The British economy has been hit by a boom of buying in the aftermath of Brexit. Despite being surrounded by a miasma of uncertainty and risk, London’s FTSE 100 has since managed to rebound from the losses caused by the vote to leave the European Union.
Many on the side of remaining in the EU forewarned that a vote to leave would trigger a recession comparable to the 2008 financial crisis. The fear fabricated by the Stronger In campaign generated a self-fulfilling prophecy; upon the certainty of a leave vote, financial markets plummeted.
Despite this, confidence is now seen to be booming in the British economy. The FTSE 100 has closed at above pre-Brexit levels; meanwhile, The FTSE 250 has continued to climb having closed 3.2% higher.
The shocking recovery has taken many by surprise. Market experts believe that the speedy recovery was helped by both low priced bargains and by assurances in the strength of the British economy coming from both The Bank of England and Chancellor of the Exchequer, George Osborne.
Aside from this, the pound has risen in value by 1.3%, strengthening it against both the dollar and the euro. Some still cast doubt upon the strength of the pound, believing that at such low levels the British economy is still unstable. However, an argument has been made that the lower pound is essential in creating demand for exports, eventually paving the way further economic success.
Further signs of danger come from Blue-chip firms such as Vodaphone warning of the possibility of moving from the UK, potentially taking millions of jobs with it. Other large firms have instead opted to stamp out rumours that they are set to leave the UK after Brexit. Both Goldman Sachs and Morgan Stanley denied plans of a move to Frankfurt.
Of course an economy is fickle. Investors are still being warned about the volatility of the market place. Many are nervous about a new Prime Minister and any economic policy change that could bring while others are still concerned about Britain’s chances once article 50 is triggered.
Many government front benchers are continuing to secure investment in the UK despite this uncertainty. Business Secretary Sajid Javid has maintained that ‘Britain is open for business’, sealing a £1.3bn investment from Chinese firm Huawei.
Martin Gilbert, CEO of Aberdeen Asset Management has advised investors to ‘keep calm and carry on’. CMC Markets analyst, Michael Hewson, has also argued that ‘markets are going to have plenty of time to settle’.
All of this bodes well for post-Brexit Britain. Against the turmoil created by Project Fear it seems the markets have fought back. Bargain prices and a solid economic foundation have created huge demand, pushing Britain away from meltdown; from what was believed to be the worst economic debacle since the 2008 financial crisis.