A lot of people already feel the Brexit backlash. The vote to leave the European Union affects the UK in a very significant way. The area of finance suffers significantly and many fear it’s just the beginning.
Leaving with lighter wallets
Credit Suisse reports show that the wealth of UK households dramatically decreased because of the Brexit backlash. The report said that UK households are now $1.3 trillion poorer than before. Thanks to the declining value of the pound, which has decreased by 15 percent since the Brexit vote.
The $1.5 trillion decrease happened in just a span of 12 months. This also means that there is a 10 percent decrease in the wealth of UK households. Credit Suisse said that this wealth includes financial investments and real assets, such as houses. Debts are not included in the computation.
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“The outlook is very uncertain, both for the economy and household wealth,” Credit Suisse said referring to the UK.
There are reports that Britain will start negotiations with the EU next year. However, there is no clarity yet, what strategy the government will use with the uncertainty comes the likelihood that the Brexit backlash will prevent the UK from accessing the EU trade bloc.
It’s getting worse
Compared to other nations, only Russia, Argentina, Ukraine, Mexico, and Egypt suffered a bigger loss than the UK. On the other hand, Colombia and Turkey performed much better.
Credit Suisse further reported that UK household wealth only increased by 1.4 percent last year based on global standards. The increase was not really good news since it was roughly in line with the population growth.
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In terms of economic growth, Asia-Pacific was the big winner with a 6.5 percent wealth increase per adult. Using the same measurement, Europe, Africa, and South America also suffered a big loss.
The report also added that 50 percent of the global population shares one percent of the global wealth. Meanwhile, 89 percent of the global wealth is in the hands of the 10 percent.
Photo Courtesy: Petr Kratochvil/Public Domain Pictures