Sterling ‘flash crash’: Who holds UK assets?

LONDON:

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