A leading fund manager claims that after the vote for leaving the European Union the UK economy will have negative impact. The financial system of the UK can “judder to a halt”.
Brexit was described as “really bad news” by the chief executive of Old Mutual Global Investors (OMGI) Richard Buxton. According to his statement if the UK will leave the European Union it can cause a recession.
Mr Buxton claims that the government has already negotiated an exit deal with the representatives of the EU and financial markets became volatile.
For both institutional and individual investors funds were managed by OMGI worth £26bn.
The stock market was priced in a “pretty significant recession”. There is a slide in share prices of the companies of the UK such as house-builders and banks.
Since the date of announced results of the referendum, 24 June shares in 2 of the biggest house-builders in the UK such as Barratt Developments and Persimmon lost almost 30% and 25% respectively.
Mr Buxton thinks that “the economy is going to judder to a halt [or] have mild recession”. Though he does not expect that it will be “as severe as some of these shares are pricing in… The real economy is only going to gradually emerge over the next three to six months.”
The Royal Institution of Chartered Surveyors launched a survey which has found that there will be probably the fall of the house prices across the UK in the next 3 months.
Philip Hammond, the new chancellor claims that there will be changes in the UK economy after the “shock” of outcomes of the referendum.