Brexit-induced anxiety may be rising here in London after Prime Minister Teresa May’s speech yesterday, when she confirmed that she would be pushing for what the dailies termed a “Hard Brexit” come spring. And, in accordance with her take-no-prisoners approach, she also announced that Britain’s financial-services companies, such as the banks, would get no special privileges or protections during the separation.
As the markets digested May’s decision to order a full English exit, bankers waited for the worst, and today it came: The pound dropped to its lowest rate against the dollar in 31 years, at just $1.27 to £1.
This is bad news for all these poor people sitting around me in this coffeeshop in Mayfair, but you know who it’s really, really good for? American collectors in town for Frieze. If they buy works priced in pounds (and not all of them are, even though we’re in London) they could stand to score some serious deals.
Let’s see how this might play out. I received a copy of the price list for the Hauser & Wirth booth at Frieze London, which opens tomorrow morning at Regent’s Park, and there’s a work by Mark Wallinger, id Painting 62 (2015), going for £165,000. If this were Frieze London 2014, when the pound sterling was pummeling the U.S. dollar at a rate of £1 to $1.65, a painting at that price point would have cost an American collector $272,250.
But now, as long as the rate stays where it is by tomorrow morning (the New York markets have just opened) the Wallinger can be purchased for $209,550. That’s a markdown of more than 60 grand!
Frieze director Victoria Siddall predicted as much back in early September, when the exchange rate was not nearly as weighted toward the Americans. In explaining how the fair is—as the London Evening Standard termed it—”Brexit-proof,” she mentioned that rather than repel fearful collectors, visitors will see the whole experience as a bargain compared to years past. From the story:
Siddall believes Frieze will remain Brexit-proof because of its far-reaching international scope. “The only obvious change is the exchange rate, which makes London less expensive for people coming over.” The additional spend in London on hotels, bars, restaurants, taxis and shopping, she tells me, has been calculated to be at least £50 million. “I remember Claridges telling me years ago that their best week of the year is Frieze week.”
Well, time for me to go shopping! Not really. But at least this cup of coffee is a few cents cheaper.