Brexit Blues
As the UK grapples with the logistics of splitting from the EU, a recent Deloitte survey shows British financial advisors have less faith in the economy than during the Great Recession of 2008.
Today, Buzzfeed News reported the findings of a survey done by accounting firm Deloitte, which interviewed 132 finance chiefs of the largest companies in Great Britain. What they found was sobering. 3 out of 4 said they felt less optimistic following the vote, fewer than 1 in 10 said now is a good time to take risks with their businesses, and a whopping 63% said they expect sales and revenues to fall next year.
The last time Deloitte conducted this same survey was in the wake of the 2008 financial meltdown, which began at Wall Street and reverberated across the world. The Great Recession, as it is termed now, resulted in 8.4 million jobs lost and trillions in 401k and savings accounts lost. The factors leading up to the financial crisis, namely big banks selling bonds (mortgage backed securities) made up of bundled subprime (bad quality or risky) mortgages at huge fees, were recently portrayed to wide acclaim in the film The Big Short. When the housing bubble burst, and millions of Americans defaulted on their mortgages, the securities that all big banks relied on lost all their value, and many banks faced collapse.
When the same British financial officers were surveyed after that meltdown, they polled more optimistic about sales, hiring trends, and new investment than they do now in the wake of uncertainty caused by Brexit. Here’s hoping that Theresa May, Britain’s first female prime minster since Margaret Thatcher, will ease the transition and cheer up the glum business climate.