Boris backing Brexit: What do businesses really think?

We asked senior businesspeople what they thought of Boris Johnson coming out in support of a Brexit

Yesterday Boris Johnson came out in support of the Leave campaign, despite his own father calling it a “career-ending move”.

But what do leading businesspeople think? We asked them.

“Stay campaign should be scared silly

Frances Dickens, CEO and co-founder of media barter specialists Astus Group: “I’ve always found it hard to take BoJo seriously as a politician - until now.

“Backing Brexit is the biggest political gamble of his career: he has clearly decided his chances of being PM are increased by supporting the Leave campaign. His Telegraph column eloquently voices Tory grassroots’ frustrations with Europe, while cheekily trying to align Churchill to Brexit. Add to this his massive public appeal and the Stay campaign should be scared silly. Will his other gamble - that the EU will listen if the UK votes to leave - pay off? I hope so because there is a lot more at stake here than Boris’ political ambitions.”

“Fantastical delusion

Fin-tech entrepreneur Rajesh Agrawal, founder and CEO of RationalFX and advisor to mayoral hopeful Sadiq Khan said: “In opting to support the campaign to leave the EU, Boris has clearly put his own ambitions before the national interest and that of the city he represents.

“Leaving the EU would bring considerable risk and uncertainty for British business and would put London’s position as the world’s top-ranking financial centre at risk.

“The free movement of goods and services across the EU and the unbridled access to 500 million potential customers it brings is crucial to the growth of businesses large and small. Outside the EU, British firms would face years of turmoil while market access and existing trade deals are re-negotiated. This will mean slower growth, less investment and fewer jobs.

“The suggestion that British businesses will not suffer if Britain follows Boris’s path to exit is a fantastical delusion worthy of only our most eccentric politicians.”

Increase in support for Brexit

Sanjiv Shah, chief investment officer at wealth management firm Sun Global Investments, said: “Boris Johnson’s announcement that he is going to campaign on behalf of the Brexit campaign has triggered a 1.2% drop in the value of the Pound against the Euro, prompting concerns that it will continue to weaken as doubt over the outcome of the referendum increases.

“We believe that, as the debate unfolds, there could a material increase in support for Brexit, which will add further pressure to the pound, stock and gilt prices.

“The final result maybe close depending on how the debate progresses. At any rate, we are in for some interesting times.”

“Clouds of uncertainty”

Richard de Meo, managing director of foreign exchange company Foenix Partners, said currency markets are not keen on the uncertainty of a Brexit.

He said: “Ever since the EU referendum was first discussed, the fair assumption has been that uncertainty relating to a possible exit has weighed on sterling, yet there was no single event from which to gauge the level of market sensitivity. Even in recent weeks as the issue has garnered increased coverage, other financial market and economic headwinds also justified sterling weakness.

“In my view, this changed on Friday as the spotlight on David Cameron seemingly finalising successful re-negotiation of Britain’s EU membership saw the pound gain over 1% throughout the afternoon with no other explanations. Cue Monday morning, the announcement of a 23rd June date and Boris-inspired headlines; as a direct response the pound is left nursing 2.4% losses (off Friday’s highs against the dollar), and this after just a morning trading session. There can be no lingering doubt about sterling’s vulnerability to how the coming months will play out.

“Setting aside the vagaries of political jostling, two clouds of uncertainty had been festering. The first relates to the timing of the referendum – now resolved. The second, more important issue relates to the outcome, but this will not be resolved until late June. As a result, this sudden bout of uncertainty should be reversed in part by upcoming Cameron statements and we expect sterling to show some resilience before months of opinion-filled coverage and fluctuating polls.”

“Prospect of Brexit will hit investor morale”

Nikolas Xenofontos, head of risk at easyMarkets, a global financial trading company based in Limassol, Cyprus, said: “How will Britain disengage from the EU? Which model will it adopt? How will Brexit impact business and how would foreign direct investment be affected? These important questions will be top of mind for investors leading up to the Brexit vote.”

He added: “While both sides of the Brexit debate have legitimate concerns, it’s difficult to ignore the backlash of a Leave vote. We’ve seen what uncertainty can do to investor morale. Be prepared to multiply that tenfold in the case of Brexit.”

 

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