The impact of Brexit will not be understood for a few years but the initial signs are quite encouraging with markets having bounced strongly this week. On Saturday morning all of the commentary was that we had entered a new world called “post Brexit” and that the good old years of “Pre Brexit” were behind us…. but then again that was just the media and they must hold some responsibility for this whole exercise. One can only imagine some of the diatribe written in the Sunderland Gazette playing on peoples fears carrying stories on immigration but being lazy on the economic impacts if a YES Vote.
As we’ve seen in the last couple of days, markets tend to look through the headlines and focus on the future. While the impact of the Brexit is still very much unknown, the impact is unlikely to be anywhere near as bad as the media was playing it up to be. It was interesting to see one of Australia’s best investors, Hamish Douglas of Magellan, say yesterday that he believed there was a 25% chance that the UK does not leave the UK despite the referendum. All we know is that this is going to be a very long drawn out process.
Bloomberg British pound index and the effects of Brexit – 12% fall intraday
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