The UK has probably lost its main asset: being considered THE safe place to invest and store assets in Europe

Just over a week after the referendum and there is still no sign of the Brexit hangover fading away. True, pre-Brexit analysis already anticipated that victory for the "leave" campaign would be followed by a period of uncertainty. But, seriously, the situation looks far more surreal than anyone could have expected (perhaps because few people on both sides truly believed that Brexit was a real possibility). So, here we find ourselves in the midst of the UK’s most pronounced moment of political, constitutional, economic and financial turmoil many of us can remember (apart from cyclical economic crises). Uncertainty being the "new normal" will surely cause severe short-term economic consequences, but I’m far more worried about the damage inflicted on the image, confidence, and reliability of the country.

A quick recap: article 50 (which triggers the EU’s exit process) has not been invoked, and future elections may delay this procedure. Negotiations with the EU on a new deal have not started, nor is there a plan on the table for implementing Brexit (there is not even unanimity among "leave" campaigners on what the best deal for the UK would potentially entail). The Conservative Party is even more divided than before the referendum (with a PM that has announced his resignation), and half of Labour’s shadow cabinet have withdrawn their support for the party leader. That aside, a scenario in which Scotland (with a majority of "remain" votes) calls for a second independence referendum seems pretty unavoidable. We even find some voices arguing that it is possible that a Brexit could be avoided under different scenarios.

And the economic and financial situation is not much better. The stock market tumbled, spearheaded by airlines, real estate and especially investment banks, whose pre-Brexit referendum situation was not exactly solid. Sterling's value collapsed too and London’s position as the most important currency trading hub in Europe could be at risk. Unsurprisingly, the "Big Three" rating agencies have cut the country’s debt rating and changed the outlook to negative, in particular driven by an abrupt slowdown in growth as businesses defer investment.

That’s why some of these Brexit costs are already being felt and it seems that this tendency won’t change in the short term. But perhaps the more important question is whether the influence of Britain on the global stage will wane. The UK had a comparative advantage built upon centuries of a business-friendly environment and a regulatory approach based on stability and legal certainty. That’s why the UK had become not only a safe haven for foreign investors during past global and European crises, but also a perfect environment for those foreign entrepreneurs willing to take the risk of starting a new business. Unlike France for example, the UK is "capitalist", there is no risk of "socialist" measures or taxes being implemented. Having their own currency and Central Bank also gave them more flexibility to adapt to global competition. These are, among other things, what made the UK look very safe to invest and store assets for foreigners.

Also remember that, surprisingly, the UK has attracted a lot of foreign UHNWI (ultra-high-net-worth individuals) while local wealth is more limited (the richest British people in the global ranking are far behind countries like France, Germany, Italy or even Spain!). In other words, UK wealth depends more on foreign money than most European countries.

But now, after the referendum, all this has almost vanished. Think about foreign investors in UK banks. In recent days, they have lost almost 40% of their money (!) – 30% due to market cap decrease and 10% due to GBP depreciation.

Market cap, like the GBP, may go up again in the coming months but what is sure is that foreign investors now know that the UK is no longer a safe place to invest or to store assets. They know that they are at the mercy of populist decisions and behaviour. They know that stability is not there anymore.