- Title: UK wealth falls $1.5 trillion after Brexit FX moves: Credit Suisse
- Date: 22nd November 2016
- Summary: LONDON, ENGLAND, UK (FILE) (REUTERS) ROLLS ROYCE DRIVING OFF IN LONDON TRAFFIC
- Embargoed: 7th December 2016 15:55
- Keywords: Wealth UK money Sterling US dollar Credit Suisse China
- Location: LONDON, ENGLAND, UK + UNKNOWN LOCATION
- City: LONDON, ENGLAND, UK + UNKNOWN LOCATION
- Country: United Kingdom
- Topics: Economic Events
- Reuters ID: LVA00559J0FBH
- Aspect Ratio: 16:9
- Story Text:Britain is $1.5 trillion poorer in dollar terms due to the fall in the pound since the vote to leave the European Union, a Credit Suisse study on global wealth found.
Since the referendum on June 23, the pound has weakened by around 16 percent against the dollar, meaning UK wealth is sharply lower expressed in dollar.
"They look at the value of real assets, the value of things like stock markets and they rebase those price changes back into US dollar terms. I think that's the key that this is really based around the change we've seen in the Sterling exchange rate versus the US dollar since the Brexit referendum. It doesn't necessarily reflect the true change in wealth within the UK. If you put it basically into Sterling terms, it's much rosier looking, most of those losses are notional i.e. unrealised - you don't take a loss on a property, for instance, until you sell it. And what we're talking about is not so much a loss as a reduction in value," said Independent Analyst, Darren Sinden.
The Credit Suisse study also predicted that around 945 billionaires will be minted around the world in the next five years, bringing their number to nearly 3,000.
"Perhaps the rate in growth in the number of billionaires is slightly surprising because it wasn't that long ago that we were reading headlines that their numbers were dwindling. The fact that a large number of these new businesses come from China, well that's no surprise, it's the powerhouse economy of the world, it's the one place where significant economic growth is still possible and value creation can happen quite quickly," added Sinden.
China's population of millionaires is also expected to rise by more than 70 percent between 2016 and 2021 to just under 2,800.
Many banks, including Zurich-based Credit Suisse, are banking on continued growth in Chinese wealth to help pick up the slack from European markets.
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