The debate between the five men vying to be the UK’s next Prime Minister underscores that the pound and UK assets can be expected to fall further, affirms the boss of the world’s largest independent financial advisory organisations.
The comments from Nigel Green, founder and CEO of deVere Group, which has $12bn under advisement, comes following former Brexit Secretary Dominic Raab being eliminated in the second round of voting, ahead of a live televised debate between the remaining five: Boris Johnson, Jeremy Hunt, Michael Gove, Sajid Javid and Rory Stewart.
Unsurprisingly, Brexit dominated Tuesday evening’s debate.
Mr Green notes: “The debate between the five men vying to be the UK’s next prime minister underscores that the pound can be expected to fall further.
“The chaos and uncertainty triggered by Brexit – which has recently intensified by the race to become the new Prime Minister – has put the pound on a considerable downward trajectory.
“An already battered pound has lost almost 5 per cent of its value against the U.S. dollar since the start of May. Similarly, it continues six straight weeks of falls against the euro.”
He continues: “The debate on Tuesday night – the first one in which Boris Johnson, the frontrunner, has taken part – underscores in the most dramatic way that there is still no single realistic way forward out of the Brexit quagmire.
“None of them could answer how they would get their version of Brexit over the line.
“As it stands, the facts remain that parliament will not back the deal as agreed with the EU; it will not back a no-deal scenario; and it will not back a second referendum.
“As such, there is still no path through this – and it has already been going on for three years.”
Mr Green goes on to add: “Against this backdrop of growing uncertainty and a looming deadline, the pound and UK assets will likely have further to fall.
“It is hardly surprising then that UK and international investors are responding to the Brexit-fuelled uncertainties by considering removing their wealth from the UK.”
The deVere CEO concludes: “The lack of real answers from the candidates on the most pressing issue for a generation will inevitably impact the pound and UK assets.
“Nothing has already been priced-in as there is, currently, nothing to price-in.”