Vienna, Austria, September 23, 2016 --(PR.com
)-- With Britain's decision to leave the EU coming as major shock to most, analysts at Wismuller Gunter are looking for the potential benefits of the decision.
Following Brexit, markets worldwide went into meltdown, the pound sank like a stone to levels not seen since the 1980’s and investors hurried to cash and gold in case of further declines. The negotiations with the EU are expected to continue for many years and analysts at Wismuller Gunter expect sterling to be vulnerable for the near future owing to the lengthy negotiation process, a significant trade deficit and the possibility that foreign investment will fall because of trade agreements in place with the single market.
A senior analyst at Wismuller Gunter commented: “If we look back to the early nineties then we can see the potential benefits of a slump in value of the pound - After the currency was removed from the European Exchange Rate Mechanism the lower value helped manufacturing and exports thereafter. And this is what will make the next two years a crucial time for the UK economy as it negotiates its position with the EU and also negotiates new trade agreements for its future.”
The Bank of England has kept interest rates at a record low for many years and a weaker currency will surely keep interest rates down which is good news for home-owners but savings will continue to suffer. And then there is the trade deficit that the UK has struggled to balance, it is possible to take advantage of a competitive exchange rate because it makes exports cheaper and imports more expensive, something which might be enough to encourage fewer imports and provide a boost to manufacturing across the country.
There are difficult times ahead and an acrimonious split from the EU should be avoided at all cost as the UK’s deficit is propped up by large inflows of foreign capital, should those investors lose faith in the UK market then we would see the pound plummet further.
About Wismuller Gunter
Wismuller Gunter is a Global Wealth Management Specialist currently trading over $750 million in assets with operations throughout Europe and Asia. The company excels in investment banking, mergers and acquisitions, fund management and private equity. Information about Wismuller Gunter is available at www.wismullergunter.com