Expats in Asia about to feel the cold winds of Brexit

Published:  26 Oct at 6 PM
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British expats in Asia may believe they’re safe from the devastating future effects of Brexit, but its tentacles are due to reach across the world as regards finance.

The Asian powerhouse cities are thousands of miles from the British Isles, but UK expats’ finances will still be hit hard by Brexit. At present, the political stance in the UK is that a ‘hard Brexit’ will be the result of the referendum, due to the government’s insistence on total control of immigration.

This will lead to no free trade and no single market for capital, services, goods or people. The impact on sterling is expected to be considerable in the long run. Asia-based investors have traditionally routed investments in Europe via the UK, and many huge Asian companies have European headquarters in Britain.

Japan has already stated its UK-based companies may decide to relocate to Europe, and are already on edge about the effect on their UK manufacturing plants. In addition, Asian private investors are already getting cold feet and reducing their exposure to assets in the UK.

British expats living in Asia have already seen a fall in their pension incomes due to the declining value of sterling, made worse by the UK’s boosting of its QE programme to minimise the immediate effects of the referendum result. In addition, the UK’s massive deficit is threatening company pension schemes, with a number expected to go under after failing to cope by modifying their terms to members.

It’s anyone’s guess how Brexit negotiations will pan out, with the resulting uncertainty a major problem. Investors and financial companies hate uncertainty, as do expats, as it inevitably affects financial strategies as well as currency in this shrinking world.
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