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Rough waters may be ahead for Britain's luxury yacht industry, but right now it's riding on a wave caused by currency fluctuations at home.

At the annual Southampton Boat Show, British-based Sunseeker, Princess and Fairline say 'Brexit' is causing uncertainty in the luxury market which is ultimately bad for business.

STORY-LINE:

It's not just the weather outlook that looks poor at the Southampton Boat Show, the yacht industry is also bracing for the potential effects of Britain leaving the 28-nation European Union.

Claimed to be one of the top ten boat shows in the world, the annual event boasts two kilometres of pontoons, home to a wealth of yachting luxury and new marine technology.

There are almost 600 brands attending and hundreds of boats on display.

Poole-based Sunseeker Yachts is exhibiting this £6 million British pound (approx. $7.94 million USD), 28-metre 95 Yacht. It sleeps a maximum of ten people, plus four crew members and boasts up to 120 nautical miles in range.

Sunseeker International, owned by Chinese property and cinema conglomerate Dalian Wanda Group, recently announced a return to profit in the second quarter of 2016.

The luxury yacht makers also announced retail orders in excess of £25 million British pounds (approx. $33 million USD) at the recent Cannes Boat Show.

"There's a direct correlation between the numbers of high and ultra-high net-worth individuals and the number of luxury yachts that are sold," says CEO of Sunseeker, Phil Popham.

"Projections around the world is that numbers of high net-worth individuals will grow by about 20 percent between now and 2020. So, if there's a direct correlation we expect that growth in the luxury yacht market to be the same."

Popham admits part of Sunseeker's recent success may be down to the British currency, but lack of confidence caused by Britain's exit from the EU will ultimately effect their business.

"The thing that we really need to focus on is confidence levels, certainty, we've benefited because of the weakness of the pound, but its all about business confidence", he says.

Plymouth-based Princess Yachts is giving this Princess V58 its world premiere in Southampton. Measuring 18.42 (60.4 feet) in length, it boasts 6 berths and can hit tops speeds of 37 knots.

Princess Yachts marketing director, Kiran Haslam says the weak pound has certainly encouraged some buyers to push through transactions sooner.

"Undoubtedly there's an advantage to the currency exchange being where it is, we saw that in Cannes," he says.

"We saw a lot of boats being sold where the transaction was really, really pushed along because of the opportunity to get the benefit out of the exchange rates."

Ultimately though, buying a luxury item such as a yacht all depends on buyer confidence. Something which 'Brexit' is eroding.

"The uncertainty is something which absolutely grips our segment whether it's cars or houses or travel, there's no denying that a yacht - as wonderful as it is - is not a necessity item," says Haslam.

"So it's always a conversation about is it the right time."

But what is it that luxury yacht buyers are really after? Princess Yacht's creative design director, Sarah Verey says people are increasingly looking for personalisation and uniqueness.

"A lot of it's about lifestyle, it's about how they're going to use the boats," she says.

"Our clients really come on to these boats and use them. So they're tending to look for lots of open spaces, luxurious spaces, spaces where they can entertain both inside and out.

"And also, clients nowadays, they want something unique. So they want to work with us on completely personalising their boat and finding something that is unique to them and actually has never been used on other boats."

Fairline Yachts is exhibiting this sleek new Targa 53 OPEN, a new addition to its popular 53-foot range.

Priced at around £659,000 British pounds (approx. $871,000 USD), it boasts four to six berths and a top speed of 34 knots.

Fariline's managing director Russell Currie says Southampton Boat Show is an important event.

"It is the shop window for the British manufacturers," he says.

"Here, customers can come down and compare all the British brands as well as the brands represented from around the world and choose exactly what is for their specific requirement."

Currie says Fairline too has benefited from the weak pound, achieving its best-ever sales at the recent Cannes Boat Show.

"We've had an overnight decrease in the price of our boats in areas such as the European market," he says.

"At Cannes Boat Show last year, our boats were 15 percent more expensive than this year. And at Cannes Boat Show, we saw the most successful show in Fairline's history in that region."

Though the decision proved a huge surprise to many in the financial markets and prompted a dramatic slide in the value of the pound, the real economy has exhibited a relatively high degree of resilience.

Retail sales, house prices and industrial production have all held up - to the surprise of many.

Still, economists say little can yet be read into the seeming resilience, given the lags involved between events and changes in the real economy.

The fact remains that apart from the fall in the value of the pound, which now stands at around $1.32 USD compared with $1.50 USD on the eve of the vote, nothing really has changed. Britain remains a member of the EU and has yet to trigger the so-called Article 50 that kick starts a two-year time frame for actual Brexit.

"Obviously, industry and business need stability and the time it will take to exit from the European Union will be problematic, but we are lobbying government hard," says Howard Pridding, chief executive of British Marine.

"We need to understand what's going to be in these free trade agreements and what's going to happen about the free movement of goods and people within the European community."

The Southampton Boat Show runs 16-25 September.

Southampton, UK - 16 September 2016

1. Wide of Southampton Boat Show 2016, cruise ship in background

2. Tilt down to pontoon, boats and visitors

3. Close of 'Sunseeker' flag

4. Various of Sunseeker 95 Yacht exterior

5. Close of 'Sunseeker' logo

6. Tilt up of Sunseeker 95 Yacht rear

7. Various of Sunseeker 95 Yacht interior

8. SOUNDBITE (English) Phil Popham, CEO of Sunseeker International:

"There's a direct correlation between the numbers of high and ultra-high net-worth individuals and the number of luxury yachts that are sold. Projections around the world is that numbers of high net-worth individuals will grow by about 20 percent between now and 2020. So, if there's a direct correlation we expect that growth in the luxury yacht market to be the same. The fortunate thing is the world is becoming generally a wealthier place so those growth in ultra-high net-worth individuals are in Asia - yes, some of the emerging markets - and Africa. But we're expecting to see a growth in the United States, UK and Europe as well."

9. Tilt up to Sunseeker 95 Yacht top deck

10. Close of champagne glasses

11. Pan left to controls

12. Close of compass

13. Pan right of Sunseeker 95 Yacht master bedroom

14. Close of pillows on bed

15. SOUNDBITE (English) Phil Popham, CEO of Sunseeker International:

"Nearly 50 percent of our business is in Europe so obviously what happens within the European market is of great concern and great interest to Sunseeker. And the thing that we really need to focus on is confidence levels, certainty, we've benefited because of the weakness of the pound, but its all about business confidence."

16. Various of Princess V58 exterior

17. Pan left to controls

18. Tilt up to table

19. Close of martini glasses and gin bottle

20. SOUNDBITE (English) Kiran Haslam, Marketing Director of Princess Yachts International:

"Undoubtedly there's an advantage to the currency exchange being where it is, we saw that in Cannes. We saw a lot of boats being sold where the transaction was really, really pushed along because of the opportunity to get the benefit out of the exchange rates."

21. Tilt down of Princess V58 bedroom

22. Close of sunglasses and magazine on bed

23. High shot of Princess B58 master bedroom

24. Tilt up from magazine on bed to pillows

25. SOUNDBITE (English) Kiran Haslam, Marketing Director of Princess Yachts International:

"The uncertainty is something which absolutely grips our segment, whether it's cars or houses or travel, there's no denying that a yacht - as wonderful as it is - is not a necessity item. So it's always a conversation about is it the right time."

26. Close of glass bottles inside Princess 30M

27. Tilt up of Princess 30M living room area

28. Tilt up of bed in Princess 30M

29. Pan left from bedside table to pillows

30. SOUNDBITE (English) Sarah Verey, Director of Creative Design, Princess Yachts International:

"A lot of it's about lifestyle, it's about how they're going to use the boat. Our clients really come on to these boats and use them. So they're tending to look for lots of open spaces, luxurious spaces, spaces where they can entertain both inside and out. And also, clients nowadays, they want something unique. So they want to work with us on completely personalising their boat and finding something that is unique to them and actually has never been used on other boats."

31. Various of Fairline Targa 53 Open exterior

32. SOUNDBITE (English) Russell Currie, Managing Director of Fairline Yachts:

"It is the shop window for the British manufacturers. Here, customers can come down and compare all the British brands as well as the brands represented from around the world and choose exactly what is for their specific requirement."

33. Close of flowers on Fairline Targa 53 Open

34. Various of Targa 53 Open controls

35. Low shot of bed

36. Tilt down to two beds

37. SOUNDBITE (English) Russell Currie, Managing Director of Fairline Yachts:

"We've had an overnight decrease in the price of our boats in areas such as the European market. At Cannes Boat Show last year, our boats were 15 percent more expensive than this year. And at Cannes Boat Show, we saw the most successful show in Fairline's history in that region."

38. Pull out from cruise ship to Southampton Boat Show pontoon

39. Wide of various boats on marina

40. Close of Sunseeker boat's hull in water

41. SOUNDBITE (English) Howard Pridding, Chief Executive of British Marine:

"Obviously, industry and business need stability and the time it will take to exit from the European Union will be problematic, but we are lobbying government hard, we need to understand what's going to be in these free trade agreements and what's going to happen about the free movement of goods and people within the European community."

42. Wide of Southampton Boat Show 2016, cruise ship in background

The leader of the Brexit Party, Nigel Farage felt confident after his party's success nationwide.

After arriving at Southampton Guildhall for the South East count, Farage emphasised that his party's success meant that no-deal Brexit was "back on the table" and warned that 'the 31st October is the next really big day in this process. If we don't leave on that day, then you could expect the Brexit party to repeat this kind of surprise in the next general election."

At the Guildhall Tom Druitt, a Brighton Green Councillor stood on a chair and put the blame of the country's split firmly on Farage.

"If it wasn't for the nonsense of that clown over there we wouldn't be the international joke that we now are", Druitt said.

The Conservative candidate Daniel Hannan meanwhile said he understood people's anger. "Three years have passed, we haven't delivered Brexit", he conceded.

Southampton, United Kingdom - 27 May 2019

1. SOUNDBITE (English) Nigel Farage, Brexit Party leader and MEP:

(Journalist: "How are you feeling today?)

"Very pleased. I mean it's six weeks ago we launched this party. It's a phenomenal success in a very short space of time and we'll move on from here to the Peterborough by-election and the general election. We're ready."

(Journalist: "And how will you achieve that?")

"Well, at the end of the day, it's about what voters want, and I think either the Conservatives or Labour parties take us towards Brexit or they are going to have to be replaced. It's as simple as that."

++BLACK FRAMES++

2. SOUNDBITE (English) Nigel Farage, Brexit Party leader and MEP:

"Yes, and many more than that for those that want to leave. Because the Conservatives say they want to leave, UKIP want to leave, so there is more votes on that side in the South East than on the other side so don't listen to the nonsense that you are being given from the Liberal Democrats on the stage. Actually, if you look at it all, it's about 52-48 in favour of leave."

++BLACK FRAMES++

3. SOUNDBITE (English) Nigel Farage, Brexit Party leader and MEP:

"Oh absolutely. This is a vote that says 'put no-deal Brexit back on the table, make it part of our negotiations because without that you have got no chance of getting a sensible free trade deal and I want us, as the Brexit party to be engaged in that. But it's also a vote that says 'the 31st October is the next really big day in this process. If we don't leave on that day, then you could expect the Brexit party to repeat this kind of surprise in the next general election."

++BLACK FRAMES++

4. SOUNDBITE (English) Nigel Farage, Brexit Party leader and MEP:

(Journalist asks question about Boris Johnson)

"I will work with anybody. If it is to achieve Brexit, I work with anybody."

5. SOUNDBITE (English) Tom Druitt, Councillor for the Green Party:

++SOUND AS INCOMING++

"Fair enough but if it wasn't for the nonsense of that clown over there we wouldn't be the international joke that we now are. A divided society. This country is split in half. And it's all because of him (points out of shot). What we need to do is as Daniel Hannan correctly said, is bring the country together. This man over there is not the person to do that. He is the one tearing us apart."

6. SOUNDBITE (English) Judith Bunting, Liberal Democrats:

"The number of votes, the fact that more people have supported Remain parties if you count us as the lead Remain party and then Greens and Change UK, add those votes together more people have supported us than supported the Brexit party. The government has to listen. Whoever the leader of the Tory Party is that comes in they have got to listen to the Remain voices. The demographic has changed in the last three years."

7. SOUNDBITE (English) Daniel Hannan, Conservative:

"I understand how angry people are. Three years have passed, we haven't delivered Brexit. I didn't want to be here, I didn't want refighting this election, I thought I'd be walking away now. Job done. We have to get Brexit delivered and we have to do it in a way that is cordial and grown up and orderly and economically liberal. And then we can move on as a country and address all of the other domestic issues that we need to face."

++ENDS ON SOUNDBITE++

Bank of England Governor Mark Carney warned on Tuesday that the British economy is barely growing in the wake of mounting Brexit uncertainties and intensified trade tensions.

Carney said in a wide-ranging speech that a "sea change" has taken place in financial markets in recent months largely related to worries over the global economy.

Trade tensions, particularly those involving the US and China, have the potential to "shipwreck the global economy" and that's a fear that's taken root across financial markets.

Though some of those tensions were eased over the weekend when US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to resume trade negotiations, Carney said it would be wise for investors not to get too carried away.

In the first quarter of the year, the British economy grew by 0.5% from the previous three-month period, though that was largely due to companies bringing forward production to build stocks before the original Brexit date.

Carney, who is set to leave the bank at the end of January after seven years at the helm, said the British economy is having to cope with all these trade tensions at a time of acute uncertainty over the country's departure from the European Union (EU).

Britain was originally set to leave the EU on March 29 but because of the British Parliament's failure to back the deal that Theresa May agreed with the EU, it has been granted an extension until Oct. 31.

Jeremy Hunt and Boris Johnson, who are fighting it out to replace May as leader of the Conservative Party and to become the next prime minister, have indicated that they'd be prepared to back a "no-deal" Brexit on that date if no revised agreement with the EU is struck.

Most economists think such an outcome will lead to a deep recession in Britain as tariffs and other restrictions to trade are imposed.

Carney said markets now think the betting odds for a no-deal Brexit have risen to one-in-three, but that "however Brexit unfolds, we will respond, we will respond to any material change in the outlook."

UK POOL

Southampton - 2 July 2019

1. Wide of Mark Carney, Bank of England Governor, at podium

2. SOUNDBITE (English) Mark Carney, Bank of England Governor:  

"But looking through everything, surveys are pointing to effectively no growth in the second quarter in the UK and that suggests to me at least that there's something else going on, and part of that something else could be negative spillovers from this drag from a weaker globe. In my view the underlying growth in the United Kingdom is currently running below its rate of potential and it's increasingly reliant on the resilience of household spending."

3. Wide of Carney

4. SOUNDBITE (English) Mark Carney, Bank of England Governor:  

"The intensification of these global trade tensions have increased the downside risks to both UK and global growth. And just to put some numbers around it, and sort of recap what I was saying with the various calculations, the direct effects of these measures is pretty marginal for the UK, a little less, about 0.1 percent. And that's partly because we will benefit from lost trade between the US and China over time. If all the measures come in place it becomes more significant, about 0.4 percent. And if that Brexit-style confidence effects were to take place between businesses in the US and China, the total impact starts to be material at over 1 percent of UK GDP."

5. Cutaway audience

6. SOUNDBITE (English) Mark Carney, Bank of England Governor:  

"For now both a global trade war and a No Deal Brexit remain possibilities, they're not certainties. And the way we conduct policy today is we have to deal with the impact of the uncertainty around those events and how they influence the behaviour of households and businesses and financial markets."

7. Wide of Carney

8. SOUNDBITE (English) Mark Carney, Bank of England Governor:  

"Most importantly we'll make a detailed assessment of these global factors and their potential implications of that sea change for the UK economy. What I've sought to illustrate is that whether current trade tensions shipwreck the global economy, or prove to be a tempest in a teacup, they will have important influence on the outlook for growth and inflation in the United Kingdom. That's as close to Central Bank humour as you're going to get."

9. Mid of audience

10. SOUNDBITE (English) Mark Carney, Bank of England Governor:  

"But however these external tensions evolve, however Brexit unfolds, we will respond. We will respond to any material change in the outlook, we'll adjust policy in the appropriate direction as required to bring inflation back to target, its 2 percent target, while supporting jobs and activity in this most important transition for the people of the United Kingdom."

11. Wide Carney at podium

12. Conference sign

Nigel Farage was elected to the European Parliament early Monday morning, as his newly formed Brexit Party appeared to be enjoying storming success across many parts of the United Kingdom.

Southampton - 27 May 2019

1. Brexit Party leader Nigel Farage is declared winner and he takes the stage as rest of results are read out