Bolt from the blue

The result of the EU referendum sent shockwaves rippling out from the epicentre of the UK to Europe and beyond. As the unexpected Leave vote sheared the UK open along a distinct geographic and generational fault line, investors were left seriously wrong-footed. But the seismic shock to City traders...

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Bibliographic Details
Published inFinancial Adviser
Main Author Ramakrishnan, Nandini
Format Trade Publication Article
LanguageEnglish
Published London The Financial Times Limited 07.07.2016
Subjects
Central banks
Economic crisis
Economic policy
EU membership
Financial planners
Investments
Politics
Referendums
United Kingdom > UK
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Summary:The result of the EU referendum sent shockwaves rippling out from the epicentre of the UK to Europe and beyond. As the unexpected Leave vote sheared the UK open along a distinct geographic and generational fault line, investors were left seriously wrong-footed. But the seismic shock to City traders on Friday morning was nothing compared with the stunned response of the people who thought they ran the country - and had to think again. The economic and political questions raised by this vote will not be answered for years, possibly decades. But the immediate questions for investors are how long the 'risk-off' mood in markets will continue and how much damage it will do in the process. A week on, as the post-Brexit reality sinks in, our initial assessment of the situation remains unchanged: it is a big shock, but it is ultimately a local one. So how will the consequences play out for the UK itself? The economy will slow sharply. We expect the Bank of England (BoE) to look through the rise in inflation.
ISSN:0953-5276