If you have any clients who deal with other countries your management accounts may show a serious drop this month. Apparently the issue is that the money markets fear a break up of the union which is putting pressure on sterling.
Initially it was assumed that Scotland would be a resounding no as all logical arguement suggests that its a silly idea. However, financial logic and political history are strange bedfellows and apparently the vote is now too close to call which is spooking the markets.
I'm expecting to see a major change just before the vote with sterling being snapped up at a bargain price in the hope that it will be a no vote and confidence returns to the market (if not then it will just be a dead cat bounce).
As an example of how things are changing one client of mine purchased the same thing three days appart from America. The stock was $1800 on both occassions.
On Saturday that cost him £1103. Today it cost him £1110. Now, that may not seem a lot but in a competitive market that has still not properly recovered thats £7 coming straight off an already pressured profit as it can't be passed on to the end consumer.
Whilst 0.6% change may not seem a lot thats 0.6% in three trading days which if its seen as a trend line will escalate.
To be honest, until I saw the issue starting to make a difference to client profits I hadn't really given devolution a great deal of thought but now its starting to concern me that Scotlands vote is seriously damaging the UK economy as a whole (including their own).
Sure that many will not be interested in most of the above but what you should be prepared for is to explain to your clients why sales are increasing (our goods are cheaper to everyone else in the world) and profit percentage decreasing (Raw materials are costing more).
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I heard that the last poll (which has given rise to the closer call) was worded in such a way to make it look like there would be more 'Yes' votes (haven't seen the questions so can't personally comment) and that a new poll coming out is looking more like the old ones so sterling may rally again.
I've got XE on a constant refresh at the moment. After I posted above it continued to slide down to £1112 before rallying back to £1110 which I'm hoping will at least hold before further rallies.
It seems obvious to me now that the money markets are keeping an eye on the Morris & Hopson market predictions to see which way they should be going.... I'm feeling that we should be getting a city level bonus for our insight don't you?
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I'm keeping an eye on the BBC's poll tracker where you can select one of several pollsters from a drop down list.
One of my friends on FB is a keen YES campaigner and I've pulled her up on one or two points such as Scotland walking away from it's share of UK debt & the SNP claim that they may keep Sterling under any circumstances.
On the latter it seems to me there is an obvious parallel with Europe : UK politicians debated for 25+ years whether to join monetary arrangements where there is no political union.
