Alfred Lettner - "Brexit" Has Caused Deep Shock to Global Economy

Britain has suffered a “deep” shock to the economy from the Brexit vote, a senior member of Alfred Lettner, the family-owned financial advisory firm in Austria, stressed today.

Perg, Austria, July 14, 2016 --( Edward Smith, a Senior Investment Manager at Alfred Lettner emphasized, following a series of recent meetings with bank managers in the U.K., that: “One of the issues that was clear to us and was certainly demonstrated in the markets is that this event indeed transpired to be a significant shock within Britain and the rest of Europe.”

He added that experience from the past showed there could be “unpredictable consequences” from fragility in the economic system.

He said the Bank of England had benefited from modelling of the potential economic risks from an Out vote and from markets trading in advance of June 23 as polls shifted to be able to assess “potential parameters” of instability.

“Those demonstrated that indeed this is and has been a profound shock to worldwide economy,” he said. “Bank shares have fallen and house-builders had been hit. You can see that much of what was articulated in the model has transpired,” he added.

David Perry, also a Senior Investment Manager at Alfred Lettner said, “The pound has dropped incredibly since the result of the referendum. Although this will boost exports in the U.K. as companies abroad will look to take advantage of this drop, it has made it much more expensive for British companies to import goods.”

“As such, we have seen a huge influx of British investors seeking safe havens until this all blows over and the situation stabilizes,” Perry explained. “Client’s inquiring about buying gold is becoming a day to day occurrence now, as is investors looking to buy U.S. Dollars and U.S. investments.”

Both, Edward Smith and David Perry, were in agreement that the new Prime Minister must act quickly to invoke Article 50 of the Lisbon Agreement and start the process of exiting Britain from the E.U.

“The longer this carries on, the more unstable the markets will become,” Smith concluded.
Alfred Lettner
Carsten Klein