UK Economy

Debate between Liam Byrne and Stewart Hosie

Wednesday 29th June 2016 Commons Chamber

[Stewart Hosie]

Indeed, and I will come to the recovery in certain areas in just a moment. The hon. Gentleman is right when it comes to the FTSE 100, but let me come to all the other indices, and we will see the real damage and how it is being played out.

It was not simply stock prices that were affected. Sterling was trading at $1.45 before the referendum. The value of the pound against the dollar fell by almost 8% on Friday the 24th—almost twice the fall in 1992, when the UK was forced out of the exchange rate mechanism on Black Wednesday.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

Of course the FTSE 100 is going to rebound a bit, because the vast majority of the business of FTSE 100 stocks is outside the United Kingdom. If we look at indices such as the FTSE 250, which is much more domestically exposed, we see that the fall has been catastrophic.

[Stewart Hosie]

That is absolutely correct. The FTSE 250 is far more exposed to the domestic market. Whether the index moves up or down slightly at any given time, the key point is that the exposure to the UK market and the lack of confidence at the moment are precisely what is driving that uncertainty.