October 17, 2020 // – As UK Prime Minister Boris Johnson calls Britain's attention to a no-deal Brexit, many companies and individuals will act quickly to protect their assets by examining international options, affirms the CEO of one of the world's largest independent companies financial advisory and fintech organizations.
The forecast by Nigel Green, the CEO and founder of deVere Group, which has USD 12 billion to advise, comes when Boris Johnson reports that the EU has given up the idea of a free trade agreement unless the EU makes significant changes Britain will opt for no-deal.
The Prime Minister also suggested that the UK now prepare for such an agreement.
Mr. Green notes: “Johnson has asked the UK to prepare for an 'Australian solution' to Brexit, but has not yet fully closed trade talks with the European Union.
“Indeed, the EU is preparing for further trade talks in London next week because the Prime Minister has not specifically said that he will abstain from the negotiations.
"Are Johnson's comments positive? Is it a bluff? Who knows.
"What we do know is that the only certainty for 2020 is more uncertainty."
DeVere CEO continues: “The uncertainty will make UK and international investors who have already invested in UK-based financial assets increasingly nervous.
"The Consequences of a No Deal Scenario Brexit will lead an increasing number of them to consider alternative options overseas to protect their assets through various established international financial solutions."
The financial markets abhor uncertainty. On the basis of Boris Johnson's statement, the pound – viewed as the Brexit bell tower – fell 0.2% against the euro and 0.1% against the dollar.
"Should the UK leave without an agreement, the already weak pound – one of the worst-performing currencies in the world this year – will likely remain weak for a few years before the UK and the EU readjust," said Green.
Since the EU referendum in 2016, it has already lost around 20% of its value.
“A low pound can help reduce people's purchasing power and lower the standard of living in the UK. A weaker pound means imports are more expensive and rising costs are passed on to consumers.
“The pound sterling decline is good for UK exports, some insist, but around half of the country's exports depend on imported components. These get more expensive as the pound depreciates in value.
"In addition, a weaker pound is obviously bad news for British expats, including those receiving sterling income or pensions, and for Brits planning to travel overseas."
The CEO of deVere sums up: "As the uncertainty surrounding Brexit increases, we can assume that current and potential domestic and foreign investors will increasingly look to other jurisdictions."
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