Investors must protect their assets as sterling tumbles and a recession looks on the cards
What a day it’s been in British politics. The Queen has accepted the Prime Minister’s request to suspend parliament from mid-September, therefore reducing the time available to MPs to stop a no-deal Brexit.
The Brexit-battered pound has since taken another beating thanks to Boris Johnson’s highly polemic parliament suspension.
Sterling has fallen more than 0.5% against both the euro and U.S. dollar following the decision, and the pressure will remain on the pound as a no-deal Brexit becomes an increasing possibility.
Should Britain leave the EU with no-deal, sterling will likely stay weak for a number of years until the UK and the bloc readapts.
Furthermore, the prospect of a general election is impacting the currency.
And, should Jeremy Corbyn’s Labour party win a general election, this will signify even more bad news for the pound over the longer-term.
Corbyn’s anti-business bombast coupled with his high tax and low-profit policies would result in a substantial and sustained selling of the pound.
In addition, there is also now the likelihood of a general strike, mass protests and civil unrest as political uncertainty escalates.
Indeed, this vital period for Brexit negotiations is occurring as Britain’s economy could be on the brink of a recession, which will represent yet another bloody nose to investment, trade and confidence in the country.
Therefore, as the pound plummets and Britain is faced with an impending recession, investors holding UK assets – including UK pensions, bonds and sizeable holdings of sterling – should look into international options to safeguard their wealth.
The PM’s decision to suspend parliament will have extensive economic effects, many of which we won’t know about for several years.
As such, investors who are serious about accumulating and protecting their assets should consider legitimate overseas options as Britain moves into an unparalleled crisis.