There has been a lot of news coverage about the possibility of Britain leaving the EU. It’s a hugely complex subject which has certainly brought out a lot of passion on both sides, but which has caused frustration and confusion for anyone looking for certainties and facts. We’ve put together a summary of how the possibility of a Brexit is affecting the financial markets.
The asset finance publication Leasing Life is reporting pretty much a 50/50 split in the question of staying or leaving amongst UK brokers in the bridging, development finance, asset finance and mortgage markets. 21% believe that leaving the EU will have a positive effect on business, and 31% think it will have a negative effect. The rest think that it doesn’t matter which way the vote goes, there’ll be no effect at all.
The Financial Times reported that retail trading platforms are asking for higher cash balances for transacting in Sterling and UK shares in an effort to protect themselves and their customers from potential market shifts ahead of the EU referendum.
Investors are also divided on the subject. The Investors Chronicle asked some of the UK’s top 100 managers for their views and got an interesting range of replies. Many agreed that a Brexit would weaken Sterling with a subsequent increase in mergers and acquisitions, a fall in share prices, slower growth, less investment, a possible recession. Thinking about a remain vote, many are predicting a short-term spike in Sterling followed by a drop caused by less confidence in the government, a bounce in shares, a rise in inflation, and certain sectors such as UK financials could outperform. Everyone, however, agreed that the referendum has caused a lot of uncertainty and confusion.
Such is the uncertainty about the vote, a number of the global banks will have their traders working overnight on 23 June to be able to monitor the markets and handle client trades.
All we can do now is hope that 24 June brings with it certainty and positivity. Meanwhile if you are thinking of a change closer to home (we mean a career change) call us on 01279 713900 or visit our website for more information and advice.