost an investor strike."
The German investment banker's comments came during the 2019 Annual International Monetary Fund meetings in Washington, D.C., where discussions focused heavily on global economic turmoil caused by trade wars, protectionism and political instability.
"The way I look at that is while interest rates are very very low, and the costs of investment are at historic lows, the increased uncertainty about whether those projects will pay off, whether rejigging your whole production chain will pay off, by having parts of that production chain be in China — or for Europeans, in the U.K. — is a huge uncertainty," Weber said. "And people will not take these decisions until the political decisions are taken."
S&P Global Ratings calculated in the spring that Brexit had, by last April, cost the U.K. economy $86 billion. The uncertainty following the vote led to a dramatic decrease in the value of the pound, increased inflation, a fall in household spending power, weak exports, declining real estate prices and the stalling of local and foreign investment.
In the latest developments, Britain has requested yet another extension of the Oct. 31 deadline to leave the European Union — which would be the third extension since the June 2016 referendum — after U.K. lawmakers delayed a vote Saturday on the withdrawal agreement negotiated by Prime Minister Boris Johnson.
The lawmakers voted to activate a law that required Downing Street to ask Brussels to push back the deadline for Brexit, despite Johnson's vocal objection to another extension.
But EU leaders don't have to accept the extension request, and there are a number of ways they could respond. They could offer a technical extension of a few weeks in the hope of passing the recently-negotiated agreement with Johnson; they could agree to push the date back to January 31, opening the door to a U.K. general election and a potential second referendum; or they could refuse the extension request altogether, possibly triggering an economic crisis for both the U.K. and EU.
EU Council President Donald Tusk said he received the extension letter and that he would begin consulting with EU leaders on how to respond to Britain's request. Meanwhile, Cabinet Minister Michael Gove said Sunday morning that the U.K. would indeed leave the EU by October 31, adding yet more confusion to the outlook.
Despite all this, Weber is "more positive that we'll see an orderly Brexit," he told CNBC Saturday. "But investors still want to see it on the table. They have been, too many times the project has been delayed, and they're just holding out and waiting for investment. And you can see how investment in the U.K. has fallen off a cliff, and that is not good as a dynamic part of the economy."
"So where I see a big risk is a kind of broad-based investment strike at the moment, about the uncertainty that we have in the global economy, which is politically made rather than made by markets. And that is a really bad environment."
—CNBC's Spencer Kimball and Matt Clinch contributed to this report.