At our recent Brexited.London seminar, Henk Potts, Director of Global Investment Strategy for Barclays Private Bank gave us his insights on the current and post-Brexit developments on the UK and global markets.
Here are some of the key points Henk covered in his presentation:
- Helped by low levels of unemployment and consistent pay growth, the UK economy is faring better than predicted by economists in the aftermath of the Brexit vote.
- There has, however, been a marked weakness in the economy in recent quarters due to the ongoing uncertainty for businesses in relation to trade and immigration.
- It is unclear what trade barriers will be erected and how regulations with diverge between the UK and the EU. Employers are concerned about both a shrinking talent pool for top jobs and reduced volume of employees for other work.
- Uncertainty is affecting households who are adopting a more cautious approach to debt than we have seen in the past 10 years.
- Many businesses have reacted by shortening their horizons on investment plans. Increasingly businesses are founding their strategies on two-to-five year investments, rather than committing to a five-to-ten year timespan. However, the chance of equity returns outperforming the cash market increases the longer participants remain in the market. For this reason investing in private companies may become more attractive to long term investors.
Collyer Bristow frequently acts for Private Equity investors and companies that are looking for investment, and we specialise in the buying and selling of private companies valued in the £1m to £50m range, as recognised by our Legal 500 ranking. If you would like to find out more about our services please contact Ragavan Arunachalam.