The value of the 350 biggest companies in the UK has increased by £156 billion since we voted to leave the European Union.
Before the EU referendum, and in the immediate aftermath, there was much talk of the Brexit vote “wiping off billions” from the value of companies via a fall in shares.
The City bank UBS predicted the FTSE 100 would fall from 6,200 to between 4,900 and 5,500 – a crash meaning companies would lose up to £350 billion in value.
When share prices fell before the Referendum we were told by the Remain campaign how much worse it would be if Brexit actually won the vote.
The Conservative MP, Ben Gummer, tweeted on June 14th: “That £87 billion wiped off the FTSE 100 because of #Brexit fears – that’s not some theoretical sum, it’s your pension. #ProjectReality.”
Gummer is right to say that share prices matter, not just for individuals who own shares directly, but for the millions more with personal pensions.
Companies also look at their share price when considering whether or not to pay their staff more, or to expand and create more jobs.
So how do share prices compare now with before the referendum? The Stock Exchange has helpfully given me some figures.
The FTSE 100 closing price on 23rd June was 6,338.10. The price at the time of writing is 6,886.74. So that is up by 548.64.
That means £140 billion has been added in value to FTSE 100 companies since 23rd June. They are now worth £1.9 trillion.
Those figures were for the 100 biggest companies. The FTSE 250 measures the next biggest 250 businesses. The closing prices on 23rd June was 17333.51.
As I write it’s now 18,162.07, that’s up 828.56. These companies are now worth £16 billion more than before we voted to leave the EU.
Altogether the total market capitalisation of the FTSE 250 at is now £403 billion. So taking the top 350 companies the overall boost in their value is £156 billion.
Even before Brexit takes place, there is a tangible financial benefit resulting from the bold decision we took in June.
The growing confidence in our future opportunities as an outward looking independent nation manifests itself in the £156 billion wiped onto share prices.
It’s not something all those self-styled “experts” who predicted a meltdown talk about much. But it good news for the rest of us – especially those hoping to enjoy a comfortable retirement.