Yet the truth is that we have little idea what will happen now, but www.asadkarim.co.uk can make some basic assumptions on the next stages of what may happen:-
Economic Confidence effects may become forceful. Confidence, very much long fragile, had just been starting to return, worries about China’s growth were reducing, and in the UK too. However, the uncertainty that Brexit brings a guess is that now investment weakness now seems almost inevitable.
Brexit will weaken GDP at first. Stronger exports, stronger manufacturing, and weaker services may well follow the weaker pound. But the UK has a relatively small export business, yes we export, such as Jaguars, Land Rovers, Range Rovers, BMW Mini’s, Vauxhall Astra’s etc , but to take advantage of the weak pound we need to rebalance the economy and develop that export base and make it bigger, which means wide scale reform, which takes time, so real GDP weakens before, ultimately, it strengthens if companies decide to expand.
Foreign direct investment may well fall aggressively. Indeed it already is. Ford has already paused investment plans, HSBC may move 1,000 jobs to Paris, and Morgan Stanley may move 2,000 jobs to Dublin. In the current uncertainty, Why would anyone make a long term decision on investing in the UK ?
Political turbulence set to endure. The Labour party is in total meltdown, resignations by the hour from the opposition front bench. The Conservative party is torn; and sadly the Liberal party pretty much irrelevant. Scotland is toying with the idea of seeking independence and would like to join the EU, but no guarantees that they could join the union, as Spain will have potential have objections due to its own internal issues. Wales is a net gainer from the EU, and they voted out, they clearly do not know what they want. What about Ulster, as The Republic of Ireland faces the prospect of an EU south, a non-EU province north. The Union has some choppy times ahead
Financial services will come under pressure. Yesterday Barclay’s fell 10% in value and shares were initially suspended. Banks will follow the business, and the business will follow the regulations. Banks can easily move to Paris, Zurich, Frankfurt or Dublin, unless it is hard to replicate the London workforce.
Trade negotiations will likely take years. They generally do. Could take 5-7 and the UK will have over 60 agreements to finalise.
Lack of Government. So let’s hope our Bank of England can meet the challenge, as it is the only relevant institution that remains fully functional, ironically run by an immigrant, the migrant from Canada, Mark Carney who is exceptionally brilliant.
What I have documented are the Real Risks that we face, these are my humble views, but I have been taught about risk by some exceptionally superb people, thank you Peter Harris…..