UK election looms: Boris Johnson and Jeremy Corbyn BOTH pose serious threats to the economy

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06 Sep, 2019

UK election looms: Boris Johnson and Jeremy Corbyn BOTH pose serious threats to the economy

A UK election is almost certainly on the horizon - and domestic and global investors should revise their portfolios accordingly, warns the boss of one of the world’s largest independent financial advisory organisations.

The warning from Nigel Green, founder and chief executive of deVere Group, which has $12bn under advisement, comes as the government announces that a fresh vote on an early election has been scheduled for Monday just before Parliament is due to be suspended from next week until 14 October.

Mr Green affirms: “With the UK’s Brexit–driven political crisis escalating, it’s almost certain that there will be a general election in order to try and end the deadlock. The only question is whether it will take place before or after the Brexit deadline day of 31 October.

“When it happens, it will be an election that gives voters the stark choice between Johnson’s no-deal Brexit, which would likely negatively impact the UK economy for several years, or Jeremy Corbyn’s Labour party, which promises an agenda of anti-business, high-tax, low-profit policies.

“Depressingly those are the options facing the British electorate in a time of national crisis.”

He continues: “Against the somewhat bleak outlook, UK domestic investors and global investors with exposure to UK assets should revise their portfolios accordingly.

“They should remain invested and ensure their portfolios are truly diversified across asset classes, sectors and regions.”

Mr Green goes on to say: “It’s clear no-deal is deeply unpopular in parliament.  As such, Mr Johnson needs to stop wasting time, stop his bully boy tactics, and start with real diplomacy to get negotiations reopened. 

“Despite, in effect, losing one card, the PM still has a ‘strong hand’ in fact it could be getting stronger – not due to his strategy, but because Germany is on the brink of recession and they are Europe’s powerhouse economy. The last thing they need is a no-deal and be unable to trade effectively as they do now with the UK, especially as the wider EU and global economies are slowing.”

The deVere CEO concludes: “An election in itself will create further uncertainty for the UK economy and the pound – and whoever wins, Mr Johnson or Mr Corbyn, the drama will be far from over for differing reasons.

“Geopolitical factors of this magnitude impact investor returns and steps should be taken to mitigate risks and take advantage of the opportunities when they are presented.’