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Brexit blamed for £1.2 trillion slump in household wealth

Published 22/11/2016

There are more than 400,000 fewer dollar millionaires in Britain as a result of the Brexit vote, a Credit Suisse report suggests
There are more than 400,000 fewer dollar millionaires in Britain as a result of the Brexit vote, a Credit Suisse report suggests

British households are 1.5 trillion US dollars (£1.2 trillion) poorer after the Brexit vote sent the pound tumbling, according to a report.

There are also more than 400,000 fewer dollar millionaires in the UK, with the most wealthy hit by sterling's slide and falling high-end property values.

The study by Credit Suisse found household wealth dropped by 10% in US dollar terms to 14 trillion dollars (£11.3 trillion) in the year to the end of June as a "direct consequence" of Britain's vote to quit the European Union.

It also found that since the end of June, wealth per adult in Britain has dropped by another 33,000 US dollars (£26,514).

The pound plunged by 15% in the immediate aftermath of the shock referendum decision on June 23, while the FTSE 100 Index also plunged into the red.

While the FTSE has since staged an impressive turnaround, the pound has languished at 31-year lows against the dollar.

Michael O'Sullivan, chief investment officer of international wealth management at Credit Suisse, said: "The impact of the Brexit vote is widely thought of in terms of gross domestic product, but the impact on household wealth bears watching.

"Since the Brexit vote, UK household wealth has fallen by 1.5 trillion US dollars (£1.2 trillion). Wealth per adult has already dropped by 33,000 US dollars (£26,514) to 289,000 US dollars (£232,243) since the end of June.

"In fact, in US dollar terms, 406,000 people in the UK are no longer millionaires."

But t he Credit Suisse report showed that in pound sterling terms, wealth per adult was 6% higher year-on-year as at the end of June and is a third higher than it was before the financial crisis struck.

It also found that the UK remained third for the number of ultra-rich individuals, who own more than £50 million in assets, behind the US and China.

There are 700 fewer so-called ultra-high net worth individuals in the UK at 4,700 out of 141,000 globally.

The UK's 14 trillion US dollars (£11.3 trillion) in private wealth is shared among 49 million adults.

Credit Suisse said the UK has 2.2 million dollar millionaires, representing 6.8% of all millionaires in the world.

The report found that global wealth rose by 1.4% to 256 trillion US dollars (£206 trillion), but this is down to the increase in adult population, as wealth per adult has remained flat at 52,800 US dollars (£42,430).

Sally Copley, Oxfam's head of UK policy programmes and campaigns, said the report underscored the "huge gap between rich and poor".

She said: "The wealthiest 1% of the population - who own nearly a quarter of all the country's wealth - continue to do well whilst so many people in Britain are just about managing to stay above the poverty line.

"Tomorrow's Autumn Statement presents a real opportunity for the government to show how they are going to make the economy work for everyone and not just those at the very top."

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