brexit summary
Adam Potts has bravely (and from a non-political standpoint) attempted to summarise Brexit and give an us idea of its effects on the bloodstock world. We hope his piece will provide you with a helpful overview and a timeline for Brexit, but as the politics surrounding the UK’s departure from Europe are changing rapidly and the whole process so muddled, Adam’s article could well be superseded by events by the time you read it...
Brexit and bloodstock J
ust before day two of the Tattersalls Ireland Derby Sale in 2016, Britain voted 52-48 to leave the European Union. Store horses purchased on day one were suddenly a whole lot more expensive for British buyers, given that the pound was to fall over 10 per cent against the dollar and over seven per cent against the euro later that day — its biggest one-day loss in history. In total, £120 billion was wiped off the FTSE 100, its biggest one-day loss since the financial crisis the decade previously. Mr Market gave the Leave vote a big thumbs down. That being said, there was a certain amount of sympathy with a Leave voter’s desire to disentangle themselves from rulers too distant in the power hierarchy to adequately serve them at a local level. As is the case with any organisation, when it becomes too big, it becomes harder to have an affinity with it — causing rise for a “back to the nation” standpoint. In fact, one could argue that the EU is not even operating as a union, but as several different alliances. We’re seeing that the EU being “too big to fail” is not so, and it may be at a scale so big that it is bound to fail. But, given that Britain is in a period of stagnating real wage growth (wage growth adjusted for inflation — a general increase in
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...as the cabinet currently debates the Brexit plan, google searches for Love Island are currently ten times higher than that for Brexit
prices), the weakest of any G7 nation over the past decade, the timing of such a drastic move is open to doubt. The vote was of such high importance because it was a fundamental change to the constitutional arrangements of Britain. Yet, if a country is to be judged by its google searches, it seems many British voters began to think seriously and question Brexit only after the polls had closed. The second-most searched EU-based question on results day was: “What is the EU?”, and as the cabinet currently debates the Brexit plan, searches for Love Island are currently ten times higher than that for Brexit.
This was the vote of the undefined for the uninformed, and evidently, much of the population are now plainly uninterested. However, the thoroughbred industry can not be uninterested. First, on a broad level, economic performance is the primary influence on racehorse ownership. The weakened sterling has meant euro purchases are more expensive for those trading in sterling. Talks are slow, and the longer the uncertainty overhangs, the less confidence firms will have, adversely affecting their operations, which could further weaken the sterling. Should this occur, sterling buyers could decrease buying activity abroad. The weakened sterling has already led to a decline in Irish stud fees to maintain competitiveness for English breeders. On the other hand, European buyers may wish to capitalise on the strengthening of the euro, but this can only occur should the continuation of the free movement of thoroughbreds between Britain, Ireland and France still exist. Lengthy border veterinary checks would deter travel and would be most inefficient for both the racing and breeding industry. There are around 26,000 thoroughbred movements between Britain, Ireland and France each year. Nearly all of Ireland-France journeys are
