The top donor to the campaign for the UK to leave the EU has said he has no regrets about the money he spent, despite hundreds of millions being wiped off his fortune in the aftermath of the vote.
Peter Hargreaves, who owns one third of the shares in the financial advice company that he founded called Hargreaves Lansdown, gave £3.2 million to the Leave campaign in the run up to the vote.
Shares in Hargreaves Lansdown dropped in value from 1,389p ahead of the vote to 1,056p on Monday, wiping £400 million off the market value of the company in two trading days.
The value of the shares had rebounded and were trading at 1,192p in midmorning trading on Wednesday as the FTSE 100 made some gains.
"The shares have suffered a fallout just as everything else has. Hargreaves Lansdown has fallen quite a lot," Hargreaves told the Guardian after the referendum result.
He said he still had no regrets about donating to the Leave campaign. "I didn’t do this for personal gain. I thought it would first and foremost be good for Britain," Hargreaves said.
He said the fall in sterling would be good for FTSE 100 companies whose earnings are translated into sterling. The pound was worth around $1.34 on Wednesday, down from around $1.50 just after the polling stations closed.
"It will be the biggest stimulus for British business that I’ve seen since 1992. It’s going to make them very profitable," Hargreaves said.
He compared the situation now to when the UK left the exchange rate mechanism in 1992.
6 ways Britain leaving the EU will affect you
6 ways Britain leaving the EU will affect you
1/6 More expensive foreign holidays
The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more
2/6 No immediate change in immigration status
The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay
3/6 Higher inflation
A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum
4/6 Interest rates might rise
The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output
5/6 Did somebody say recession?
Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018
6/6 And we wouldn’t even get our money back
All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget
"We rose from the ashes like a phoenix, and by 1997 had a trade surplus and a balanced budget. Why should it be any different now? Suddenly Britain’s much more competitive, even if they put tariffs up against us," Hargreaves said.
Not all companies agree that the UK's decision to leave the EU will be good for business.
Vodafone warned on Tuesday that it is reconsidering keeping its group HQ in the UK following the vote because of the importance of the single market.Reuse content