A Boris Johnson victory in the next General Election would be a catastrophe for investors as share prices and sterling are likely to plunge, according to a leading financial expert.
Johnson has kicked off his campaign to take over as the next leader of the Tories.
If he wins, the move would put him in 10 Downing Street for the next General election, slated for no later than May 2022.
The bookies have him as favourite to win both, clobbering Labour leader Jeremy Corbyn in a landslide triumph of more than 140 seats.
But, says Nigel Green, CEO of deVere Group, one of the world’s leading financial advice firms for expats, his no-nonsense promise to pull the UK out of Europe on October 31, with or without a deal will hammer stock and commodity markets.
“Johnson’s no-deal relies on the idea that the absence of a deal on October 31 will by default mean a no deal Brexit. And that Parliament and Brussels are both powerless to stop it,” he said.
“This suggests that the Parliament vote against a no-deal a few months ago is limited to banning the government from making it a policy goal, but it can’t stop a no-deal through inaction.
“A likely fall in UK asset prices and the pound would not just be about his Brexit policy. He is also viewed by many as untrustworthy and lacking in consistency.
Green also looked back at how the Pound has performed during Brexit talks.
“During the past two years, the pound has been battered when it comes to its price against other currencies,” he said.
“The significant drop in the value of the pound has contributed to reducing people’s purchasing power and a drop in UK living standards. Weaker sterling means imports are more expensive, with rising prices being passed on to consumers.
“The fall in the pound is good for exports some claim, but it must be remembered that around 50 per cent of UK exports rely on imported components. These will become more expensive as the pound falls in value.
“A low pound is, of course, bad news for British holidaymakers and travellers abroad with trips increasingly expensive. Even destinations such as Dubai and China are more expensive as their currencies are pegged to the US dollar.
“Arguably, the key issue for the UK is that one of its biggest and most important sectors, financial services, will suffer from another knock to the pound. It will be hit because it is built on foreign investment that puts its faith in a strong pound.”