Your crystal ball or mine?

Having met recently with a Bank of England representative and chatted about the latest Agent’s Summary of Business Conditions, I thought I would start with a few facts: 60% of businesses surveyed reported growth, mergers and acquisitions are on the up and there is a new cushion of corporate cash.

To quote directly from the BoE’s May summary: “Credit availability has increased for small- and medium-sized enterprises. Large companies continued to report strong credit availability, with most being able to choose between a range of funding sources and providers.”

In addition, intentions for investment growth over the next 12 months have stabilised.

Well, I hope that leaves you feeling good, just as positive data from a reliable source should. Make the most of it, because you are unlikely to feel as comfortable with the “facts” being bandied around in the Brexit campaign. 

It is my guess that, come the EU referendum, most people will be casting their votes in line with their emotions and/or prejudices. It’s difficult to know what else they can do, because reliable, reasoned arguments for and against EU membership are hard to come by. Instead, we have the media obsessed with a Tory civil war and other political shenanigans, alongside pretty crude output from the “Out” campaigners. 

Out of sheer frustration, I am stepping into the debate with two simple “facts” of my own: if we stay in, nothing much will change –if we come out of the EU, we have no idea what that will mean in the short, medium or longer term and, more specifically, no idea what an exit will mean for the economy. 

None too keen on total economic uncertainty and buoyed by the likes of the BoE’s latest Agent’s Summary of Business Conditions, I will be voting in favour of EU membership. And in the event of a Brexit I certainly won’t be banking on loads of government money sloshing around to ease our landing. The £325m a week that we are told will be saved doesn’t take into account the economic benefits we gain from being an EU member or the cost of having to contribute to the EU budget to retain access to the single market. 

If that’s not enough to put you off, EuroMillions winners could also lose out. Apparently, shifting exchange rates will be “analysed closely” and this could have a direct effect on the value of EuroMillions prizes won in the UK. OK, that’s not likely to affect a lot of people, but you never know your luck.

As for the craziest thing I have heard, it would seem that some retired British citizens living in France, Italy, Spain etc are actually going to vote to come out of the EU. Passions must be running high if they are prepared to see pension incomes shrivel and pay trade tariffs on HP Sauce and that famous brand of baked beans. Not to mention riding out currency-exchange tremors that could last five years. I can see the RAF flying into Alicante to pick up the unwanted in a Hercules.

Seriously, though, for the broker community, if you want to keep stability, then re-read the beginning of this article – we have all been through the bad years and things are now on the mend. 

If you also happen to be a risk-taking, maverick poker player in your spare time and are up for a “No” vote, remember the UK doesn’t have an exit strategy in place. So put down the playing cards and consult with the tea leaves at the bottom of your cup. Or, I suppose, you could achieve a quiet mind  by learning how to read the runes.