UK’s divorce has begun

UK’s divorce has begun

There has been uncertainty in the air ever since we decided to Brexit from the EU. With the triggering of Article 50 on March 29th what does it all mean for UK investors?

We know that by leaving the European Union will be one of the most significant changes we will have seen in the UK economy for a generation as to the impact it may make, well, it could be so small we may not even notice. However the implications of Brexit and its impact on markets is certainly a significant challenge for planning over the next couple of years. A lot will come down to the negotiations and settlement made on the terms of Brexit and for now we need to take a step back and assess what is really going on.

The UK economy against expectations has remained strong and subsequently the UK stock market surged ahead with both FTSE100 and FTSE250 showing record highs and the economy growing stronger that most developed economies since last summers referendum. Growing by 2% overall in 2016. Yes the performance of sterling has had its setbacks but in doing so it has made the UK exports more attractive to the rest of the world. With current UK interest rates restricting its appeal to other currencies, especially the dollar, a low-value pound could continue offering further benefits to UK exports and the FTSE.

Savings on the other hand do not move at rapidly as the stock market so there is unlikely to be much change until concrete facts are provided on the eventual deal made and the same probably will apply to the legal and regulatory framework of UK pension plans. The one thing it does allow it for UK legislation to deviate from EU requirements in the future.

Research suggests that six in ten (60%) of remain voters felt pessimistic about the economic outlook compared to one in five (22%) of those who chose to leave. This negativity is also having an effect on peoples own finances and how they plan to save for the future.

Whatever the outcome attention on Brexit will continue in the coming years and investors should be prepared to respond to opportunities rather than getting caught up in all the noise.

Professional advice is essential

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.


Zurich UK survey, 24th March
M&G investments