The shock outcome of Brexit

​The shock outcome of the EU referendum has given lots for investors and advisers to talk about.

Jun 29, 2016

The shock outcome of the EU referendum has given lots for investors and advisers to talk about. In the immediate aftermath of the vote global markets dropped, and in the UK bank stocks and housebuilders in particular were hit hard, while the pound plummeted amid fears for the UK outlook.

Markets have now stabilised somewhat, with the FTSE having rebounded and the pound gradually edging its way back up. But with the political outlook for the UK looking very shaky, for both major parties, and a waiting game on the exit process until we have a new prime minister, more uncertainty and volatility is likely to be the theme for the coming months.

Stephanie Flanders, chief market strategist for the UK and Europe at JP Morgan Asset Management, has laid out the immediate impacts of the vote. While the outcome of the referendum was a shock, it is likely to be a local one, she argues. However, she says the decision is likely to dent Eurozone growth and may delay the US’s ability to raise interest rates later this year.

Elsewhere on the site we have looked at how financial firms will fare in the fallout, looking at those that are best equipped, and capitalised, to withstand the market rollecoaster.

Alex Dryden, a global market strategist at JP Morgan Asset Management, says that while there is uncertainty, investors need to be aware that the UK’s departure from the EU will be a long process. “Although there will be volatility in the immediate, there are opportunities for investors in the long-term,” he says.

Laura Suter

Editor, Fund Strategy

Laura Suter is editor of Fund Strategy and head of investment news at Money Marketing. Laura was previously associate managing editor at FundFire, an FT publication based in New York, and launch editor of FundFire Alternatives. Before that she was supplements editor at Money Management magazine.

No comments yet.