While it is still too early to forecast the full implications of the decision by the UK to leave the EU, some things have become apparent. The FTSE 100, comprising multi-national companies that make most of their money outside of the UK, fell 15.3 % in the two days following the result, its biggest two day decline since Black Monday in October 1987, but has recovered all its losses and is now 3% higher. However the FTSE 250, which is more domestically focused, tells another story. It is 7% lower, reflecting recessionary fears. Fears are also reflected in the currency markets where Sterling is 9% lower against the Euro at 0.8470. These trends are likely to persist. This event has also dragged the European equity market lower by 6%.The broader impact, both political and economic, will take time to manifest themselves, but a prolonged period of uncertainty is ahead.
We will keep you informed as the situation develops, and as always should you have any questions feel free to contact us.
Author: Sean Blake