This column comes from Puerto Pollensa in Majorca, my favourite off-season watering-hole. The hotel is full of elderly Daily Mail readers intent on making their gin-and-tonics last longer as they contemplate the news from home. Brexit is highly likely to mean ‘hard Brexit’ — departure without residual access to the single market or meaningful new trade deals with the EU or anyone else — and HM Treasury thinks that could cost £66 billion a year in tax revenues. The FTSE’s new all-time intra-day high was consoling for those with a portfolio tucked away, but an uptick in bond yields suggests equities are due for a sharp sell-off soon. And petrol prices are about to jump thanks to the weak pound and a belated Opec move to limit production.
But most painful of all for this middle-England holiday cohort is the thought that their Leave votes have delivered near-parity between the tourist pound and the euro — though that was always likely to be sterling’s trajectory, and as former Bank of England governor Mervyn King has pointed out, a more competitive exchange rate is a welcome stimulus at a moment of uncertainty.
Nevertheless, the denizens of the sun terrace prefer to blame last week’s sterling dive (not so dramatic against the euro as the dollar, but still stinging) on fat fingers, rogue algorithms and evil speculators. And from where they lie on their towels, it’s easy to imagine all that taking place behind the walls of La Fortaleza, the private peninsula a short snorkel across Pollensa bay that was the home of the wicked arms dealer Richard Roper in The Night Manager.
In real life it is one of the homes of the former Tory treasurer and seven-digit donor Lord Lupton, whose career illustrates nothing more sinister (if we draw a veil over the trade in peerages for party fundraisers) than the impervious luck of the City’s super-rich.
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