Demand for British-owned fine wine rises with Brexit currency moves

Media focus post the Conservative Party conference switched quickly from the UK’s stronger than forecast economic growth in the last period and is now zoned in on Sterling’s performance with the headline status of the £ reaching a “31-year’ low. With parity expected between GBP: Euro anytime soon the on-going currency volatility will prevail as we get closer to the Article 50 trigger date in less than six months time.

What will this mean for the fine wine market? The conditions right now provide great buying opportunities for overseas denominations and the increased demand has enhanced the already solid growth performance in the sector.

Liv-ex reported recently that its Fine Wine 50 index is up more than 20% YTD and we can see that growth represented in Sterling in the chart, and the corresponding discount that can be enjoyed because of the currency dynamics by buyers in US$, Japanese Yen and the Euro.

With Sterling sellers able to exit at a profit due to this increased global demand, it’s a win: win scenario for all at the minute. With no clear end in sight to the current volatile financial and economic conditions investors are expected to continue to seek safe havens, like fine wine, for their capital.  

Furthermore, commentators within the financial services sector are already guiding advisors to the fact that their own advice needs to change to manage private investors expectations and financial planning in the global low interest rate, low yield conditions with a view to enhancing portfolio performance with the inclusion of alternative assets offering better returns. The growth enjoyed by the fine wine market this year looks set for some time to come.

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