For sellers

Interview with 'Today', Brexit reality: now where?

24 June 16
image: Bloomberg TV

*Text below translated from Bulgarian*                      

How did the UK wake up after the referendum?

In shock. I think even for those who voted to leave many are surprised that Brexit has actually happened and the Prime Minister has actually resigned. Anti-establishment and protest voters are probably this morning wondering if they were amongst the 1.3 million voters who made the difference between leave and remain.  No doubt some of them would now vote the other way if they knew the real choice between certainty and uncertainty was actually in their hands. Although a true representation of democracy, it is shocking for everyone to not know what exactly the future holds.


How have the markets reacted?

Markets have been in turmoil since the first reports in the early hours of this morning. After rallying earlier this week the Pound has lost considerable value against the Euro and it is now at its lowest against the Dollar since 1985. Major property developers have seen up to 20% of their value disappear this morning. My colleagues in hedge funds, investment banks and the oil and gas sector throughout the city of London are telling me there is widespread panic with analysts facing unanswerable questions. Literally offices of people gathered around television screens pondering what to tell their clients. Sitting tight and not placing new trades looks to be the order of the day, but it is anyone’s guess if fear and escalation over the coming week will trigger firesales.


What is going to happen with UK now. What can we expect?

A period of 2-4 years of instability and uncertainty is now most likely. During this time only the law makers will profit from Brexit as they rush to replace Brussels’ legislation with revised, new and purely domestic legal frameworks.


How has the commerical property market reacted?

Banks with headquarters in the UK are likely to consider moving to other EU capitals where trade laws are established and clearly identified. The risk of staying and becoming subjected to laws that might be prohibitive or unknown for the foreseeable future, is simply an unnecessary risk. Commercial property speculators have today estimated an 18% falling in commercial property rental values over the coming 2 years as a result. Not good news for financial sector employees and property owners alike.


What about travel, are you worried that you can't move freely?

Its highly unlikely travel restrictions will apply for individuals, it would be unimaginable for Britons to have to apply for visas to visit France, or even Bulgaria, but the question is now reality and the British government will have to decide how to control their borders without instruction from Brussels.


For richer or poorer will be the UK, what is the future of the European union?

The UK has a long established history of making bold moves first: we industrialised first, we deindustrialised first and as a result the sun never set on the world’s largest empire. Maybe this is another such chapter of British history in the making, possibly fifteen years from now today will be looking back upon as the day the British redefined Europe, again, for the better and for everyone. But even if it is, it is hard to image how leaving the helm of a troubled EU could really be the best move for UK growth under modern economics, especially so soon after a global recession and when Russia awaits signs of weakness from the west as a whole. Today we have played right into Mr Putin’s hands.


Who do you hold responible for today's decision?

The defiant imperial decisions of our past were made by a ruthless and ambitious elite, today’s decision was made by a slim majority of the British public. Looking at the geography of where the majority of ‘leave voters‘ were located, we can clearly see that they were largely not in high income tax generating areas, perhaps more patriotic votes than economic. My gut feeling is that this has been a considerable error, far better to stay aboard and steer a troubled EU ship than simply abandon it.


Do your foresee more change within the EU?

It is unlikely the European change will stop with the UK, it is far more likely that this has triggered a new political era. Brussels was adamant that it would not reform according to David Cameron’s wishes earlier in 2016, yet the reform that will be necessary to keep the EU together now will only be more drastic. Europeans have today seen that unbelievable change is possible, the nationalists and the right wingers have all just been gifted a far louder voice.

If Brexit has fractured the EU then other disgruntled countries will soon motion toward voting on their membership, in which case the UK will not be the last to leave the party before this new music has stopped. In any case, the coming years can only be more difficult, less certain and very likely more expensive for both the British people and all other EU citizens.