BREXIT! You can relax

Worried about BREXIT! You can relax… There are too many vested interests in Europe to allow Brussels to punish the UK.

Barnier and Junker want to teach a lesson to the UK and others who may wish to leave, but they do so at great risk to Europe.

As Independent Financial Advisers, we are responsible for over £400m of our investor’s money. We have to be abreast of economic matters. Some recent research conducted by a leading investment fund makes very interesting reading.

Immediately after the 2016 referendum, the sterling pound fell. The level of the pound is your best gauge, not against the dollar, but against the euro, and other currencies of the  EU27. It tells you how hard BREXIT really is. The harder the BREXIT, the lower the pound.

Many key businesses across Europe depend on the spending power of the U.K. A weak pound will severely damage that.

  • Ignore the near 1 million Brits living in Ireland, Spain, France, the Netherlands, Cyprus and the rest of Europe whose main income is in sterling.
  • Ignore the massive number of EU nationals who work and earn in the UK. 1.6m from Poland have UK national insurance numbers. 831,000 from Romania, 338,000 from Lithuania, 290,000 from Portugal. These people usually send UK earned money home.
  • Ignore those countries with huge UK tourism earnings, Ireland 4m visitors, Spain 15m visitors, France 12.2m, Portugal 2.2m.
  • Ignore the fact that the UK is a key export market for Ireland 13.2% of its exports, Belgium 8.7%, Sweden 7.1%, Portugal 6.7%, Spain 6.6%, Germany 6.1%.

Ignore all of that. There is a powerful corporate lobby across Europe, which will use its influence behind closed doors. The power brokers of Europe have a major insurable interest in the UK. Their fear and greed is the strength in the UK’s negotiating position.

Who owns who these days?

Think of TSB, Abbey National, Heathrow Airport, Talisman (once BP’s pride and joy), Scottish Power and MMO2 (demerged from British Telecom). All these now in the hands of Banco Sabella, Santander, Ferrovial, Repsol, Iberdrola, and Telefonica. These are a major part of the Spanish stock market IBEX35.

Across in France and Germany, Veolia, EDF, EON, and RWE own much of our UK utilities.

BOC now owned by German listed Linde, Hanson now owned by HeidelbergCement, UK Mail now owned by Deutsche Post. Jewson Group now owned by the French Saint Gobain. Dulux Paint owner ICI now owned by Akzo Nobel, listed in Holland.

What of BTR and Siebe. They merged to become Invensys, which is no more. Well no more listed in the UK, but its UK assets are owned by Schneider of France and Siemens of Germany. And so it goes on.

In the last 20 years, Britain has been the target of Continental Corporate Colonialism. Therefore the harder the BREXIT, the harder the landings for a huge swathe of European Corporates.

These Corporates will make their voice heard.

To quote my investment research sources, THE RAIN IN PLAIN UK WILL BE FELT IN SPAIN.

The conclusion of their work predicts an amicable BREXIT deal. If they are correct, the pound will rally. Yes, a divorce bill will have to be paid but this sum paid over a long period should be seen in the context of an economy measuring two trillion pounds of GDP.

To discuss your investment or pension performances contact Mark O’Neill at Jones Harris Chartered Financial Planners on:  01253 874255 or email: mark.oneill@jones-harriscfp.co.uk

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