When the UK voted in a special referendum to leave the European Union (EU), Flavio Maluf called for everyone to take heed. He believes this major event will precipitate in a major follow-on negative effect on all the world’s stock markets. This does seem likely, as the EU was heavily supported by the UK’s contributions, to the tune of € 11 billion in the year 2014. According to Maluf, no one who is knowledgeable about the world of finance and money markets could miss the warning signs.
The signs are coming fast and clear. European stock markets dropped an average of 12 percent after the Brexit event. Maluf goes on to point out some other signs of a weakening economy on a global scale. He says that although the UK economy had been strengthening, the inflation in Britain was too high. This was because of the burden of supporting the poorer countries in the EU. Compounding this issue was the lack of taxation on imports to the UK from other EU countries. After the exit, the UK reinstated the tariffs and even updated them to return this revenue stream to the UK.
Another sign Maluf noticed is that the British pound sterling fell after Brexit to a low not seen since the dark days of 1985. He predicts the return of the trade taxes will sour the UK’s relationship with many countries, even beyond Europe. However, he also notes that his native Brazil has never done very much trade with the UK, anyway. Less than 2 percent of Brazil’s exports ever make it to the UK.
Flavio Maluf is the founder of a number of companies in Brazil, most notably, the sustainable product materials company, Eucatex. Eucatex is a business dedicated to creating building construction and product manufacturing materials in a sustainable way and for better global sustainability. His business has been growing steadily in the last 20 years, along with other Eco-friendly companies in South America. Read his official blog for more insight, straight from Flavio Maluf.