It is nearly a month since the UK voted to leave the European Union on June 23. Theresa May has subsequently become Britain’s Prime Minister, replacing former leader David Cameron, who had campaigned for remain.
Markets initially reacted poorly; sterling fell to the lowest level against the dollar in 31 years and already squashed UK government bond yields fell further. However, it has not been all bad news for investors; the FTSE 100 has been in recovery mode over the past few weeks following an initial fall in the wake of the Brexit vote, climbing to an 11-month high. Despite this rally, investors remain cautious and are holding extremely high cash levels.
This is bad news for savers who have suffered from the seven years of record low interests rates in the UK. But there are cheers from anyone who wants a loan, including mortgage borrowers, as the cost of debt is poised to be lower.
Hetal Mehta, LGIM’s senior European economist said she expected the Bank of England would take a more comprehensive approach in August, saying “in the coming months interest rates will be cut by 50 basis points and further measures such as QE and credit easing will be announced.”
Given the uncertainty post Brexit, Kevin Mountford, head of banking at MoneySupermarket expected many households will be reviewing their finances.
“Rates are stingy at the moment, so it’s always worth arming yourself with information to see if you can get more for your money, because there are still some decent deals out there,” Mountford said.
We took to the streets of London to find out whether the public expected Brexit to affect their finances, and how they voted in the EU Referendum.
