Should we care about Brexit in New Zealand?
There has been much gnashing of teeth and wringing of hands after 52% of Briton's voted to exit the European Economic Union (Brexit). Few of the commentators, and "experts" correctly forecast the result, we certainly didn't, we were going with the bookies! The result will have cost the bookies a lot of money.
One thing is for sure, it has focussed the worlds attention on the "power of the people" in a democracy. Like it or not the majority of Britons (but not Scottish, or Londoners) have voted that Britain should exit the EU. It has shaken up THE ESTABLISHMENT and surely those in power might start paying more attention to how the majority of people are thinking and feeling, not just those that agree with them. And that is a very good thing. We've gathered a few interesting commentaries from those who aren't generally reported in mainsteam media below.
Hamish Douglas is the boss, (CEO, CIO, Lead Investment Manager) at Magellan Asset Management in Australia. He usually makes sense and we have many clients with investments in Magellan funds which have performed very well of late. For an informed and quite interesting video viewpoint from Hamish on potential implications of Brexit and where to from here see a video he recorded here >> http://www.magellangroup.com.au/videos/?videoID=5000773964001. (While you are on Magellan's site why not have a look around and if you are interested in investing give us a call.)
And some more commentaries you are unlikely to have read in mainstream media.mostly from people who get paid on the results of their decisions:
Commentaries on Brexit from New Zealand
Commentaries on Brexit from Australia
Comentaries on Brexit from London
Our Thoughts on Brexit
To us here in New Zealand the immediate result is we can buy more Pounds with our Kiwi dollars than before. So a holiday in Britain is a bit cheaper, which is good. Anyone visiting from Britain can buy less than they could before. So British tourists might not spend as much, which isn't so good. But most likely the pound will return to close to previous levels over time. Hopefully before the Lions supporters get here.
It appears global interest rates might be a little higher in the short term, which might rub off on us, but the impact is likely to be very, very small. ASB has increased their floating rate mortgage rate by 0.10% since, maybe its related maybe its not, probably not.
A small percentage of New Zealand exports, about 3%, go to Britain, it might have an impact on those, but probably minimal and not until after the exit actually happens. It seems unlikely that the British will stop buying New Zealand goods because they exit the EU. As far as imports go I'd be very surprised if New Zealand decide to penalise British imports. It might cost TVNZ a little less to buy Coronation Street and other things we buy from Britain, like Aston Martin cars and Scotch Whisky.
If you have investments in Britain they have been adversely affected in the short term, the long term implications are unclear but they will be minimal, might be positive might not.
It is possible that some British ex-pats will return home now that Britain looks likely to be "freed from the tyranny of EU bureaucrats", but I doubt it will be many. And if any do they are likely to be replaced by others who don't like the decision to leave.
Many "experts" appear annoyed because they didn't pick the result, rather than the implications. Some of those who voted to exit apparently really didn't think it would happen. Others had no idea what they were voting for, or against, or what the implications might be. But that's fair enough, nobody does!
Stay or exit it's still going to be a group of bureaucrats running Britain, like every other country not run by a Dictator. Perhaps elected bureaucrat living in your country are better than unelected bureaucrats living in another country, who really knows. Perhaps someone from Ireland, Scotland or Wales could tell you. The best and worst thing about democracy is you get what the majority vote for, depending on how you voted. Or is it? Or do you?
To sum it up- "Keep Calm and Carry On"
- Last updated on .