Since the Brexit vote in June the UK is approximately $1.5 trillion poorer in US dollar terms, according to a Credit Suisse study examining global wealth trends.
The Credit Suisse Global Wealth Report 2016 revealed that household wealth dropped by $1.5 trillion in the UK, as a “direct consequence of the Brexit vote”.
The pound sterling has fallen in value against the US dollar by 20% since the vote on 23 June.
The report noted that, as of the end of June, wealth per adult in pounds was 6% above its level in 2015. However, “the outlook is very uncertain, both for the economy and household wealth.”
#UK leads the losers category with household wealth falling by USD 1.5tn as a direct consequence of #Brexit: https://t.co/bXJmhNSxA5 #CSgwr pic.twitter.com/9VIU1RaXwJ
— Credit Suisse (@CreditSuisse) November 22, 2016
Chief investment officer of international wealth management at Credit Suisse, Michael O’Sullivan, said: “The impact of the Brexit vote is widely thought of in terms of GDP (gross domestic product) but the impact on household wealth bears watching.
“Since the Brexit vote, UK household wealth has fallen by $1.5tn.
“Wealth per adult has already dropped by $33,000 to $289,000 since the end of June.
“In fact, in US dollar terms, 406,000 people in the UK are no longer millionaires.”
Despite taking a hit because of the Brexit vote, the UK is still a relatively wealthy country. A little more than half of the adult population has wealth exceeding $100,000 and 2.2 million people in the UK are US dollar millionaires, accounting for 6.8% of all millionaires in the world.
Wealth could fall further
Michael O’Sullivan was quoted by The Financial Times as saying: “[The number] is slightly flattered by the fact that the bond market rallied and equities were just off a little bit – and it doesn’t yet capture the property market.
“It could be potentially larger in dollar terms. Looking to the future, you could say the gilt market is back to where it was pre-Brexit and that the property market is starting to come off.
“If the economy doesn’t recover, wealth could fall further.”