Things are not always what they seem in a post-Brexit vote world

Leaving the events in Rio on one side, Brexit has surprised most, entertained some, frightened others but perhaps most importantly provided confidence that it will take an event of the magnitude of 9/11 to knock the world economy off its feet.

Looking back on the last few months it is true that on June 24, the majority of us were a little worried because most of us owned houses, had a pension, and/or children. And as the week progressed, anyone planning on going on holiday abroad started feeling a bit poorer. Many had feared that a UK vote to exit the EU would represent a significant setback for global markets.

In early July, as numerous ‘Brexit’ MPs went absent, it started to feel like the nightmare that we had all been promised. Then Theresa May became PM, and to the surprise of some, she began to look and sound the part. Comparisons with the Iron Lady have been made and, so far, she has done a decent job in inspiring confidence.

The pound took a hammering after Brexit, but UK assets are suddenly looking 5 to 10 per cent cheaper to overseas buyers. UK manufacturing is having a ball and holders of overseas assets or properties are quids in.

Aside from the impact on the UK pound, the post-Brexit plunge lasted only a few days, as the reassuring Bank of England response and stronger data elsewhere allowed markets to focus on global growth.

So what actually happened? Markets over reacted, and as always there was a correction. The Olympics created a feelgood factor supporting the view that maybe we are more important to the world that we think we are.

Consumers looked around and realised that the world was still going around and actually little seemed to have changed. So why shouldn’t they just carry on as normal.

The FTSE 100 bounced back to well above pre-vote levels and the badly hit housebuilding sector has bounced (after all we have still got a shortage of houses and we still want to own our own homes).

Recent statistics show that consumers actually increased retail like for like spending last month. Two quoted retail companies that I am associated with, Boohoo and Vertu, have made positive trading updates in recent weeks with one saying that, post Brexit, there has been no significant change in consumer behaviour.

The domestic purchasing managers index, having fallen dramatically immediately after Brexit, bounced all the way back up the following month. Whilst I would accept that it is maybe not the best barometer of confidence, banks have continued lending in M&A deals, and in theory, borrowing got cheaper.

So everything in the garden is rosy? Well not really. It does feel odd carrying on as normal, after such a significant decision. But the fact is no-one really knows how it will unwind.

The fear mongers were wrong, the Brexiteers are shocked and everyone is inventing it as it goes along. This should not be a surprise to anyone, all serious and complex negotiations are like that. We won’t know what shape of deal we get until we get a deal.

There will be a lot of uncertainly to come, particularly if the democratic process is challenged, perhaps by a proposal for a second ballot or a fudged (Brexit doesn’t really mean Brexit) settlement.

Markets hate uncertainty because uncertainty creates volatility, but crucially volatility creates opportunity. Perhaps more opportunity than exists for four US swimmers recently competing in Rio.