15 Jun 2016
Germany’s largest bank has predicted British stocks will be the best performing in the continent and top UK firms will outperform EU rivals by as much as 5 per cent after a Brexit.
The forecast, from Germany’s Deutsche Bank, comes on the same day that the British Chancellor of the Exchequer George Osborne threatened tax hikes by reaffirming his catastrophic forecast for the economy, based on claims from the Institute for Fiscal Studies (IFS) – a Europhile think-tank funded by the EU and the British government.
The IFS claims to be “politically independent”, yet receives 50 per cent of its money from the UK government and 10 per cent from the European Research Council (ERC) – financed by the EU and established by the European Commission.
The BBC, meanwhile, has not yet reported the news from Deutsche Bank. Furthermore, last night BBC News cited the IFS to dismiss claims Brexit would make more money available for public services, and introduced their spokesman as “many economists”.
— East Kilbride SNP (@EK_SNP) June 14, 2016
While Europe’s fourth biggest bank and the world’s largest foreign exchange dealer might seem like a more reliable source than the IFS, many online took to Twitter to mock the bank’s claims (which featured on the front page of The Sun this morning) by highlighting yesterday’s volatility in the market.
the sun is outright lying on its front page today
— proud cat dad (@mrreptoid) June 15, 2016
This can’t be true. The front page of The Sun denies it. https://t.co/xI2bEUfDON
— Chris Addison (@mrchrisaddison) June 14, 2016
The Sun front page reads ‘Brexit rocket boost for shares’. Not sure how they’re getting that from yesterday’s FTSE bloodbath.
— Rob Davies (@ByRobDavies) June 15, 2016
Deutsche Bank’s predictions are based on the assumption that the value of sterling will continue to decline after falling by eight per cent since its November peak, making British goods cheaper abroad and driving exports.
A note from the bank stated that the UK stock market “tends to outperform during periods of GBP (pound) weakness” and claims the pound could fall by another five per cent by the end of the year.
Deutsche Bank concludes: “In the case of a Leave vote in the UK referendum (a scenario to which bookmakers’ odds attribute a 30 per cent probability), we expect UK equities to outperform the European market, given GBP downside in such a scenario as well as the market’s defensive sector structure.”
When UKIP leader Nigel Farage dismissed warnings about sterling falling after a Brexit by saying “So what?” over the weekend he was similarly mocked. There appears, however, to be sound reasoning behind his stance.
London (AFP) – A vote to leave the European Union in a referendum next week would trigger tax hikes and spending cuts, Britain’s finance minister warned Wednesday, as stock markets sank on the increasingly likely prospect of Brexit.
George Osborne, who is campaigning to remain within the 28-member bloc, announced that schools, hospitals and the army would all have their funding slashed if the pro-Brexit side prevails.
The intervention comes as polls indicate an uptick in support for the “Leave” side days ahead of the June 23 vote.
“Quitting the EU would hit investment, hurt families and harm the British economy,” he said in released remarks.
“I would have a responsibility to try to restore stability to the public finances and that would mean an emergency budget where we would have to increase taxes and cut spending.”
Osborne warned that leaving the EU would create a £30 billion hole in national finances.
In response, the basic rate of income tax would be raised, inheritance tax would be hiked, and the budget for services including the National Health Service (NHS) would be cut, he said.
Osborne’s threats to Britons who want their country back are nothing short of financial terrorism.
The Chancellor of the Exchequer George Osborne has been slammed by London’s estate agents who insist that he, not the possibility of an exit from the European Union, is to blame for the recent slump in London’s property market.
In a bid to scare British voters into backing the campaign to keep Britain within the European Union (EU), Mr. Osborne has repeatedly warned that an exit from the EU could spell disaster for British homeowners in terms of falling house prices and rising mortgages.
But London estate agency Maskells have called on him to stop making the claim. They insist that his decision as chancellor to hike stamp duty is the factor driving a slow-down in the London property market, not the possibility of Brexit.