UK tops overseas cash inflows despite Brexit: Knight Frank

The UK tops overseas inflow of overseas deposits by ‘some margin’, according to the updated six months statistics within Knight Frank’s wide-ranging wealth report.

The level of deposits held overseas around the world is increasing, according to the mid-year update of Knight Frank’s Wealth Report. The total level of cross-border deposits reported at December 2017 was $6.4trn, $632bn higher than was reported in December 2016.

And despite the rise in political uncertainty and unknowns surrounding Brexit,the level of deposits into the UK were reported to rise to $1.8 trillion in December 2017, which is a currency-adjusted annual net inflow of $239bn.

Using data collected by the Bank for International Settlements (BIS), Knight Frank holds what it calls ‘a unique overview’ of money flows, with the introduction of the Common Reporting Standard (CRS) and, more broadly, the global drive towards greater transparency influencing their timing and direction.

The second most popular destination was France, with an annual adjusted net inflow of $89bn. This influx could be partly attributed to the popularity of Macron’s government at the end of 2017, restoring faith in the French economy, the report said. Taiwan maintained its position, coming in third with an annual net inflow of $12bn, a fact that can be attributed at least in part to its being outside the remit of the CRS.

US outflows
The country that saw the largest increase of deposits held outside its borders was the US. Over the course of 2017, it was the largest origin for deposit outflows, depositing an additional $220bn across the reporting locations. The most popular destinations for these funds were the UK, France and Canada. Hong Kong was also a significant source of funds, adding $40bn to the deposits held in other reporting locations over 2017, the biggest recipients being the UK, Macau and the US.

Other headlines from the report include: UK sees largest inflow of non-bank deposits globally in 2017; Singapore experiences resurgent price growth, art remains top of the Knight Frank Luxury Investment Index with 25% growth and a shift in global trade, infrastructure investment and rise of ecommerce increases investor appetite for South-East Asia logistics.

Asia super-rich set to trump US
Of the word’s ultra-wealthy Asia is set to overtake North America in number of demi-billionaires very soon for the first time, according to the report. Analysis of the population of global demi-billionaires as well as the latest results from Knight Frank’s Luxury Investment Index, which provides an overview into the spending tends of the super wealthy across the globe, has highlighted a shift to the east over the west.

The report also provides an up-to-date view on the movement of luxury residential property prices in 20 of the world’s key cities and for the first time, it explores the demand for international accommodation in London.

One such, example is that parents looking to place their children at private schools in the UK’s capital has led to £2bn of investment in the last six months.

ABOUT THE AUTHOR
Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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