As we’re sure you are aware Britain has voted to leave the European Union. Despite the general consensus that they would stay, this has surprised the markets and we have seen a fair bit of volatility on the local market, whilst Europe and the Britain’s markets have been hit very hard.
The main areas of consideration for British citizens were tabled as:
* The current free immigration policy seeing up to 500 people per day moving to the U.K. from mainly Europe (impacting job’s and welfare payments)
* Approximately $1bn in fees paid each year by the UK to the European Union for membership
* 40% of the U.K.’s current exports going to Europe which will result in many existing trade deals to be re-negotiated
It is important that we put Britain’s vote to leave the European Union in perspective – the U.K. is less than 4 per cent of global gross domestic product and accounts for only 2.7% of Australia’s exports. A small number of ASX listed companies that generate revenue in British pounds or who have assets in the U.K. will see some volatility, however the overall impact in Australia will be subdued.
Investors should be aware that the fear of the unknown is often far worse than any of the outcomes that can actually play out. Officials from the Reserve Bank of Australia advise, that while the outcome is terrible news for Britain and to a lesser extent the European Union, the economic impact will be more muted across the rest of the world and particularly in Asia, where Australia’s fortunes are more closely aligned.
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Director and Wealth Advisor
Endorphin Wealth Management
Phillip Richards is a qualified Financial Advisor with more than seven years’ experience in the industry. His expertise in investment, debt management, retirement planning and insurance will help you assess your options to build your wealth. Contact Phillip today to discuss how you can build your own wealth and plan to reach your goals.
This information is general in nature and does not take your personal situation into account. If you are interested in taking control of your wealth, contact Endorphin Wealth Management.