Carbon Financial pay tribute to Queen Elizabeth II

With the Queen’s sad passing after a historic 70-year reign we can only offer our condolences to her family and share in the grief with the rest of the nation as the second Elizbethan age comes to a close.

During her lifetime she has lived & served through a world war; 15 prime ministers, outliving 8 of them; and, countless crises. As a public servant and regent she is unmatched in the longevity of her reign.

Whilst of lesser importance their will be some economic ripples from her death and we have written quickly what you can expect:

• Traditionally the London Stock Exchange will close for one to two days following the announcement of her death and on the day of her funeral. This will cause disruption in the financial markets and there will be some immediate volatility in the UK stock markets as a result.
• For Carbon’s clients this is of less significance with the U.K. Stock Market making up only a small proportion of the overall portfolio, however some increased volatility is likely.
• The news is likely to discuss the impact of the Stock Exchange closing costing the U.K. economy billions. This is a combination of the likely inflow of investments on those days, the lost labour costs of a national holiday and the loss of stamp duty receipts on the shares that would have been traded. This shouldn’t directly impact the value of the businesses on the London Stock Exchange or the valuation of your investments.
• As the figurehead of the United Kingdom and Commonwealth the Queen has often been seen as a driving force in tourism and investment into the U.K. but forecasting what the likely impact will be on British businesses is folly. The only reference point would be to look at how the U.K. stock market behaved in 1952 when her father passed away.

In 1952 there was an increase to the volatility around the days he passed in February, with an initial dip in Q2 of 1952 before ending the year on a positive return of 2.95%. This pattern won’t be repeated nor should it be treated as a prediction, more just a reminder that bad news doesn’t always precipitate bad returns.

Ultimately, the news of the Queen’s passing will have a far more social impact than economic but if you are concerned or have any queries around this please just get in touch.

Once again, everyone at Carbon Financial offers their gratitude for her service and shares in the grief for her passing.