Some of the biggest backers of Leave were the managers of multi-billion pound hedge funds, such as Sir Paul Marshall and Sir Michael Hintze. Why should they be so keen to cut our links with Europe?
Leaving the EU will mean losing financial 'passporting'. These allow financial services to be freely traded across borders. Brexit means losing these rights, so surely fund managers should have supported Remain just like banks did?
Fund managers are clear that leaving will put the UK in a very difficult economic position, unlike many high-profile Brexit supporters. We face losing our friction-free trade with Europe (around 50% of our exports go there) without yet having any compensating trade deals sorted out elsewhere.
Of course, our Brexit secretary, Mr Barclay at time of writing, promises that we will soon strike those trade deals, and even if things are not as simple as Mr Davis made out when he had first go at the job we will certainly recover a lot of lost ground over time.
So, essentially, we will have period where UK businesses will struggle as they are cut off from their markets and quite a number will go under. This will mean their creditors selling up them and their assets at fire sale prices. Given that they are sound businesses, once other trade deals are made they should build their value back up soon enough. Whoever snaps them up when they are cheap stands to make a pretty penny.
Coincidentally, that is what hedge funds do.
Surely the leaders of our financial industry wouldn't mess with the British economy just to make a few more billion quid?
Ever heard of Libor?
No comments:
Post a Comment