Boss of investment giant M&G John Foley declares Britain will still thrive in no-deal Brexit despite recession
The boss of M&G - one of the UK's biggest investors - today declared Britain would thrive even if it does not Brexit with a trade deal with Europe.
Markets have been wobbling over concerns that talks between the UK and Brussels are at a stalemate with only a few months to go before the year end.
But John Foley, M&G chief executive, told the Evening Standard: "I am quite positive about how people will react. If there were a breakdown in negotiations I think Britain would really step up. Commerce in the UK would step up and fill any gaps that arise."
He added: "We are a trading nation, that is the way we grew up and that is the way we are. We are brought up to react positively."
Foley, whose M&G group split from the Prudential last year, said he had spent his entire career around commerce and trading, which was why he was so confident.
However, he added he hoped the government did negotiate a deal.
Foley was speaking shortly after UK GDP numbers showed the economy collapsed by a fifth in the second quarter.
He said the country appeared to be split between people who had "barely spent any money for months" and had pent up demand which would boost consumption, and many people who were "really struggling to make ends meet" due to unemployment or reduced hours and wages.
"It is difficult to know how this will play out over time," he said. "Sure, taxes will go up eventually but markets have been surprisingly resilient and long may that continue."
He was measured about his forecasts for markets in the light of Covid, saying: "I am generally hopeful about the human spirit but I do believe it will be hard yards."
Fund managers like M&G were set fair whatever the economic weather, he said, because people across the world are "woefully unpreprepared" for retirement. "With this low level of interest rates people need to invest in products that will make a positive contribution to their futures when they retire."
M&G today paid a 6p a share dividend for the half year as expected and saw a fairly limited decline in assets under management of 4% to £339 billion. Retail investors had moved from riskier assets into cash as the Covid meltdown happened in March and April. Retail outflows in the first quarter were £5.6 billion.
But institutional investors moved in to buy what they saw as undervalued assets. M&G's strong presence in the institutional market had meant it benefited from that trend. Adjusted operating profit was £309 million, slightly ahead of City forecasts, in a set of numbers complicated by the split away from the Pru.
Shares in the group jumped 4%, or 7.19p to 180.84p.
Since splitting from the Pru, M&G has bought Royal London's Ascentric business which gives it more access to higher value wealth management clients.
