Uncertainty has been the chorus to each of this year’s major art market events—and the pervading sentiment across the wider economy as well. Brexit, the U.S. election, and concerns about the underlying fundamentals of a global economy propped up by low, and in some cases negative, interest rates have weighed on collectors’ minds and lightened dealers’ wallets. As Frieze London
and Frieze Masters
readied to kick off this week in tandem with London’s major fall auctions, the political and economic climate got a bit more certain—but not in the way many had wished.
At the U.K.’s Conservative Party conference this week, Prime Minister Theresa May quashed any lingering hopes among Londoners that their government would simply never invoke Article 50, the provision of the Lisbon Treaty that starts a two-year clock for Britain to officially leave the EU. That process, the PM declared, would begin in March 2017. Next on the list of crushed dreams was the prospect of a so-called “soft Brexit,” in which the U.K. government would aim to negotiate lenient immigration policies with the EU in order to be able to more greatly benefit from the Union’s single market. No, May’s statements suggest, immigration restrictions outweigh the importance of low-friction trade with the EU, where 44% of British exports are currently sent.
Both moves have been cast by business leaders, collectors at Frieze among them, as yet another indication that the British political apparatus is more interested in populist sentiment than in the fundamentals of its economy—and intends to continue to enact policies anathema to the business and financial community at large. This populism is of course rife across the political scene of the world’s major economies and art market behemoths at present, from the rise of Germany’s Frauke Petry-led far-right party, AfD, to the potential U.S. presidency of Donald J. Trump. In the U.K., concerns about the implications of May’s comments caused the pound to plunge to a new 31-year low. It closed out the week at just $1.24, after recovering from a flash crash early Friday morning when the pound was priced momentarily for as low as $1.18. By some measures, this now places Britain’s economy behind that of France.
To the credit of Christie’s, Sotheby’s, and Phillips, London’s auctions succeeded in painting a picture of the market in rebound against this backdrop, thanks to a handful of record-setting sales and many more above-estimate results. But, in many cases, those estimates were set very low. And it would be premature to make too much of a connection between what happened in the secondary market this week and the current state of play for gallerists and dealers like those exhibiting at Frieze.