Ster­ling ‘flash crash’: Who holds UK as­sets?

Kuwait Times - - BUSI­NESS -


A 10 per­cent “flash crash” in ster­ling yesterday was the lat­est sign of how far Bri­tain’s im­pend­ing exit from the Euro­pean Union has rat­tled fi­nan­cial mar­kets, with the UK’s cur­rency, stocks and gov­ern­ment bonds all fall­ing for a sec­ond straight day.

With a cur­rent ac­count deficit of nearly 6 per­cent of eco­nomic out­put, Bri­tain is highly reliant on for­eign in­vest­ment. Here is a closer look at over­seas hold­ings of its main fi­nan­cial as­sets: Around 5 per­cent of the world’s known cen­tral bank for­eign cur­rency re­serves are in Bri­tish pounds, the equiv­a­lent of more than $350 bil­lion, ac­cord­ing to the In­ter­na­tional Monetary Fund.

That is the third largest hold­ing, be­hind US dol­lars (63 per­cent) and eu­ros (20 per­cent).

* More than half of UK stocks are held by over­seas in­vestors, ac­cord­ing to Bri­tain’s Of­fice for National Statis­tics (ONS). For­eign hold­ings were less than 10 per­cent in the 1970s and 1980s, and stood at around 35 per­cent at the turn of the cen­tury.

* Nearly a third of in­vestors in Bri­tish gov­ern­ment bonds are from out­side the coun­try, ONS data shows. That equated to 500 bil­lion pounds’ worth at the end of June. — Reuters

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