Saturday, June 25


Well that was cool.

Little Britain will soon be out of the European Union. The odds-makers and punters, until Thursday night's vote, expected the UK to remain but 52% of the voters said otherwise. The shock outcome has resulted in a decline in Stirling by 7-8% (far less btw when the country borrowed from the IMF in '78 and the pound fell a third or the exit from the FX mechanism in 1992 when it went down 25%), decline of 3-4% of the Footsie and a Moody's down-grade. Painful but no crisis.

Longer term, who knows ? But it is clear the new uncertainty will make foreign investment less likely not more. Europe will wish to punish Britain with tariffs and Obama has confirmed we will be "at the end of the queue" for trade agreements.  Cameron resigns. Junker has demanded we negotiate the separation without delay.

UK banks may leave to access Europe. If Brexit kills The City, it will have choked the goose that lays the golden egg. Do not forget, dear reader, that London exports £25b to the rest of the country  (London 60% in favour of Remain).

As for the leaver's objective - border control - immigrants will continue to enter the British economy because we need them, especially for skills the country does not manufacture or labour the Brits won't do. Unless, of course, the economy shrinks which is now possible following 2% growths for the last 3 years creating 1m+ jobs.

So Nigel Farage and Boris Johnson have won the day. Could it happen in the USA ? The odds-makers gave Brexit much less chance than Trump becoming President (17-1 against vs. 4-1 against).