Five Brexit scenarios for investors to chew over
By Kristen McGachey, 21 Jun 17
Brexit negotiations are officially underway. But what’s the final Brexit going to be – hard, soft, wobbly, red white and blue? Or will the UK economy simply plunge off the cliff edge? Investors weigh in.
Seven Investment Management’s Chris Darbyshire agrees that it will be a “hard road to a soft Brexit” but added that the outcome would ultimately be a win for sterling.
He said: “Short term pain is the catalyst for soft Brexit: British economic growth is slowing, inflation has surged, and that inevitably eats into people’s wealth. UK consumers are now losing 1% of their income a year to inflation. Meanwhile, consumers are spending beyond their means even more than before the credit crunch.”
The level of political discontent, coupled with “economic deterioration” and the hit to real incomes would ultimately result in a second general election.
In this sort of scenario, the UK would end up in an European Free Trade Association-type agreement, “somewhat spun by the government to still be Brexit.”
Tags: Brexit | Investment Strategy
