Prime Minister Theresa May announced she will be resigning from her post on 7 June and, according to deVere Group CEO Nigel Green, the pound and UK-based assets “could be expected to decrease in value” as a result.
Theresa May’s departure demands that UK and international investors move to mitigate risks to their wealth, affirms Green, noting that: “The pound – the main market bellwether since the UK voted to leave the EU - rallied immediately against the euro and dollar, before giving up its gains, following Theresa May’s not so shock resignation as Prime Minister.”
The financial advisory firm’s CEO added that the search for a new Prime Minister is now on and this “is likely” to bring further political and economic uncertainty for the future of the UK.
“Uncertainty, typically, causes dips in confidence in the market, meaning that the pound and UK-based assets could be expected to decrease in value as a result,” he said.
Green believes that investors will be watching the Conservative party leadership contest “keenly”. He added: “The fate of the value of the pound and UK financial assets will be shaped by Mrs May’s successor.”
According to Green, the next Prime Minister is likely to be an ardent Brexiter, such as Boris Johnson or Dominic Raab, who may push for a no-deal Brexit which, in turn, would cause more downward pressure for the pound and other assets.
“With the uncertainty intensifying due to ‘Trexit’, UK and international investors in UK assets should mitigate risks to their wealth by ensuring their portfolios are properly diversified geographically and by asset class and sector.
“Exposure to equities and bonds, from as many different issuers as possible will help safeguard their savings from this uncertainty and take advantage of the opportunities that will inevitably be presented,” he concluded.
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