Boris Johnson’s Brexit is turning out to be a mixed bag for Queen Elizabeth – both emotionally and financially.
While the markets of a negative impact from the proposed Brexit deal, the royal bankers believe the hysteria is a bit over the top. So much so that Queen Elizabeth II’s private bank is betting millions against the market skepticism around the Brexit, as reported by Bloomberg.
The Queen’s bank, Coutts & Co., is putting money from the royalty’s American stock holdings to a fund that stands to gain should the pound rally with Brexit. The bet backs the PM Boris Johnson-led Labour Government of the UK to defy the pessimism in the markets and land a fruitful new trade partnership with the EU.
The company is responsible for majority of USD 350 million pushed out of LSE-listed Lyxor S&P 500 ETF which was re-invested into a “sterling-hedged version of the same fund”, during the last week. The Queen’s investment is expected to gain if pound jumps back up against the dollar once Brexit happens. The pound, on course for the worst month since 2016 October, recently experienced a 4.6 percent dip in September.
Market Skepticism overestimated?
Alan Higgins, the Chief Investment Officer at Coutts & Co claims that the “pessimism over the U.K. is overdone,” he explained, “Based on game theory, (we think) there’s a deal to be done.” He opines that the deal will surprise markets, resulting in huge gains for pound sterling.
But while the Royal Bankers see the pessimism as overplayed, Boris Johnson’s chaotic Brexit isn’t being helped by the dipping domestic UK markets. On the other hand, EU is holding firm in its resolve to make Johnson rethink parts of the exit deal.
Queen’s Brexit Troubles
Just last week, it was reported by Express UK, that Queen Elizabeth II would incur a loss running into millions when EU agricultural subsidies stop helping out her farms, including her 20,000 acre Sandringham Estate which has reportedly pocketed more that $3 million from the subsidy.
Watch: Royals to lose millions in agricultural subsidies after Brexit
Nevertheless, the queen is also in a precarious position with respect to PM Boris Johnson and pro-Brexit British population. Johnson’s Brexit approach is hurting the UK. However, the Queen is reportedly reluctant to replace the Prime Minister, who is technically her appointee. The Queen would wary of facing the ire of Brexiteers, most of whom back Johnson, in such a situation.
Nevertheless, the Queen’s private bank would be hoping the prediction of a bright future for the pound post Johnson’s Brexit would bring handsome returns on the investment.