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Factbox: Sterling 'flash crash' - who holds British assets?
October 7, 2016 / 2:31 PM / a year ago

Factbox: Sterling 'flash crash' - who holds British assets?

LONDON (Reuters) - A 10 percent “flash crash” in sterling on Friday was the latest sign of how far Britain’s impending exit from the European Union has rattled financial markets, with the UK’s currency, stocks and government bonds all falling for a second straight day. [nL5N1CD1WG]

With a current account deficit of nearly 6 percent of economic output, Britain is highly reliant on foreign investment. Here is a closer look at overseas holdings of its main financial assets:

* Around 5 percent of the world’s known central bank foreign currency reserves are in British pounds, the equivalent of more than $350 billion, according to the International Monetary Fund.

That is the third largest holding, behind U.S. dollars (63 percent) and euros (20 percent).

To see a graphic, click here: tmsnrt.rs/2dxOwEU

* More than half of UK stocks are held by overseas investors, according to Britain’s Office for National Statistics (ONS). Foreign holdings were less than 10 percent in the 1970s and 1980s, and stood at around 35 percent at the turn of the century.

To see a graphic, click here: tmsnrt.rs/2dAy57l

* Nearly a third of investors in British government bonds are from outside the country, ONS data shows. That equated to 500 billion pounds’ worth at the end of June.

To see a graphic, click here: tmsnrt.rs/2dxLJLP

* Direct investment into the UK by enterprises located abroad has risen steadily over the past 30 years, with the only major blip occurring during the 2008 financial crisis, according to ONS data.

To see a graphic, click here: reut.rs/2dYYjDn

* Foreign investors accounted for around 45 percent of the value of total transactions in British commercial property since 2009, although that tailed off quite sharply in the first half of this year, the Bank of England has said.

“An abrupt reduction in the willingness of foreign investors to engage in new investment could also have a severe impact on asset markets in which foreign investors account for a substantial proportion of transactions,” the BoE said in its latest financial stability report.

Writing by John Geddie; Graphics by Vikram Subhedar and John Geddie; editing by Giles Elgood

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