DeVere CEO Green warns of potential 'BoJo' market bounce
A Boris Johnson victory in a general election would cause UK asset prices and the pound to fall, according to Nigel Green, founder and chief executive of deVere Group.
Green's warning comes following publication of a ComRes poll in the UK's Daily Telegraph that suggests that with Johnson as leader the Conservatives could be heading for a landslide at the next election with a majority of 140.
Johnson, the current frontrunner in the Conservative leadership contest, officially launched his campaign today.
"UK asset prices and sterling will certainly fall on a Boris Johnson victory at a general election as he has made it quite clear that he would be willing to pull the UK out of the European Union with no deal in place," Green said.
"Should Mr Johnson go on to win a general election, especially with a clear majority, he will be emboldened in his approach to Brexit. Mr Johnson's no-deal relies on the idea that the absence of a deal on 31st Oct will - by default - mean a no deal Brexit. And that parliament and Brussels are both powerless to stop it.
"This suggests that the parliament vote against a no-deal a few months ago is limited to banning the government from making it a policy goal, but it can't stop a no-deal through inaction.
"Untrustworthy"
Green adds that a "likely fall" in UK asset prices and the pound would not just be about Joghnson's Brexit policy. He is also viewed by many as "untrustworthy and lacking in consistency." He says that the low pound will not only be bad news for British holidaymakers and travellers abroad, but financial services, will suffer from another knock to the pound. It will be hit because it is built on foreign investment that puts its faith in a strong pound.
Financial services contribute 6.5% towards British GDP and are part of an overall services sector that forms 80% of the country's economic output.
"A Boris Johnson win at a general election - especially with a clear majority - can be expected to prompt a significant number of UK and international investors in UK assets to consider the overseas options available to them to build and safeguard their wealth," Green added.
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