Amid warnings of an economic catastrophe as a result of Brexit as the pound’s value falls, the FTSE100 has gone up by nearly 35 per cent on its pre-2016 referendum vote low, writes Bill Jamieson.
Earnest hand-wringing and cries of woe over the falling pound: what misery awaits us! The pound – which was trading at about $1.50 against the dollar before the EU referendum in June 2016 – has dropped by some 2.4 per cent since Monday to $1.2170, and against the Euro it has also fallen.
It’s certainly true that holidays abroad will be more expensive and Tenerife less of an alluring magnet than before. But there is another side to this tumbling coin.
Scotland becomes that much more an affordable destination for overseas visitors. But it is not only hotels and tourist businesses that stand to benefit.
Scotland’s major exporters – such as whisky giant Diageo and engineering giant Weir Group – will gain.
And the more that the order books of our big companies swell, the more work becomes available for domestic suppliers and companies that benefit from outsourcing. Labour-supporting economist John Mills has long advocated cheaper pound to lift the economy. And the stock market has not plunged in despair at the prospect.
The weaker pound also works to boost the value of overseas earnings by UK companies.
Thus, far from a fear-driven collapse in share prices, the FTSE100 index has climbed 14 per cent since the start of the year and is up almost 35 per cent on its pre-2016 referendum vote low.
But of course, such developments rarely feature in the daily recitations of ‘Catastrophic Brexit around the corner’. We’re all doomed, remember?