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  • FIRST POST
    • Oliver1191
    • By Oliver1191 12th Aug 18, 2:06 AM
    • 62Posts
    • 25Thanks
    Oliver1191
    What are the benefits & cons should the UK leave the EU?
    • #1
    • 12th Aug 18, 2:06 AM
    What are the benefits & cons should the UK leave the EU? 12th Aug 18 at 2:06 AM
    I ask this question only to debate and encourage understanding from a financial perspective. This could cover, but is not limited to, pensions, savings, income, mortgages, etc.

    I am not asking the question based on the referrendum result or the subsequent general election which selected the manifesto the country wanted (including the UK's next steps).

    I am not expecting this question to answer the bigger picture of whether or not the UK should leave the EU. There are other factors at play. It could therefore be the case that arguments presented here favour or are against leaving, but are limited only to, for example pensions, but are not sufficient in themselves to therefore conclude leaving or staying in the EU is the right thing to do.

    I just want to explore one piece of the jigsaw puzzle based on how things are now.

    My position is that i currently neither support leaving or staying from a financial perspective, other than that it seems sensible to have freedom of movement for labour, goods and services to allow companies to trade freely and labour to choose where it would most like to work.

    I would like to hear some informed thoughts (particularly relating to pensions and mortgages).

    ONE RULE IF YOU POST: you use respectful language
Page 1
    • Linton
    • By Linton 12th Aug 18, 6:59 AM
    • 10,082 Posts
    • 10,415 Thanks
    Linton
    • #2
    • 12th Aug 18, 6:59 AM
    • #2
    • 12th Aug 18, 6:59 AM
    There is another forum for Debates. You will find lots of people with strong views there.

    As far as investments are concerned for a sensible investor invested in shares across the world if BREXIT is a disastrous failure the £ will fall resulting in values in £s rising. So the investor wins out compared with the non-investor. And vice versa if it is a brilliant success.

    You will have your own views as to which is more likely.

    A fall in the economy would I guess cause interest rates to rise as gilt rates are increased by the government trying to protect the £ though whether that would do savers much real good depends on inflation which could also rise. The balance between inflation and interest rates also is a matter of concern for mortgage payers.

    A post BREXIT boom could also give rise to inflation as the increased demand for labour with supply being constrained by tough immigration rules causes wages to rise.

    Unfortunately we live in interesting times.
    • Glen Clark
    • By Glen Clark 12th Aug 18, 8:13 AM
    • 4,304 Posts
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    Glen Clark
    • #3
    • 12th Aug 18, 8:13 AM
    • #3
    • 12th Aug 18, 8:13 AM
    As far as investments are concerned for a sensible investor invested in shares across the world if BREXIT is a disastrous failure the £ will fall resulting in values in £s rising. So the investor wins out compared with the non-investor. And vice versa if it is a brilliant success.
    Originally posted by Linton
    I think we can rule out the possibility of Brexit being a brilliant success for the pound. The pound is only likely to rise if its called off.
    Sir David Jason remarked that Del Boy Trotter would support Brexit. He wouldn't be interested in the political question. Just what money he could make out of selling to both sides - Brexiteers and Remainers.
    For some Brexiteers there must be money to be made out of Brexit - buying distressed assets, helping companies relocate to the EU or whatever. Or money to be saved - like the £billionaire 'newspaper' owners domiciled in Her Majesty's Tax Havens, under threat of an EU wide tax directive if Britain stays in the EU.
    Last edited by Glen Clark; 12-08-2018 at 8:20 AM.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • dividendhero
    • By dividendhero 12th Aug 18, 9:49 AM
    • 287 Posts
    • 301 Thanks
    dividendhero
    • #4
    • 12th Aug 18, 9:49 AM
    • #4
    • 12th Aug 18, 9:49 AM
    Brexit Britain will end up in many ways similar to Turkey. They're a former imperial power on the edge of Europe, they also have the low regulation economy that many Brexiteers yearn for and are also NATO members - things aren't working out too well them...
    • LHW99
    • By LHW99 12th Aug 18, 1:32 PM
    • 1,582 Posts
    • 1,453 Thanks
    LHW99
    • #5
    • 12th Aug 18, 1:32 PM
    • #5
    • 12th Aug 18, 1:32 PM
    I think we can rule out the possibility of Brexit being a brilliant success for the pound. The pound is only likely to rise if its called off.
    While that may be true for the next few years, I suspect that beyond that timescale the markets will be on to the next panic / worry / exuberant prediction, as they have been since shares were invented. Since geographical balance is useful in most (all?) portfolios, I suspect that ensuring a global allocation that includes the UK, EU and RoW is the most sensible approach to investing both in relation to Brexit, and in relation to all the other things down the road that we don't yet know about.
    • Heedtheadvice
    • By Heedtheadvice 12th Aug 18, 2:07 PM
    • 1,035 Posts
    • 521 Thanks
    Heedtheadvice
    • #6
    • 12th Aug 18, 2:07 PM
    • #6
    • 12th Aug 18, 2:07 PM
    I'm generally in agreement with Linton.


    The only things I would add is to highlight the uncertainty and the sentiment of market makers amd investors having a big affect in relative terms.


    The post referendum initial (and impact to date) is that the sentiment for the economy had been negative as has the cooling of it's performance so interest rates have remained historically low and the pound has fallen relative to leading currencies. That has had a big impact on capital returns. There have also been impacts not associated with Brexit.


    So my perception/guess will be that much will reflect how it all turns out. I cannot see any great benefits in the short term as there will be so much change that affects business, the economy in general and thus exchange rates and markets. Ignoring other effects these are maybe already reflected in markets so might be fairly neutral an impact.


    I belive any benefit (there must be some and might be significant) will be longer term as things are readjusted and trade partners and alliances forged. I am not positive for those prospects overall and see the economy shrinking and trade deficit increasing.


    So the pound's prospects do not look good to me either way. Economy and most business suffering apart from those with a global base. Another guess is that might affect dividends adversely but help to hold up many capital values.


    However, all that is a big 'but' - but what if my crystal ball is wrong?
    • FatherAbraham
    • By FatherAbraham 12th Aug 18, 4:22 PM
    • 914 Posts
    • 680 Thanks
    FatherAbraham
    • #7
    • 12th Aug 18, 4:22 PM
    • #7
    • 12th Aug 18, 4:22 PM
    I would like to hear some informed thoughts (particularly relating to pensions and mortgages).
    Originally posted by Oliver1191
    Britons who have worked in other EEA countries, and who will not have reached the minimum threshold to qualify for state pensions in those countries by the time the UK leaves the EU, and therefore leaves the EEA, will suffer massive losses in their personal wealth - tens of thousands of pounds each.

    This is because state-pension contribution years from work in the UK will no longer count towards meeting those thresholds, so potentially, some very valuable continental state pensions will be lost.
    • dividendhero
    • By dividendhero 12th Aug 18, 4:49 PM
    • 287 Posts
    • 301 Thanks
    dividendhero
    • #8
    • 12th Aug 18, 4:49 PM
    • #8
    • 12th Aug 18, 4:49 PM
    Britons who have worked in other EEA countries, and who will not have reached the minimum threshold to qualify for state pensions in those countries by the time the UK leaves the EU, and therefore leaves the EEA, will suffer massive losses in their personal wealth - tens of thousands of pounds each.
    Originally posted by FatherAbraham
    UK could have done itself a huge favour by remaining in the EEA, but for reasons best known to herself Maybot thinks being like Norway's not good enough for Britain. Only being cold version of Turkey is good enough
    • Thrugelmir
    • By Thrugelmir 12th Aug 18, 5:21 PM
    • 61,340 Posts
    • 54,574 Thanks
    Thrugelmir
    • #9
    • 12th Aug 18, 5:21 PM
    • #9
    • 12th Aug 18, 5:21 PM
    A fall in the economy would I guess cause interest rates to rise as gilt rates are increased by the government trying to protect the £
    Originally posted by Linton
    DMO auctions gilts. Investors determine yield they'll accept. Fortunately with low global interest rates UK gilts still offer an attractive safe haven.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
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