Brexit's Winners and Losers: Johnson Triumphs as Pound Plunges

Former London Mayor Boris Johnson gets a boost, while big banks face a world of chaos

Brexit: Winners and Losers

Today's victory for the Leave campaign in the U.K.'s referendum on European Union membership will roil business, markets and politics.  Below is a sampling of some of the winners and losers from the vote.


Boris Johnson and Michael Gove: They were the ubiquitous faces of the Leave effort. The former London mayor and the Justice Secretary will now be heroes to the Conservative Party parliamentarians who are deeply anti-EU, and well positioned now that Prime Minister David Cameron says he will step down as leader. In the leadership race that would follow, "the two-thirds of the party who are Euroskeptics may well go for Boris or Gove," said Jon Davis of King's College London. They made an effective tag team during the Leave campaign, with Johnson's verbose bluster and Gove's more cerebral manner combining to create "a relentless narrative," Davis said. It was also a victory for U.K. Independence Party leader Nigel Farage, who wasn't part of the official Leave campaign but has pushed for separation for a quarter-century.

Boris Johnson during a Vote Leave campaign visit to DCS Manufacturing Group in Stratford-Upon-Avon, England on Monday.
Boris Johnson during a Vote Leave campaign visit to DCS Manufacturing Group in Stratford-Upon-Avon, England on Monday.
Photographer: Christopher Furlong/Getty Images

Marine Le Pen and Vladimir Putin: The leader of France's anti-immigration National Front made no secret of her support for a British departure and her hopes for the breakdown of the EU. One year before French national elections, her populist counterparts in Germany, the Netherlands, Belgium and Italy may be emboldened too. President Putin too may be pleased. A divided, distracted Europe is less likely to focus on opposing Russian designs on Ukraine, or on developing a common energy policy to reduce Putin's influence on gas markets.

Marine Le Pen.

Marine Le Pen.

Photographer: Christophe Morin/Bloomberg

Lawyers: Unspooling four decades of EU legislation, negotiating a new relationship with the bloc and embarking on trade deals with the rest of the world means one thing for sure: billable hours. Attorneys with experience of international treaties will be in huge demand in London for years. Experts will be able to charge a scarcity premium: Britain hasn't negotiated a trade deal on its own in decades and "the expertise doesn't exist" to start from scratch now, said Wolfgango Piccoli, co-president of consulting firm Teneo Intelligence.

The Businesses

Regulation haters: While most big companies staunchly opposed Brexit, a few argued it will benefit them through lighter regulation and the resulting higher economic growth. JD Wetherspoon Plc's founder, Tim Martin distributed anti-EU and anti-IMF beer mats in some of his 1,000 low-cost pubs in the U.K. and Ireland. David Ross, founder of what was previously Carphone Warehouse Group Plc, also joined a group supporting the Leave vote on the grounds that EU rules hurt small businesses.

Tim Martin, chairman of JD Wetherspoon Plc.
Tim Martin, chairman of JD Wetherspoon Plc.
Photographer: Simon Dawson/Bloomberg

 The Markets

Gold and other safe havens: Investors are looking for the safest assets they can. Gold surged to its highest in two years, while the Swiss franc strengthened the most since the central bank lifted its cap last year. Companies that mine gold should continue rising. Among them: Randgold Resources Ltd., Fresnillo Plc, and Polymetal International Plc. 

The places

Dublin, Amsterdam and other financial hubs: Ireland, the Netherlands and the Nordic countries have all positioned themselves to step in for London. Brexit may make it harder for London-based banks to sell services into the EU, and possible immigration curbs may put into question their ability to hire European staff. Before the vote, Ireland's government approached big banks to sell them on relocating operations to the Emerald Isle; Nasdaq Inc. pitched the Nordic exchanges it owns as an alternative to London for initial public offerings.

How Britain Voted: Brexit Results


For full coverage of the referendum, click here


David Cameron and George Osborne: David Cameron brought today on himself. The prime minister chose to call a referendum in an effort to shore up support from anti-EU Conservatives and head off a challenge from the U.K. Independence Party. Now he says he will step down within three months, and it's likely his legacy will be defined by the vote. His right-hand man, Chancellor of the Exchequer Osborne, once seen as a likely potential successor, may also be damaged.

David Cameron
David Cameron
Photographer: Will Oliver/Pool via AP Images

The political and business establishment: Just about everyone able to scare up a microphone urged Britons to vote Remain: President Barack Obama, IMF Managing Director Christine Lagarde and Canadian Prime Minister Justin Trudeau, to name a few. Business leaders such as Jamie Dimon of JPMorgan Chase & Co. warned that leaving could cost jobs in the U.K. "It's a critical data point in the story of declining trust in institutions and the establishment," said Ian Bremmer, founder of political consultancy Eurasia Group.

The Businesses

Big banks: Their troubles from Brexit will be legion and their shares are showing it. There will be years of regulatory uncertainty and a probable slump in new share listings and mergers, cutting into advisory fees. Currency spikes may hurt trading banks like Saxo Bank A/S and FXCM Inc., which were burned by the 2015 Swiss franc crisis. Then there's the bankers themselves: international firms will now have to weigh moving people and operations to continental Europe.

Deals: Deutsche Boerse's $14 billion plan to merge with London Stock Exchange Group could be at risk. The merger, which has the new company based in London and domiciled in the U.K., requires the approval of the German state of Hesse. Senior politicians in Germany's ruling parties have indicated they're uncomfortable with the merged firm in a non-EU U.K. The companies say they're committed to the deal, though Deutsche Boerse CEO Carsten Kengeter said adjustments might be needed for "new realities" if Leave is victorious.

U.K.-exposed companies: Shares of U.K. companies focused on the domestic market will be hurt.  The pain is likely be worst among the FTSE 250 Index of mid-cap companies, since the larger firms of the FTSE 100 tend to be less dependent on U.K. revenue, according to analysts at UBS Group AG's wealth management unit. "The mid-cap index generates 50 percent of sales in the U.K., compared with just 25 percent for FTSE 100 sales," said Caroline Simmons of UBS.

The Economy and Markets

Growth: The turbulent build-up to the referendum hurt investment and hiring, the Bank of England says, and economic growth slowed to 0.4 percent in the first quarter. The central bank, which next meets on July 14, will probably need to step up support, economists say. The falling pound  -- down to a 30-year low -- may not be much help if the euro area also contracts, since seven of the country’s top 10 trading partners are in the currency bloc. A recession could result, according to the U.K. Treasury and BOE Governor Mark Carney.

Unsafe havens: Norway’s krone is among currencies that are most vulnerable to Brexit: The U.K. is the nation’s second-largest trade partner. Then there's Norway's biggest export: oil, which is poised for its biggest loss since Jan. 20.

The Places

London and its real estate: Citigroup, Morgan Stanley, JPMorgan and BlackRock are among international employers that may cut London jobs after separation, which would hurt tax revenue and housing prices. Deteriorating credit conditions will hit property firms including Barratt Developments Plc and Canary Wharf Group Plc, which have said leaving the EU would hinder development projects and raise the cost to build new homes.

London Luxury Homes Fall 1.5% as Tax, Ruble's Drop Hurt Sales
Luxury homes in London on Oct. 17, 2013.
Photographer: Chris Ratcliffe/Bloomberg

 The Wild Card

Scotland's Separatists: The Scottish National Party, which runs Scotland's government, urged Scots to vote Remain. Still, leader Nicola Sturgeon said a Leave vote, assuming Scotland went the opposite way, could underpin a referendum on Scottish independence two years after a previous effort failed. It's a tricky fiscal case to make now with oil, Scotland's key export, hovering around $50 a barrel. And the governments of Spain and Belgium, wary of empowering their own regional independence movements, might block a Scotland bid to join the EU.