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Get ready for more market reaction to Brexit

Discussion in 'Market News' started by Lily, Jun 26, 2016.

  1. Lily

    Lily Forum Member

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    Sterling and the stock market are only likely to settle once the UK’s new relationship with Europe has taken shape

    A lame-duck prime minister; a (so far) silent chancellor; an opposition party in turmoil; a possible general election in the autumn that could produce a hung parliament; and the threat of a second referendum in Scotland. Do not be surprised if financial markets take a second look at Brexit and decide that Friday’s initial response was too tame.

    The $2tn (£1.5tn) of stock market value removed around the world is a large figure, of course. But the reaction wasn’t as dramatic as some had feared – the FTSE 100 index ended the week higher than it started, for example. Investors may think again. They already knew that the old image of the UK political landscape – basically stable and predictable, at least by comparison with most of Europe – had suffered a jolt. But they may not have been prepared for the size of the earthquake. Expect aftershocks.

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