View more on these topics

Benson Hersch: Brexit is not the real issue

Benson Hersch ASTL

Much has been written about Brexit and the threats – real or supposed – that it poses.   My view is that there are issues in the UK economy which give cause for concern; many predate Brexit, but possibly are exacerbated by it.

Anecdotal evidence from ASTL members seems to indicate that, for most, it’s business as usual; backed up by sparkling Q2 results, with completions 19 per cent higher than Q2 2015.

Recent Bank of England figures, showed a small decrease in activity in July compared to a year ago, but latest Nationwide figures on house prices showed a 0.6 per cent rise in the average house price, hardly signs of an impending disaster. True, mortgage approvals have fallen, but this is as much a sign of mainstream lender caution than anything else.

What worries me is the current economic situation is being assisted by an explosion of personal debt.   According to The Money Charity, card purchases in May 2016 totalled £1.57bn.   People in the UK owed £1.484 trillion at the end of June 2016, up an extra £777.90 per UK adult from the end of June 2015.   Not only that, but current low interest rates discourage savings and encourage spending and taking on yet more debt. Brexit is not the real issue – the level of debt is.

Levels of debt in many countries are so high that some pundits are suggesting governments may in future abolish paper money. There are already moves to end the 100 euro note. In this case, everyone will only have plastic and their accounts can be raided with impunity.   I don’t think it will come to that, but something has to give – we can’t go on spending our way out of trouble.

Nevertheless, the future of the UK economy seems brighter than some predicted, and we should look forward with confidence, rather than fear.   As Winnie-the-Poo, that renowned philosopher said, “You can’t stay in your corner of the forest waiting for others to come to you. You have to go to them sometimes.”


Brokers question benefit of BoE rate cut to borrowers

Brokers have questioned the benefit of the Bank of England base rate cut to borrowers as new data confirms many lenders raised their rates just before the cut, while fewer than half have passed on the reduction to SVR customers. Last week Moneyfacts said that several lenders raised their rates ahead of the 4 August […]


Innovators must ensure whole market benefits

Those at the cutting edge of modernisation must ensure their approach delivers benefits to the industry as a whole Financial services is a sector in which firms are always looking to push boundaries in order to maximise the available opportunities, generate business and ultimately boost revenue streams. The most successful of these are ones which […]

Europe: why persist with value today?

By Rob Burnett, Neptune’s Head of European Equities The Neptune European Opportunities Fund remains committed to a value bias. We see a broadening array of opportunities in diversified industries at compelling valuations today. The most complicated part of the market is the European banks. We are currently overweight in this sub-sector as many banks are […]

Champion the small-scale developer

Traditional development finance must price in project and liquidity risk, but if your project is completed and you have begun selling units you could be eligible for cheaper funding, writes Matthew Tooth of Lendinvest. A product which prices purely for liquidity risk is one way to help developers lower their costs. This type of product allows […]


News and expert analysis straight to your inbox

Sign up