by Don Wernham www.simplesoultions.financial
There is only one subject up for discussion this month and that’s BREXIT.
Personally I have never seen anything so important that I am being asked to make a decision on, but nobody can give a straight answer. I suspect that is because nobody actually knows the answers.
When I have attended Investment fund groups recently they tend to be guiding away from a leave vote.
The main reason for this is uncertainty, because financial markets hate uncertainty. However, you do have some ‘heavyweights’ like Peter Hargreaves cofounder of Hargreaves Lansdown publicly campaigning for a decision to leave.
So will there be market volatility on the lead up to June 23rd? Yes, there will be. And if there is a leave vote there will be further volatility, both in the UK and in European markets. But, short term volatility comes and goes in financial markets. There is risk for the economy if we leave the EU, and that is why institutions like the Bank of England and the CBI are warning of this risk, as they should do. But to exactly what those risks will eventually look like I am not too sure that anybody really knows the answer.
I think that there is a distinct possibility of a leave vote, despite Cameron and Osborn’s (and more recently Obama’s) scare stories. I also think that when politicians only give you a scare story, it does make you go away from their own argument. I also think if Cameron thinks a leave vote would be so catastrophic for us then why would he let us vote anyway? It does not make sense.
There are other issues for ordinary people as well as financial markets and trade. There is security, control of our own borders and immigration, and of course the biggest issue of all – democracy. We have a right to get rid of bad governments and unjust laws if we so choose to vote to get rid of them. But the United Kingdom’s Parliament or Courts are no longer sovereign, supremacy resting instead with European Union & The European Court of Justice.
EU law takes priority over conflicting laws enacted by individual Member States. And at a time when governance is being handed down more locally to regions, here we are centralising it in Brussels.
I think this race is too close to call personally, despite opinion polls and bookmakers odds saying the remain camp are well in front. But just remember on June 24th if there is a vote to leave, the sun will still come up, firms will still make things and people will still want to buy things. We may just have to sell things a little further afield, that’s all.
