Wish us luck as you wave us goodbye

Well, it’s happened, and we’re coming out. Whether we like it or not, the future of the (currently) United Kingdom will be independent of the European Union. On a personal note, I was hugely disappointed with the conduct of both campaigns: it seems to me, that the cases that were presented were, at best, misleading, and at worst, downright lies. It saddens me that our political elite have such a low opinion of the great British public (or an over-inflated sense of their own importance) that they cannot, simply, tell the facts – as far as they may be known – and not make dark threats, or promises that can never be fulfilled.

On a brighter note, it gives me a certain amount of pleasure to look back at my previous article, and see that my prognostications were pretty accurate. The world hasn’t stopped turning and life is still going on. The FTSE100 fell out of bed on the result, but recovered; Sterling fell, not only out of bed, but through the floor! Pretty good, if you are a UK-based multi-national company with lots of overseas earnings. Not so, if you are a UK-centric business, especially one that is reliant upon imported goods. This accounts, to a large degree, for the marked differences between the share price performances of many well-known names.

The banking sector, in particular, has suffered. The prospect of a reduction in interest rates and the thought of an element of stagnation in the business sector have made the shares seem somewhat less desirable, and many banks gave back a fair proportion of the gains that they had made over the last few months. The more international the customer base, the better they have fared. Fortunately, the Governor of the Bank of England, Mark Carney, helped to calm things by pulling a £250 billion pound rabbit out of his financial hat, and subsequently stating that the provisions for the higher levels of banking reserves would be relaxed (previously considered vital for the safety of banks, and their customers, after the previous banking crisis). More than a few interested observers wondered where that much money was when “austerity” was the key word, and our fiscal deficit was begging for someone to push a pretty sizeable plug in the leak.

The building sector took quite a thrashing too, with many household names losing a quarter of their value overnight in the light of an anticipated house-building slowdown. I have had several mortgage applications and property purchases stalled, due to either waiting for prices to fall and thus getting better value, in the case of new purchasers, or sellers whose deals have fallen through as their buyers followed the same reasoning. Recent changes in the taxation of buy-to-let properties, only served to make the property market more risky.

Still, it shouldn’t all be doom and gloom. We British are made of stern stuff and will make the best efforts in the process of leaving the EU (apart from the Scots and Northern Irish, who got exactly what they voted against in very large numbers).

Anyone who was fortunate enough to pick up a bargain in the hours following the announcement of the result, well done. Anyone who didn’t, I refer them to any one of my many previous articles: time is your friend, invest what you can afford, when you can afford it, then forget about it for a few years, and have a life!

I’ll be back amongst the mists, and mellow fruitfulness.

David Foot


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