Brexit- The UK Market 1 Year on
In the midst of market uncertainty after the announcement of Brexit a year ago, many UK based investors rushed to buy shares on the forex market.
Let’s take a look at how this investment worked out over the year…
UK Stocks Since Brexit — The Facts
This chart shows the price data for the 12 most impacted UK markets over the first 12 months since Brexit was announced…
Looking at the performance of the pound ($GBP) for companies earning sterling over the last 12 months, it is down 14.3% against the dollar ($USD) and 13.2% against the euro ($EUR).
As a result of the fall in sterling ($GBP) the main FTSE 100 index has risen 17% over the past year. In dollar ($USD) terms, the British stock market has underperformed in every developed index in the world.
The worst performers, Telecoms and Utilities, are both focused on the British economy. Companies which generally have a higher level of investment from abroad such as Materials and IT, on the other hand, have been the best performers.
UK Assets since Brexit — The Facts
This chart shows key price data .CO.,over the first 12 months since Brexit was announced…
Gilts are issued by the British government and are usually seen as low-risk investments. Since the Brexit announcement, they have dropped by over a quarter.
When interest rates are expected to lower, Gilt prices tend to rise. Market uncertainty caused by the Brexit announcement has not impacted on the price of the Gilt market as some may have expected.
The rise, seen in April, was the the highest since October, this came after Theresa May announced a snap election and created another wave of market uncertainty. This has since lowered.
The pound ($GBP) dropped after the Brexit vote and has since stayed around 15% lower compared to the dollar ($USD) and 12% lower compared to the euro ($EUR).
The snap election announcement caused the pound to rise: soaring to its 6 month high since Brexit was announced. The pound since the election has stayed stable, however, there is still a long way to go before the pound recovers to its pre-general election level against both $USD and $EUR.
The FTSE 100 after the snap election announcement, experienced its worst day since the Brexit vote, with £46bn wiped off its British companies. This has since seen a recovery.
It’s safe to say that in the year since Brexit was announced the UK economy has been affected, however maybe not in the way that many expected.
With Theresa May’s recent deal with DUP to prop up her minority government and Brexit negotiations starting, we expect to much more market uncertainty to come..
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Author- Becki Leighton from Trading.co.uk