Sign up to myFT Daily Digest to be the first to know about David Raymond Morgan news.
From 6am on Friday, members of the FT City Network began emailing their responses to the Brexit vote in a snap debate among the forum’s 50-plus members.
The full transcript of the debate so far is below.
Dame Alison Carnwath, Land Securities
After a very narrow result we can look forward to continuing uncertainty in politics as the Conservative party attempts to reunite. All attention now should be focused on our relationship with Brussels and yet the Conservative party is so fractured that new leadership is required. Good morning Theresa — where are you?
The property sector suffers from being cyclical and suffers from demand shocks. We have just had one of those demand shocks and those businesses exposed to speculative developments and unlet space may well suffer. We will have to wait and see. Those property companies which have de-risked though this cycle are better placed — low leverage and long leases.
The PM has done the right thing after creating the turmoil and uncertainty. Politically we will move on swiftly in the UK — the uncertainty will move more to Europe.
I have no doubt whatsoever that the City will pull through and business should engage positively with the new leadership to assist in shaping our future.
We may have given Trump a helping hand.
Simon Walker, IoD
This was not the result that British business wanted, but now that the country has voted to leave the EU, it is imperative that our leaders manage the transition as smoothly as possible. There is inevitably going to be economic and political turmoil. It’s important that the government focuses on restoring stability while a new relationship with the EU is established.
British businesses are resilient, and they can, ultimately, weather the storm. Politicians need to negotiate a deal with European leaders which preserves the ability of British firms to trade easily with the remaining member states. Even once we have left, the EU will continue to be our biggest trading partner, and the first destination for most companies when they start to export.
One thing the government must do immediately is to guarantee the right to remain of EU citizens currently in Britain. Employers have enough to worry about without the threat of losing valued staff.
Helena Morrissey, Newton
The country can thrive.
Ruby McGregor-Smith, Mitie
Economic and political turmoil affects jobs in a negative way for many in the short term. That is not something I wanted to see at all. As much as we will all just get on and deal with the markets we face, I worry this creates an even bigger divide in income equality and even more pressure for the most vulnerable in society — we must not forget that.
Lady Barbara Judge, IoD
There’s no point in denying that the result has created uncertainty for business. I am, however, an optimist. I have worked in many different parts of the world, and British businesses are among the toughest and most inventive I have seen. They have no choice but to respond to this new situation and make it work for all of us.
We do not know exactly what trading arrangements the UK will finally negotiate with the EU, but we do know the deal will take a while to complete. While we are waiting, the government’s watchword must be stability. This is no time for settling scores, we need politicians from all sides to work together to keep the economy on track, which should be our top priority.
The important thing now is not to spend time with recriminations but to pull together as a nation and get back to business. There are many decisions and programs that have been put on hold, like building new runways and reforming the tax code. We should not be paralysed with shock but move forward to work out our new relationship with Europe and the rest of the world. From now on resilience must be the name of the game.
One key concern is how much this has helped Donald Trump. He already wants to close the doors to America. Now he may feel he is supported in concept by Britain. Will the Americans agree?
We must not lose all hope. It is a time for reconciliation and resilience not recrimination. British business must lead the way however difficult it may seem in the short term — and we can.
Guy Hands, Terra Firma
A ghastly day for the UK, a ghastly day for Europe. One huge step back towards the history of European conflicts. I worry for our children and their likelihood of living with the same level of peace and prosperity that we have been so fortunate to have lived with. While the EU is a desperately flawed organisation, the alternative of repeating European history is too ghastly to comprehend. But I fear we are moving closer to it.
Alexis de Rosnay, Canaccord
Couldn’t agree more with Guy. This is the result of an emotional vote, with a look at the past. The EU is inept in many ways, but it is (was) our only common glue to be competitive globally and bring very different people together.
What we have now is a victory of inward-looking, short-sighted people who have placed their faith in politically motivated quasi leaders who are masters of spin and lack perspective around the complexity, diversity and subtlety of today’s world.
John McFarlane, Barclays/CityUK
The UK is this timezone’s financial centre and will remain so. While not wholly unanticipated, we are great at dealing with these things.
The key is quickly to give as much certainty such that markets are stabilised, and allow business to go on as usual, while we negotiate the exit in our best interests. This means maintaining the strongest possible economic links with Europe and preserving appropriate capacity for Europeans to live and work in the UK, and vice versa.
In the run-up to this decision the UK authorities and UK banks are well prepared. They are well capitalised and have worked through the night. They have boosted liquidity and have taken the appropriate action to reduce related risk although, as expected, today is and will remain bumpy.
There is a natural flight to safety in the strongest currencies like the yen and US treasuries. As expected, the pound has fallen. What is interesting is how markets, including betting, got it wrong in the immediate run-up. There is no surprise in the regional position versus that of central London and Scotland. The “northern powerhouse” has become very real in an unanticipated way. All eyes are now on Scotland.
For the moment, back to work.
David Morgan, JC Flowers
First, this is a massive repudiation by the electorate of the near unanimous view of our economic/financial/business elites. Second, the result was also an indication of current widespread unpredictability. We thought the weight of money was a predictable indicator of the outcome — it wasn’t. Third, this result will now bring much increased focus on, and sharply heightened concern over, a series of other major risks: the eurozone; Japanese and Italian sovereign debt; the Chinese and Italian financial and banking systems; and global secular stagnation.
Brenda Trenowden, 30% Club
It has been a very divisive and highly emotional campaign and the results reflect a very divided country.
I saw a wonderful piece of art at the Summer Exhibition this month with a very relevant quote on it that captures my feeling on this: “What unites human beings is huge and wonderful. What divides human beings is small and mean.” We need to focus on reuniting the country and moving forward.
James Bardrick, Citigroup
The key thing now is to ensure financial stability and to help make sure that the UK exits on the best possible and sensible terms to secure a robust and mutually beneficial future relationship with the EU. To help the UK government to do this, I think we and the UK financial services industry need to calmly and responsibly consider and contribute to the plans for the forthcoming negotiations, and be clear what the objectives should be. We hope that there will be time for this before the Article 50 notice is posted. We must focus on our primary purpose and need to continue to reassure clients that we can and will continue to serve them through an extended period of uncertainty and make sure markets function efficiently as we adapt to the new environment.
Sir Roger Carr, BAE
The British people have made their decision. Politicians and business leaders must now manage the outcome. Self interest must take second place to national interest. The UK government must focus on calming uncertainty and negotiating the best terms and smoothest pathway for a graceful exit. Business leaders must redouble their efforts to build a more prosperous Britain and play the hand they have been dealt rather than wish for a different set of cards. In or out — improving productivity and increasing exports remain the cornerstones of achieving economic success in increasingly competitive markets. Our collective focus must now be in building a Great Britain in a very different world.
David Roberts, Nationwide
Britain has always been at its best at times of high uncertainty and volatility. There are important decisions coming, but for the next few days, weeks and months we all have a responsibility to work through the issues in a calm, thoughtful and positive manner. Despite the naysayers, the economy will continue to function effectively; customers will still need to save, borrow and invest and we will all continue to be there for them as we were yesterday and in the weeks past.
All the main UK financial institutions have rehearsed and prepared for this eventuality and are in strong positions to deal with the inevitable uncertainties that lie ahead. There will be plenty of time in the future to assess the implications of this result. However, now is a time for calm, supportive and reassuring leadership for our people, customers and clients.
Edward Bonham Carter, Jupiter
An extraordinary convulsion of the political and economic tectonic plates. We are now in a period of disorientation as time will be needed to answer the what, how and when questions. This is a time for considered thought and action.
Daniel Godfrey, The Investor Forum
Many people have the right to be furious with the “elite”. Their righteous anger has been exploited by the Leave campaign, politicians and business mishandled the In campaign. The remedy to the anger that’s been chosen may be bonkers but that is of no help now.
The EU must now be set on a path of real reform and if it fails, it will surely fall victim to the same anger that led to this result. Now, we need to focus on managing the transition with as little economic and social dislocation as possible in negotiating with the EU and the rest of the world. My personal stage of grief is “bargaining” so I’m still hoping some alternative solution will be found before we give notice under the Treaty.
Rhydian Lewis, RateSetter
It feels like a rebellion but there is a lot of optimism and self-belief in this vote which should be recognised. Now that the direction of travel is clear, it would be good to not rush the leaving and to be considered. Business will adapt because it always does and in change there is always opportunity. The City faces a challenge — but much it has to offer does not rely on the UK’s membership of the EU and it can continue to thrive. Sterling has obviously taken a hammering — but currency moves have winners and losers and there will soon be a tailwind for some parts of the economy as a result. Given the very high percentage of income that FTSE 100 companies derive from outside the UK, the currency drop might offer some support to the index.
It will be interesting to see how the mid-market indices perform as they are the bellwether of the UK’s domestic economy. We are lucky that this outcome became a real possibility some months ago because it would appear that much contingency planning has occurred in the financial system — this should help stability in the immediate term.
Sir Mike Rake, BT
We are going to pay a high price for the breakdown of trust in the establishment with the weakest in society at most risk. Emotion has trumped facts and untruths have been believed.
Our politicians need to remember that more than 60 per cent of the electorate did not vote to leave and they now have a responsibility to come together to agree a way forward as quickly as possible. Business will have to work with government to stabilise the position and minimise uncertainty as soon as possible.
Sir Gerry Grimstone, Standard Life
The people have spoken — and decided. The City will work with government, the regulators and authorities throughout the world to put this decision into effect in the most positive and least disruptive way. Life will be different but London can still be the global centre of finance with all the benefits this incurs, not just for people throughout the UK but also for others throughout the world. The work must start right away.
Paul Drechsler, CBI
The British people’s vote to leave the EU is a momentous turning point in our history. The country has spoken and we all need to listen. Many businesses will be concerned and will need time to assess the implications. But in business we are used to dealing with challenge and change and we should be confident businesses will adapt. The urgent priority now is to reassure the markets. We need strong and calm leadership from the government, working with the Bank of England, to shore up confidence and stability in the economy.
The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions. Business will assess impact and implications and adapt as it always does. It’s what we do. It is vital to work with government on next steps.
Jean-Pierre Mustier, Tikehau
This vote should be looked at as a major long-term issue, with much deeper consequences than the Lehman crisis, for instance, as it has not only financial but also deep geopolitical consequences. Hence we need to look at the impact in five years, not five months or five hours. The populist insurgency and rebellion against the establishment outlined by this vote will be felt much more deeply in continental Europe, much less open to liberal ideas than the UK.
Consequently, the medium-term critical issue is what will happen to continental Europe, and specifically countries where the populist feelings are high. It will force a rethink of Europe, but the political leadership, in a year of election, might not have the ability to act forcefully: a more limited core Europe and a trade agreement with other countries as outlined recently by ex-French president Giscard d’Estaing might be where Europe might go.
Volatility will be high for quite a while, capital markets will be shattered, the City will have more than ever its role to play, and should take the leadership in an attempt to restore public confidence in the financial system and renewed faith in capitalism.
Sir Richard Lambert, Fair Education Alliance
This vote represents, in part, the frustration of those who have not benefited from economic growth in recent decades. Real incomes and social mobility have stalled, and the correlation between economic deprivation, poor education and limited life chances remains much too high. The need to develop human capital has never been more obvious: education policy has to be front and centre of the next government’s strategy.
Samir Desai, Funding Circle
The process to leave the EU takes two years, so today this does not affect our access to the single market or free movement of people. Clearly there will be economic uncertainty, and uncertainty is anathema to financial markets. However, it is important to remember that many UK small businesses, who represent 50 per cent of GDP and private sector employment, are not exporters to the EU, do not trade there and were more balanced than big business on the risks of leaving. It is now more important than ever that these small businesses can access the finance they need to grow and expand.
Whilst this isn’t the result we wanted, it is important to be calm, measured and pragmatic over the coming weeks and months. Tough times do not last, tough companies, people and together countries do.
Dame Fiona Woolf, CMS Cameron McKenna
The websites of City law firms indicate helpfully the level of detail that will need to be addressed, sector by sector, not only to exit the EU but to replace the regulations that have direct effect in the UK. This will be a resource-hungry exercise where businesses can really help with the thinking, not just in relation to their own sectors but also the big policy issues, such as immigration. In London, it is clear that we value being open and liberal. It is what has made the City so successful. Behind each challenge there is an opportunity. Our opportunity now is to stay focused on the long term for the young in society, whose future it is.
Robert Swannell, M&S
The full implications of this decision are unknowable. The pundits and markets were wrong yesterday, they will no doubt be wrong again. The financial market disruption today, whilst wholly unwelcome, is a sideshow compared to understanding fully the effects on our society for decades to come.
As well as leadership and reassurance, we need time for reflection and clear thinking. We don’t even yet know the full set of questions, let alone the answers, that will allow us to reposition our future trading, political, legislative and security arrangements. The remaining 27 countries in the EU will have to set aside any feelings of grievance at the UK decision and understand why the leaders of all our main political parties, supported by most significant world leaders and almost every economic agency and forecaster, were unable to sell a vision of the EU to the electorate. The result should also trigger some reflection on what part real or perceived widening of inequality in the past decade has played in this decision.
We will need great talent in the public service to frame and negotiate the new reality with our trading partners, rewrite our laws etc. It will be a huge task, without precedent. The best from the civil service will need the support of people and know-how from the private sector. Above all, we will have to calmly work through the issues affecting our own businesses to achieve the best possible outcome for our shareholders, employees and customers and, ultimately, the country.
Sir Philip Hampton, GSK
The UK will make its adjustments, probably less prosperous but with some recovered bits of independence. The main issue is how the EU deals with the decisive economic and political dominance of Germany and the seemingly intractable strains of monetary union without fiscal transfers. The referendum started as a way to deal with squabbling Conservatives but may be the beginning of a much bigger process.
Michael Tory, Ondra
The buyer’s remorse from this one will be beyond measure — and was already even visible on the faces of leave camp talking heads this morning when they began to see what they had wrought . . . the dog clearly never thought it would catch this bus!
One of the saddest things is that the regions and people most severely affected will be the very same ones that voted most heavily to leave. We’ve watched with amazement for decades how Republicans in the United States successfully exploited social issues and a sense of being left behind to trick people into voting against their own economic interests.
Having lived in the UK now for over 25 years, I never thought I would see that happen here.
Lord Mervyn Davies, Corsair
Today is a sad day for Europe and the UK. We have to accept the decision and the ramifications for the UK will be very serious. Politically and economically the UK is going to face significant change. Party politics is irrelevant.
This is more about what sort of Britain we want and our relationship with the rest of the world. The political and economic elite are clearly going to have to ask themselves some tough questions.
We have to reconnect. We have to carve opportunity out of this situation however difficult it is.
The campaign understandably focused on economy and trading but it is clear that this did not address the concerns over immigration and about people who have been left behind in society.
All politicians must now do some serious soul searching as we have to bring a divided country together.
We must ensure that certain politicians put their egos aside and realise the seriousness of the situation. This is about shaping Britain not about individual political careers or selling newspapers.
This is a defining moment in UK history and we must now address our huge obligation to the next generation with openness, confidence and humility.
Baroness Shriti Vadera, Santander
I agree with everything that has been expressed wonderfully well about respecting the result.
To borrow from JFK, the City needs to move from the comfort of opinion to the discomfort of thought. We need to reflect on our place in the underlying divisions the country has demonstrated.
And when we participate in the debate on the terms of exit, we need to think beyond our individual firms and be united in the interests of the sector, of a wider more inclusive economy and of the relationship with our most important trading partner, Europe.
I agree with Mervyn [about] soul searching [but it] cannot be confined to the politicians.
The benefits of globalisation, growth, technology and freedom of movement have not been shared fairly. We cannot now be surprised by the consequences. The result is the symptom of the same phenomenon being experienced in the US and many European countries and may in history be seen in a continuum of events including the financial crisis, with many years yet to run.
Nigel Wilson, L&G
People are fed up of the rich and the elite shouting at them telling them how to vote. The financial benefits of the second machine age are being enjoyed by the few and not by the many. Poorer people in rich countries have found themselves increasingly economically, socially and digitally excluded. Political and business leaders have to re-earn trust by serving and leading the communities they represent. With the global surplus of cheap money and the massive need for investment we have in Britain there exists a huge opportunity to replicate the success of London across our great towns and cities. The UK remains a great place to invest.
Unlike the great financial crisis, the Bank of England and indeed the Prudential Regulation Authority were well prepared. The first impression is a good one. Now we just need to ensure the lasting impression is also good.
Martin Gilbert, Aberdeen
Whilst some of the market falls are steep, from my long experience having worked through Black Monday, Black Wednesday, the Asian crisis etc, this is not the time for knee jerk reactions but rather it’s important to have a calm head on behalf of our clients. As long-term investors, often the best course of action is to do nothing or even take advantage of mispricing opportunities.
As someone who has lived through a referendum in Scotland, the mistake [Remain] made was they thought Project Fear would work again but this time they used it too early and thought encouraging us to speak out would help and, as Nigel said, [people] are tired of that.
David Roberts, Nationwide
You are so right. As I go around the country and talk to ordinary folk it is clear they see no prospect of improved standards of living. They fear for their old age and pensions, they worry how their children can ever afford a house, they see huge strains on schools, hospitals and services, and they feel real wages falling. They know for the first time ever they will see a worse standard of living for their children.
At the same time all they hear from “the elite” is how the country is doing well and at the same time yet further demands for austerity. Europe and immigration are easy targets, especially when fuelled by a divisive and ineffective campaign. This is further exacerbated by talk of massive bonuses from a City they see as being completely distant from their lives. It is therefore not surprising they then don’t worry too much when they hear banks, politicians and the City saying [that leaving] Europe is a disaster. This has no real relevance for the issues in their lives.
It is now a task of immense leadership to try to address some of the underlying issues, give hope and improve the lives of people across society. We who have the privilege of running large institutions have a real responsibility to think hard, act resolutely and recognise the role we can and should play.
The sadness is it has come to this: we have had a cry for help and need to heed it very carefully. The tragedy is it comes with very far reaching and in my view damaging consequences for the very people we need to help!
Dame Helen Alexander, UBM
What should business do?
Apart from the obvious in terms of our own businesses, the question for all of us, not excluding business, is what we can do and what part we can or should play, practically, in the big social issues. These include improving education standards, reducing growing inequality and exclusion, throughout the country. The same applies in many countries throughout the world, and certainly on the continent. The perceptions of big business, banks and politicians will only change slowly, over a long time, and as a result of behaviour and actions, not words.
Tidjane Thiam, Credit Suisse
It is going to be important to restore the credibility of political and business leaders with those who feel that they have not benefited, or not benefited enough, from the increased wealth in this country in the recent past. This is true not only in the UK but also in many other countries in Europe. It will not be easy but it is absolutely essential. There needs to be a lot of listening and less talking.
There are important negotiations ahead. I am afraid those negotiations may actually be even more important ultimately for the future of this country than the result of yesterday’s vote. For these negotiations to have a chance of success, it is vital that the UK negotiators — whoever they may be — and the remaining EU states’ negotiators are able to convince their respective voters that whatever deal they have agreed is good for the UK and for the EU.
I prefer not to think of the impact that a failure to do so would have on the UK and the EU . . .
Get alerts on David Raymond Morgan when a new story is published